It's been delayed to show a reaction, but the basket of currencies started recovering against the US Dollar on Friday. The 75 basis point rate hike from the European Central Bank did not do much for the day. However, fighting back against the US Dollar and inviting other currencies provided hope to investors suffering from the extending US Dollar strength.
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Forex Technical Outlook for 12 September 2022 to 16 September 2022
The week will start with the UK GDP m/m report, where the current projection for the GBPUSD price is bullish. On Tuesday, the US CPI will provide a clue about the Fed rate hike going to happen later this week.
The list of major economic events to watch for 12 September 2022 to 16 September 2022 is shown here:
- UK GDP m/m on Monday
- CPI m/m on Tuesday
- GBP CPI y/y on Wednesday
- USD PPI m/m on Wednesday
- NZD GDP q/q on Thursday
- AUD Employment Change on Thursday
- USD Retail Sales m/m on Thursday
- US Prelim UoM Consumer Sentiment on Friday
Before moving to currency pairs, let’s see where the US Dollar index is heading:
The US Dollar index corrected lower and found the dynamic 20-day EMA as immediate support. However, the current price is still above the 107.60 critical support level.
In that case, any bullish rejection from 108.40 to 107.60 level would be a bullish opportunity to see the 110.80 level as a target zone. On the other hand, breaking below the 107.60 level might alter the current context and lower the price toward the 105.00 area.
The Hawkish Fed and ECB rate hike was the main reason behind the excessive volatility in the EUR/USD price. Although the week started with selling pressure, it ended up bullish after making a new weekly high and low.
As per our previous weekly forecast, the bullish possibility will be increased if a daily candle closes above the 1.0080 key resistance level.
This technical analysis indicates how bulls regained momentum after making the 0.9864 level a valid swing low. The volatility also pushed bulls above the 1.0000 high volume level, indicating that last week's buying momentum came with a solid increase in volume.
The daily candle of last Friday closed above the dynamic 20-day Exponential Moving Average but still below the 1.0088 key resistance level. The RSI also changed its direction to the neutral 50 level, indicating a neutral momentum.
Based on the EUR/USD forecast from 12 September 2022 to 16 September 2022, bulls have a higher possibility of making a trend change, where a strong daily close above the 1.0088 level is needed before reaching the 1.0366 level.
The long-term market trend is still bearish, while a supportive US inflation report could resume the existing trend. In that case, a bearish daily close below the dynamic 20-day EMA could open the room for testing the 0.9800 level.
GBP/USD passed a volatile week with a 1.50% gain from the weekly low. However, the buying pressure failed to come with a solid volume change, which may reverse the momentum at any time.
Based on our previous GBPUSD forecast, the selling pressure extended from the 1.1520 to 1.1411 level by providing more than 100 pips gain. As the existing market trend is bearish, investors should find more clues before following last week’s bullish momentum.
This technical analysis shows the GBP/USD daily price, where the current level is discounted from 1.2290 high to 1.1490 level. The 50% Fibonacci level from August high to September low is just above the 1.1829 high volume level, indicating a solid barrier to bulls. Moreover, the 1.1762 level is the immediate horizontal resistance level, which came with a bullish liquidity grab.
The Relative Strength Index (RSI) sifted its direction from the oversold zone, while the static 1.1762 level is still 176 pips above the current price.
Based on the GBP/USD weekly forecast, the existing bullish recovery might extend towards the 1.1762 level, but the successful trend change will come with buying pressure above the 1.1960 level.
In that case, a trend following a bearish opportunity awaits bearish exhaustion from the 1.1581 to 1.1700 zone, which may extend the momentum towards the 1.1300 psychological level.
As per the previous AUD/USD forecast, the bullish correction in this pair is still valid towards the near-term supply zone.
This technical analysis shows the AUD/USD daily chart, where the current price reached the dynamic 20-day EMA level but failed to close above it. Moreover, the high-volume level from 0.7136 high to 0.6700 area is within the 0.6902 to 0.7008 supply zone, which is the primary target of the current correction. The RSI changed its direction from bearish to bullish but has yet to reach above the 50% level.
This week’s trading approach for AUD/USD is to find bearish opportunities from 0.6902 to 0.7008 area with a solid bearish rejection in the daily candle. On the other hand, a bullish recovery above the 0.7000 key level would indicate a trend change and open room for reaching the 0.7136 level.
As per the previous USD/JPY forecast, buying pressure extended from the 140.16 level and provided a massive 479 pips gain to the 144.90 swing high. Moreover, the bullish momentum will be valid until bearish exhaustion appears with a massive change in volume.
This technical analysis shows how the daily price extended towards the 144.90 swing high with no significant sellers attempt. The highest trading volume from August low to September high is unchanged at the 137.07 level, far below the current price.
The RSI reached the overbought zone and is yet to rebound below the 70% level with selling pressure in the price chart.
In the USDJPY price forecast for 12 September 2022 to 16 September 2022, the buying pressure may extend if any intraday bullish rejection appears from 141.50 to 142.50 area. On the other hand, a strong bearish daily candle below the 141.30 level might increase the possibility of reaching the 137.73 level.
As per last week’s XAU/USD forecast, the minor bullish correction is complete, and the price formed multiple bearish rejections below the high volume level. As a result, any bearish trading opportunity in the intraday chart will likely extend the selling momentum below the 1689.00 swing low.
This technical analysis shows the XAU/USD daily price where the recent candles became very corrective and found the 20-day EMA as a strong resistance. Moreover, the sideways trading within an ascending channel opens the possibility of a bearish range extension.
Based on the XAU/USD price forecast for 12 September 2022 to 16 September 2022, the bearish possibility is solid as long as it trades below the 1736.31 high volume level. In that case, the channel breakout would increase the bearish possibility, where the ultimate target is to test the 1660.00 level.
The buying pressure in the BTC/USD price might come from the higher capital inflow in the crypto market. The Federal Reserve might pause or reverse its rate hike party as it slides the economy into the recession, and it would be the main reason to grab investors' attention in the crypto market.
However, it is not the right time to say it is a trend reversal as the BTC supply from whale investors dropped to the lowest level since December 2020. Typically, when large investors hold their assets, it works as a bullish factor for the Bitcoin price. On the other hand, the decrease in whale holding indicates an increase in exchange holding, leading to selling pressure on Bitcoin.
This technical analysis shows how the bullish recovery in the BTC price came without testing the 17609.99 support level. Instead, a strong bullish activity appeared by taking the price above the 20063.56 high volume level.
The RSI turned bullish, above the 50% level, while the static resistance of 21,880.85 level works as immediate resistance.
Based on the BTC/USD weekly forecast for 12 September 2022 to 16 September 2022, a bullish daily close above the 21,880.85 level would increase the possibility of reaching the 25240.89 level. However, an immediate recovery below the 20,200.00 level would alter the current market structure and lower the price to 17,609.99.
Major currencies have shown strength against the US Dollar, which may work as a trend-changing momentum until a clear market momentum comes from the US CPI.