The US Dollar bulls suffered the most in over six years as the CPI inflation suddenly eased to below the 8.0% level on a year over year basis. As a result, the Fed could think about a 50 basis point rate hike in December instead of 75. However, a clearer picture awaits the retail sales numbers on Wednesday.
As per the current expectation, the retail sales could bounce back to the 0.8% level after remaining flat in September. However, the upbeat CPI report might not bolster the dollar alone, and more data are pending from the PPI report.
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Forex Technical Outlook for 14 November 2022 to 18 November 2022
After the surprising US inflation numbers, the CPI number will dominate the market over the next few weeks, shifting the focus from the greenback. Moreover, the Pound will likely grab attention as it will be a busy week in the UK. The budget statement will be at the center of attention, providing a clue regarding the high borrowing.
Some growth indicators are also pending for China and Japan, besides the US retail sales numbers.
Let’s see the important events from this week:
- AUD Monetary Policy Meeting Minutes on Tuesday
- GBP Claimant Count Change on Tuesday
- The US PPI m/m on Tuesday
- The UK CPI y/y on Wednesday
- Canada CPI y/y on Wednesday
- The US Retail Sales on Wednesday
- AUD Unemployment Rate on Thursday
Let’s proceed with the US Dollar Index outlook:
The selling pressure in the US Dollar index has become potent as bears closed the week below the 107.21 key support level.
In the coming days, the primary outlook for the DXY will be bearish until bulls recover a daily candle above the 107.21 level. On the downside, the primary target is 104.69 level.
As per the previous EUR/USD weekly forecast, the bullish breakout from the symmetrical triangle showed a strong buying interest from the near-term demand zone. Moreover, the ease in US CPI influenced bulls to add more positions into Euro, creating a rally-base-rally move.
This technical analysis indicates how the price increased aggressively in the previous week, creating a gap between the dynamic 20 EMA and the price.
The interesting fact about this pair is that the fixed range high volume level from the August high to the November low made a new higher high at 1.0004 level. It is clear that the buying pressure after the CPI release came from the 1.0069 to 0.9942 strong demand zone, which worked as a confluence support.
The indicator window shows a buying interest as the RSI level touched the overbought 70% level. Meanwhile, the dynamic 20 EMA is 350 pips down from the weekly close, indicating a pending correction on the downside.
Based on this price structure, the upcoming trading days might bring a corrective bearish pressure in the EUR/USD price. In that case, any selling pressure from the 1.0365 to 1.0448 area could offer a short opportunity in this pair.
However, breaking above the 1.0445 level would indicate a trend-change, where investors should focus on buy trades only.
- EUR/USD support levels to look at: 1.0004, 0.9942
- EUR/USD resistance levels to look at: 1.0365, 1.0445.
The buying pressure in the GBP/USD price is solid as the current price is aimed higher, backed by multiple higher low formations.
This technical analysis of GBP/USD shows a buying pressure in the market as the current price trades above the fixed range high volume level from August to November.
Moreover, the price is emerging as a possible ascending channel where the touch of the upper band of the channel is pending.
In the indicator window, the Relative Strength Index (RSI) has more room for the upside as it is still below the overbought 70% level. The dynamic 20 EMA is closer to the price and acts as immediate support.
Based on the GBP/USD outlook, the broader market structure is bullish, where bulls could test the 1.2289 resistance level in the coming days.
On the other hand, the alternative approach is to wait for the price, breaking below the ascending channel support and breaking at least one demand zone before going short in this pair.
- GBP/USD support levels to look at: 1.3077.
- GBP/USD resistance levels to look at: 1.2289.
The buying pressure in the AUD/USD pair was running before the CPI release as there was a descending channel breakout backed by multiple demand zones.
This technical analysis of the AUD/USD daily chart shows how bulls are active in the price from the dynamic 20-day EMA level. Moreover, the buying pressure is backed by a high volume level from August to November timeframe, which is at 0.6422 level.
The dynamic 20 EMA is working as an immediate support level, while the Relative Strength Index is yet to reach the overbought 70% level.
In the coming days, an immediate buying pressure could show a selling pressure from the 0.6769 to 0.6913 zone. In that case, a counter-trend trading opportunity is available, targeting the immediate support of the 20-day Exponential Moving Average.
On the other hand, a strong bullish pressure with a daily close above the 0.6920 level would confirm the trend chance, where the ultimate target is the 0.7200 level.
- AUD/USD support levels to look at: 0.6422
- AUD/USD resistance levels to look at: 0.6920.
As per the previous weekly forecast for USD/JPY, bears joined the market with a strong momentum, where decent selling pressure was seen with the support from volume.
This technical analysis of the USD/JPY daily price shows how bears eliminated last month's bullish momentum in just two days. After reaching the multi-year high, aggressive selling pressure like this is a primary sign of a trend reversal.
The dynamic 20-day EMA is above the fixed range high volume level, which is a sign that bears are in control. The RSI shows the same story, where the current RSI level is below the overbought 30% level.
The current price outlook of the USD/JPY price is bearish, where a minor bullish correction is pending. Investors should closely monitor intraday bullish correction throughout the week to find short setups.
- USD/JPY support areas to look at: 130.00
- USD/JPY Resistance levels to focus 142.49, 146.94
After the rectangle pattern breakout, the XAU/USD price shoots higher, as shown in the previous weekly XAU/USD forecast. The price now trades 800 pips higher from the breakout point, which could extend more in the coming days.
This technical analysis of the XAU/USD daily price shows how bulls broke near-term resistance levels, increasing the possibility of a trend change. Moreover, the price shows a buying pressure from the long-term descending channel breakout started from the February 2022 high to October 2022 low.
The indicator window shows a pending correction in the XAU/USD bullish momentum where there is a gap between the price and 20 EMA.
Based on the current market outlook of XAU/USD, the bullish trend continuation opportunity needs to find the bottom before offering a trading opportunity. Traders should closely monitor near-term demand zones for opening a long position, where the ultimate target is the 1840.00 level.
- XAU/USD support level to look at: 1734.74, 1702.21, & 1664.67
- XAU/USD resistance levels to look at: 1808.29.
In the current market context, the evolution of the FTX story will decide where the BTC is likely to move. The primary possibility is that the Sam Bankman-Fried-led BTC exchange will take an L, which will stop hurting the BTC price.
Moreover, investors should pay close attention to the ongoing battle between Binance and FTX. The path of insolvency of FTX would be a negative factor for the broader cryptocurrency market.
This technical analysis shows the solid bearish momentum in the BTC/USD daily price. The dynamic 20-day EMA is above the current price with the fixed range high volume level, which is a sign of possible selling pressure in the price.
In the indicator window, the Relative Strength Index (RSI) shows a rebound from the oversold 30% level, which is a sign of extreme selling pressure in the market.
Based on the daily outlook of BTC/USD, the selling pressure is potent as long as the price trades below the 18167.70 resistance level. In that case, the primary target is the 15,500.00 key support level.
On the other hand, a bullish pressure with a daily candle close above the 19,000.00 level could increase the buying pressure towards the 21,510.00 level.
- BTC/USD support level to look at: 15,500.00
- BTC/USD resistance level to look at: 21,510.00.
The broader US Dollar weakness is clearly visible from the recent October inflation report, where the hotter inflation started to cool down after 8 months.