West nation leaders influenced Russian President Vladimir Putin to halt the war but to no avail. The Russian president declared that he aims to achieve what he wants, no matter how. However, he agreed to create a safe corridor for civilians but kept bombing Ukrainian cities. Due to the uncertainty, the commodity prices related to energy have skyrocketed. Crude oil and natural gas reached a multi-year high after the news of gas supply in the Yamal-Europe pipeline. Overall, the global financial sanction of Russia increased the volatility on the forex market, where traders struggled to find a reliable price action. Russian native currency Ruble reached a record low against the US Dollar while safe-haven assets shot higher to recover from the fear of uncertainty.
On the other hand, the inflationary pressure came to the spotlight where major central banks reported the possibility of increased uncertainty from the Ukraine-Russia war. According to the latest ECB meeting, the central bank showed a sign of ending the PEPP program but to keep the Asset Purchase program at a rate of 40 billion Euros a month in Q2.
In the latest financial data, the US economy showed some strength by providing upbeat data in Nonfarm payroll that showed 678K new jobs in the month while the unemployment rate came at 3.9%. Moreover, the CPI inflation came in line at 0.8%, while the Core CPI m/m was increased by 0.5%.
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Forex Technical Outlook for 14 March 2022 to 18 March 2022
The week will start with the RBA Monetary Policy Meeting Minutes, where no significant change is expected. Later on, the US retail sales and Canadian CPI will be reported on Wednesday, where the prominent investors' attention will be towards the FOMC statement and Federal Funds rate on the same day. As of now, analysts expect a 50 bps rate hike where any hawkish tone would be a buying sign for the US Dollar.
In the USD index, the buying possibility has become potent in the USD index as bears failed to hold the momentum below the 97.79 support level. As a result, the price formed a bullish rejection candle and made an impulsive bullish pressure towards the 99.41 swing high. Although the price failed to break the high and ended the week below this level, the broader market pressure is still under buyers’ control. Therefore, as long as the price remains above the 98.00 psychological number, it may extend the buying pressure towards the 100.50 level.
After completing the bullish correction towards the dynamic 20 EMA, EUR/USD resumed the bearish trend and reached the level from where the bullish correction was started. As the broader market context is bearish and the price failed to hold the momentum above the 1.1124 static resistance level, the upcoming price direction would be bearish for the EUR/USD.
This technical analysis shows how the oversold RSI line failed to recover the 50 level and showed a rebound. In that case, the test of oversold 30 level is pending, which may increase the selling pressure in the price chart. Moreover, the bearish rejection from 1.1124 came with a confluence resistance of dynamic 20 EMA where the possibility of a bearish pressure is intense.
Based on the current price structure, bears have a higher possibility of taking the price down in the coming days where the primary target would be 1.0617 level, which is the Fibonacci Extension level of 1.0810 swing low 1.1124 swing high. Besides, investors should monitor how the Fed expressed its opinion regarding the US economy. Any hawkish tone with a rate hike of 50 bps would increase the bearish pressure in the EURUSD towards the 1.0500 level.
GBP/USD bears eliminated all odds by taking out the 1.3195 swing low and reaching the multi-year low. On the other hand, the volatility from the upcoming FOMC event might decrease its value below the 1.3000 key level.
This technical analysis shows that the selling pressure is influenced by the oversold RSI with no considerable correction. Therefore, the test of the multi-year low and 1.3000 key support test would be a sign for a liquidity grab before going long with a corrective momentum.
Trading in the GBPUSD pair has become tricky where the massive selling pressure has reached multiple significant areas. In that case, investors should find a solid bullish daily candle from 1.2970 to 1.2850 area to consider it as a buying opportunity. Any intraday bullish break of structure with a considerable correction should appear while making a buying decision. However, the broader market trend is still bearish, and the US Dollar index supports GBPUSD bears. In this context, the last hope for bulls remains at the 1.2850 area from where a bullish correction may appear.
AUD/USD continued moving up after testing the dynamic support level. As a result, the price extended the bullish channel by increasing the possibility of reaching the 0.7471 key resistance level.
The above technical analysis shows that the RSI is stable above the 50 neutral zones, indicating that the price is still under buyers' control. Moreover, the failure to break below the 0.7237 static support level is another sign of buyers’ interest in this pair.
AUD/USD bulls were among other investors who benefited from the Ukraine-Russia war. The commodity-linked AUD followed the safe-haven Gold’s bullish momentum, which is still valid.
Despite the possible hawkish tone from the Fed, any bullish rejection from 0.7237 would be a buying opportunity for AUDUSD, where the primary intention is to test the 0.7471 resistance level. On the other hand, the break below the 0.7237 level with a bearish daily candle may open rooms for testing the 0.7094 level.
Safe-haven Yen, against the global reserve currency- US Dollar. The US Dollar likely won the battle, as shown in the USDJPY price chart. Bulls have extended the upside pressure above the ascending triangle and reached a level that was not seen before 2017.
The above technical analysis clearly shows the visual presentation of the bullish triangle breakout with an impulsive bullish pressure. AS a result, the gap between the price and dynamic 20 EMA extended while the RSI reached the overbought 70 level.
In this week, investors should find bearish corrections in this pair to find buying opportunities where any bullish rejection from 116.50- 115.60 has a higher possibility of taking the price up in the coming days.
XAU/USD bulls become aggressive due to the geopolitical uncertainty where the price reached the multi-year high at the 2070.00 level. However, the bullish pressure will likely find a ceiling from the post Covid recovery level, which is at the 2075.00 level.
The above technical analysis shows an overbought RSI with a stable bullish trend in the XAUUSD daily chart. Therefore, as long as bulls hold the price above the 1951.00 static support, the price may extend the bullish pressure towards the 2075.00 level.
BTC/USDT showed selling pressure with a capital inflow from large wallet investors. Prominent institutions like Tudor Investment Corp decided to include Bitcoin in their portfolio as a part of the investment diversification. The rising tension from the Ukraine-Russia crisis negatively affected the investors' sentiment where safe-haven assets like Bitcoin can show bullish pressure.
According to recent data from a crypto research firm datamish, almost 1500 BTC were borrowed by large institutions for funding short positions. Based on the previous price behavior, the financing of short positions appears after the massive selling pressure of an asset’s price.
The price is hovering at the Ichimoku Cloud level with a corrective momentum in the technical chart. Moreover, the RSI remained neutral at 50 areas where the most recent price formed a bullish inside bar.
In this context, a bullish daily candle above the 42500.00 level will open the possibility of extending buying pressures in the BTCUSDT price towards the 52,000.00 level. On the other hand, raising the current selling momentum with a daily candle below the 37500.00 level would lower the price towards the 32,000.00 area.
Overall, investors might experience a high level of volatility during the FOMC press conference from where a hawkish tone is expected. In that case, the US Dollar has a higher possibility of extending the buying momentum despite the uncertainty from the war.