Forex Forecast & Forex Technical Outlook for 13 March 2023 to 17 March 2023

The financial markets sought comfort at the start of the week that January's unexpectedly good performance was not an outlier.

Besides Fed Chair Powell's two-day testimony, the Bank of Canada (BoC) and Bank of Japan (BoJ) both held meetings. Neither institution stunned the markets with unanticipated actions or statements. A minor trend toward a more hawkish Fed and stress in the U.S. banking sector could complicate future monetary policy decisions.

In the US economy, economic activity increased marginally, but in the other six districts, growth was little or nonexistent. The job market continues to be tight, while inflation remains a problem. The difference in regional prices and labor supply and demand has contributed to a mixed but largely optimistic outlook.

Overall, there has been a progressive shift in household structure, with more than half of women currently being single. This change is having an impact on the economy and leaving its mark on the labor market, wealth, and consumption.

Forex Technical Outlook for 13 March 2023 to 17 March 2023

After the Non-farm payroll, it is time to see the Consumer Price Index. As per the recent report, the inflation was down but not enough to keep the Fed from raising rates.

Let’s see important releases for this week:

• GBP Claimant Count Change on Tuesday
• The US Consumer Price Index m/m on Tuesday
• GBP Annual Budget Release on Wednesday
• US Core PPI m/m on Wednesday
• US Retail Sales m/m on Wednesday
• NZD GDP q/q on Thursday
• AUD Unemployment Rate on Thursday
• ECB Main Refinancing Rate and Monetary Policy Statement on Thursday
• US Prelim UoM Consumer Sentiment on Friday

Now move to the weekly price forecast:

EUR/USD

EUR/USD faced a lot of volatility in the intraday chart, but the Non-farm payroll and higher US unemployment rate changed the sentiment on the last day.

A downside possibility is still valid as the monthly candle is still within the 50% area of February’s bearish close. However, a strong bullish reversal is seen in the weekly chart, but it is not enough to consider a trend change.

As said in the previous EUR/USD weekly outlook, the long-term price action is facing strong support from the 100 SMA support. Although the selling pressure was potent below the 20 DMA, bears failed to break below the 100 SMA level, increasing the possibility of a bullish reversal.

A strong recovery and a daily candle above the 20 DMA are seen, but a corrective price action is seen within a rectangle pattern from 1.0694 high to 1.0532 low. Therefore, as long as the price is trading within this range, investors might experience a range extension in the coming days.

A corrective pressure is also visible from the indicator window, where the current ADX is below the 20.00 satisfactory level.

Based on the weekly EUR/USD forecast, a bullish daily candle above the 1.0694 rectangle resistance would validate the trend continuation opportunity towards the 1.1000 area.

On the other hand, a bearish break below the 1.0532 level needs to overcome several barriers before forming a stable trend.

GBP/USD

As per the previous weekly outlook, GBP/USD formed a channel extension by providing more than 200 pips to sellers. However, an immediate rebound appeared during the weekly decease period, which increased the possibility of the channel breakout.

In the weekly chart, a massive bullish daily candle with a long wick indicates the sellers’ trap and buyers' presence in the market. Although the same price action is seen in the daily chart, more clues are needed before jumping into the buying position.

In the daily chart, the broader outlook is strongly bullish, where a descending channel breakout could be an attractive buying opportunity. However, the latest daily candle failed to overcome the channel resistance, while the dynamic 100-day SMA is working as a confluence resistance.

A corrective price behavior is visible from the ADX chart, where a bullish break above the 20.00 level is needed to form a stable trend.

In that case, a stable bullish daily candle above the 1.2125 level is needed before aiming for the 1.2449 resistance level. On the other hand, any sign of volatility and a reversal candlestick formation below the 20 DMA level could extend the channel towards the 1.1706 level.

AUD/USD

A strong downside pressure was seen in the AUD/USD daily chart, which formed more than 100 pips movement to the sellers' side from a strong rectangle pattern breakout. As the bullish correction is not impulsive, sellers may regain momentum at any time.

The daily price of AUD/USD shows a bearish trend continuation opportunity as a stable selling pressure is visible below the 0.6696 resistance level. Moreover, a bearish crossover is seen in dynamic levels, while the 20 DMA and 100-day SMA are above the current price.

A trend trading opportunity is visible from the indicator window, as the current ADX level is above the 20.00 level and aiming higher.

Based on the current weekly forecast for the AUD/USD, we may expect a upside correction after the weekly open, which may increase the possibility of testing the 0.6680 level. However, a bearish daily candle from the 20 DMA could increase the downside possibility towards the 0.6400 level.

USD/JPY

As per the previous weekly outlook, a bullish trend continuation and new swing high formations were seen in the USD/JPY chart. However, a weaker US Job report rebounded the sentiment but failed to make a significantly lower low.

On the weekly USD/JPY chart, A buy-side liquidity grab from the last two weeks’ high is seen with a bearish close below the 135.25 weekly low. The latest candlestick formation is a sign of a possible bearish pressure, but a clearer view is needed from the daily chart.

The 100 SMA  and 20 EMA are working as confluence support levels to the USD/JPY daily price. Moreover, the high volume level from January to March is also below the current price. On the sellers' side, the significant support level of 134.08 is the main barrier, which is in inline with the 100-Day SMA.

The indicator window shows a strong trend, where the current ADX is above the 20.00 line.

Based on this outlook, a rebound with a new swing high formation in the intraday chart is needed to aim for the 138.00 level.

On the other hand, an immediate recovery with a daily candle below the 133.80 level could increase the possibility of testing the 130.00 high volume level.

XAU/USD 

XAU/USD investors have experienced a volatile trading week, where multiple attempts to flip the monthly candle were seen. However, the uncertainty from the Non-farm payroll changed the sentiment and shifted the market direction to the buyers side.

The long-term outlook of XAU/USD is strongly bullish as shown by the 100 day Moving Average, which is working as a confluence support to the 1808.29 support level.

The strong buying pressure during the NFP release made a break of structure from the 1858.00 level, which came with a solid demand formation at the 1835.81 to 1808.29 zone.

A strong buying pressure is present above the dynamic 20 day EMA, while the current ADX is above the 20.00 level for a considerable time.

Based on the current daily outlook, XAU/USD bulls could extend the upside pressure in the coming days, where a minor bearish correction is pending. The ultimate target of the buying possibility is towards the 1918.00 level.

On the other hand, a downside pressure with a daily candle below the 1808.00 level could increase the volatility before forming a bearish leg towards the 1750.00 area.

BTC/USD

Stablecoin whales' accumulation patterns reveal high-net-worth individuals' buying habits, which often work as a strong indicator for cryptocurrencies like Bitcoin.

Whale transaction count is an on-chain indicator of whale investment interests. If it rises after a drop it might offer a buying opportunity. It counts transactions over $100,000 and works a strong trading indicator.

The whale transaction count has consistently exceeded the 50-day average since early February, suggesting investors were already moving their holdings before the March 9 crash. After a steep correction, this metric may spike, indicating investor accumulation.

BTC supply distribution, another on-chain metric, tracks BTC whales with 100–10K BTC. Holding BTC by whales could indicate an accumulation pattern at current levels and lead to a recovery rally.

A strong bearish breakout is visible from the BTC/USD daily chart, where the impulsive momentum indicates a strong bearish continuation opportunity.

The dynamic 20 DMA is above the price, while the high volume level from the recent swing is at 22,332.00 level.

The ADX found the 20.00 level as a support and showed a rebound. Therefore, a bearish trend trading opportunity is solid for this pair but a minor upside correction is pending due to the mean reversion.

The weaker Non-farm payroll report shifted the market direction and investors might find it as a clue to the upcoming FOMC.

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