US inflation continued pushing higher in May while the CPI index rose more lavishly than expected. As a result, consumers continue feeling the pinch of higher prices that would lead the FED to take immediate action.
On the other hand, the European central bank left its policy rate unchanged last week but provided a hawkish sentiment regarding further rate hikes in July. According to the ECB, the 25 bps rate hike in July would be the initial phase, where a larger amount will come in September. Among other central banks, the Reserve Bank of Australia surprised the market with a 50 bps rate hike to 0.85% with an expectation of another 50 bps hike in July.
Forex Technical Outlook for 13 June 2022 to 17 June 2022
The FOMC is the most awaited event this week where the FED would expose its thoughts on the rising inflation. As of now, a 50 bps rate hike may appear for the US Dollar, but the real question is whether the rate hike will ease the inflation or not.
The price showed a strong rebound in the US Dollar index daily chart by moving above the dynamic 20 EMA with consecutive bullish daily closes. As a result, investors may experience further US Dollar strength in the coming days after having a minor correction. In that case, the primary target for the USD buying momentum is the 105.00 level, which is an immediate swing high on the daily chart.
EUR/USD showed an impressive bearish recovery from the 1.0787 resistance level with a bearish weekly close. Although a minor divergence formed in the weekly MACD line, the dynamic 20 EMA is above the price, providing an immediate resistance. In that case, the price will likely move lower in the coming weeks as a continuation of the broader trend.
The above technical analysis shows how the daily price formed a bearish daily candle below the dynamic 20 EMA followed by a rejection from 1.0787 to 1.0736 supply zone. On the other hand, the RSI failed to hold the momentum above the 50 level and rebounded lower, increasing the possibility of reaching the 30 oversold level.
This week, the bearish momentum in the EURUSD price may extend as long as it remains below the dynamic 20 EMA. In that case, the primary price target for the bearish pressure is the 1.0345 level, from where a minor correction may come. On the other hand, any minor bullish correction from the weekly birth period would be a bearish opportunity following the intraday price action.
GBP/USD selling pressure extended as a bearish two-bar rejection appeared from the 1.2600 key resistance level in the weekly chart. Moreover, the dynamic 20 EMA remained above the weekly resistance, increasing the possibility of selling pressure in the coming weeks.
This technical analysis shows the GBPUSD daily chart where the rectangle pattern breakout pushed the price down with an impulsive bearish pressure. Moreover, the RSI is down with an aggressive momentum where any intraday bullish correction may extend the current bearish pressure.
Based on daily structure, the primary price target for GBPUSD is 1.2152 level from where bears may find a barrier. Before that, any minor bullish correction in the intraday chart would be a bearish opportunity. However, if the buying pressure appears with a daily candle above the 1.2465 level, the price may consolidate before showing further trading opportunities.
The broader US Dollar strength from the CPI report extended the dollar strength, and there is no exception for the AUD/USD price. Based on the recent price action analysis, the bullish liquidity gap and new swing high formation at the 0.7285 level initiated a bearish leg of that sharp bearish weekly candle. As the last weekly close is supported by multiple indicators like RSI and MACD, the existing bearish trend may extend in the coming days.
This technical analysis shows the daily price of AUDUSD where the current price faces support at the 0.7054 level. On the other hand, the current RSI is showing a bearish momentum while the dynamic 20 EMA is above the price.
Therefore, the week may start with a bullish momentum toward the dynamic 20 EMA, but any bearish price action below the 0.7054 level would open a bearish opportunity toward the 0.6950 support level. On the other hand, any strong rebound with a bullish daily candle above the dynamic 20 EMA would alter the current possibility, with increased volatility in the price.
There is no one to stop the US Dollar from being too aggressive against the JPY. However, the bullish continuation momentum above the 132.00 key support level with multiple inside bar candlesticks formation in the daily chart indicates that bulls are still eager to buy this pair from its higher price.
The above technical analysis shows the daily price formed inside bars with long wicked candles rejecting bears. On the other hand, the indicator window shows an overbought RSI above the 70 level with no sign of recovery.
Based on the current context, USDJPY reached the 161.8% Fibonacci Extension from the 9 May 2022 high to the 24 May 2022 low, which may initiate a bearish correction. However, as long as the price trades above the 132.00 level, any buying opportunity has a higher possibility of providing a decent return.
XAU/USD corrective pressure from the rectangle pattern extended as last Friday’s CPI-driven movement pushed the gold price higher after testing the rectangle support. On the weekly chart, the price reached the dynamic 20 EMA resistance while the RSI moved to the neutral 50 level. As the market momentum in the higher timeframe chart is corrective, investors need close attention to the daily chart to find a suitable trading opportunity.
This technical analysis shows how the rectangle pattern appeared in the daily XAUUSD chart after a bullish impulsive pressure. Therefore, the corrective pattern after an impulsive pressure has a higher possibility of taking the price up, following the market sentiment. Moreover, the latest daily candle appeared above the dynamic 20 EMA while the RSI remained higher above the neutral 50 level.
Based on the daily chart, XAUUSD is more likely to extend the current bullish pressure towards the 1909.00 level in the coming days. On the other hand, a strong recovery with a bearish daily candle below the 1830.00 level would eliminate the current bullish pressure and possibly test the 1787.00 level.
According to the recent report from one of the prominent crypto analytic firms, only 9.9% of BTC supply is held on centralized exchanges, indicating the lowest value since December 2018. However, in December 2018, the BTC price was at the $3200 level, where the current reduction in centralized supply is a sign of a panic sell.
According to some other studies, BTC analysis was easy for the last 6 months if Wales movements are followed. Whales' activities at peaks and bottoms work as a strong reversal in the price to make it stable.
In the BTC/USD daily chart, the recent price formed an ascending channel breakout where a stable bearish pressure is found below the dynamic 20 EMA. On the other hand, no solid fundamental releases support the crypto bull, which may work as a bearish factor for the BTC/USD price.
This technical analysis shows how the daily price formed a bearish trend continuation pattern where the primary aim is to test the 26,000.00 level in the coming days. On the other hand, the selling pressure would make the instrument cheaper, whereas strong exhaustion would be the primary sign of wales' activity.
Overall, the market sentiment awaits how the FED reacts to the higher inflation where an unsuccessful attempt to control the inflation by raising rates would lead the economy to a recession.
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