In last week’s statement, ECB President Christine Lagarde hinted at a moderately lower purchase pace in the coming period. During the increased buying program, ECB showed an amount of 20 billion euros a month. Therefore, the decrease might be nearly 10 billion Euro a month, which may initiate a dovish sentiment for the Eurozone economy. However, the tighter monetary policy needs to find the inflation rate at or above the 2% level.
On the other hand, the data from the US labor market showed a tighter projected position. Moreover, the July JOLTS data are dated as post-pandemic. However, the COVID recovery in the US remained strong while the supply chain problem remained intact. Further indication about the US economy will be seen after this week’s CPI and retail sales report.
Forex Technical Outlook for 13 September 2021 to 17 September 2021
The most significant release for this week is the US inflation number that may remain roughly unchanged at 5.4% for headline and 4.3% for core. Among other releases, there are CAD and GBP CPI with New Zealand growth.
In the US Dollar index, the price failed to break below the 91.86 support level and rebounded with a bullish daily close last Friday. Moreover, the price remained corrective at the dynamic 20 EMA level, pointing out that bulls may regain momentum in the coming days.
Overall, investors may experience a busy week with many fundamental releases where the inflation report might direct the US Dollar’s dominance.
EUR/USD formed a potential double top at the 1.1900 key resistance level and closed the week with a bearish sentiment. However, the price is still above the dynamic 20 EMA, where any break below the dynamic level would increase the bearish pressure.
The above image shows how the price remained corrective throughout the week. This is because the hawkish tone from the ECB failed to catch investors’ attention with a strong buying pressure. Moreover, the strong price recovery last Friday indicated a strong sign of sellers’ presence.
In the indicator window, MACD Histogram remained bullish but moving to the downside. Therefore, we may expect a bearish pressure this week where the ultimate target will be towards the 1.1700 demand area.
GBP/USD passed a volatile week, where the price tried to break below the 1.3730 support level but failed. Therefore, buyers’ presence from the 1.3690 to 1.3700 demand zone seems to work as a major barrier for sellers.
In the indicator window, MACD Histogram remained bullish and made new highs. Moreover, the price showed an impressive recovery from the dynamic support level with a bullish daily close. In that case, any new higher high in the MACD Histogram may indicate buyers’ presence in the current price. However, the buying sentiment is valid if the price is trading above the 1.3730 support level. Any break below this level may take the price lower towards the 1.3600 area.
The long bullish rally in the AUD/USD was halted by the false break above the 0.7423 resistance level. The price moved higher closed with a bullish daily candle but failed to sustain the momentum. Therefore, the price closed the last week with a bearish sentiment despite failing to break below the dynamic level.
The above image shows that the MACD Histogram is still bullish but squeezing to zero levels. Therefore, the price has a higher possibility of coming lower this week towards the 0.7250 demand area. In that case, investors should wait and find a bearish daily close below the dynamic 20 EMA.
The extreme volatility after a strong bullish trend is a sign that buyers are struggling. In that case, investors should remain cautious and wait for a significant reason to rely on the trend reversal pattern. For USD/JPY, bears should wait for the price to come below 109.00 with a bearish daily close to rely on the upcoming selling pressure.
In the indicator window, MACD Histogram is corrective where a negative Histogram with a bearish daily close below the 109.00 level may take the price lower towards the 107.00 level. On the other hand, bulls should find the price above the 110.72 level to consider a continuation of the current trend.
XAU/USD bears became active when the price closed below the dynamic 20 EMA with a bearish daily close. Later on, the price corrected higher but failed to move above the dynamic level. Therefore, investors should find a new intraday swing low to increase the bearish pressure towards the 1762.00 level.
In the indicator window, MACD Histogram turned negative while the price closed with a bearish candle last Friday. Therefore, the bearish sentiment towards the 1762.00 level is valid as long as the price is trading below the dynamic 20 EMA. Any bullish daily close above the 1805.00 level with a bullish daily close may alter the current market structure.
BTC/USD showed an impressive bullish recovery from the 30,000 level, but the recent bearish pressure raised a question regarding buyers’ dominance. As a result, the price formed a regular divergence with the MACD Histogram and closed below the dynamic support. However, the price is still trading above the 42,500.00 key support level from where a rebound is expected.
The above image shows that the MACD Histogram is moving by creating a new low where the price closed with a bearish candle on the last trading day. Therefore, any recovery from the 42,500.00 level with a bullish daily close above the dynamic 20 EMA would increase the bullish momentum. However, a break below the 42,500.00 level may raise the selling pressure towards the 39,000.00 level.
Overall, investors may experience a volatile week with a lot of economic releases. Among these, the US CPI and retail sales will be significant, indicating where the US economy is heading.