The US inflation brought a positive surprise to the US economy, not only to the lower gasoline price. The core inflation also moved down below the expectation of a 0.3% increase. As a result, the picture indicates that pressures on higher inflation are easing while commodity costs are down, leading to a lower freight cost.
However, it is too early to say that US inflation found its peak as the labor market is still tight with no satisfactory growth in employment. The current unemployment rate is 6.0%, which is too high to reach the 2% target level for inflation. Investors should monitor how the Fed reacts to this week's meeting, where a 50 or 75 bps rate hike is expected.
In the Eurozone, the inflation picture has become complicated from the higher gas and electricity costs. In addition, the warm weather increased the electricity demand while the supply became limited due to lower water levels in reservoirs and rivers. As a result, the electricity cost in France doubled in the past three months, which may work as a barrier to an eased inflation.
Forex Technical Outlook for 15 August 2022 to 19 August 2022
The week will start with AUD monetary policy meeting minutes on Tuesday, where no significant impact is expected. However, the Canadian CPI and RBNZ monetary policy decisions will work as price-driving events on Wednesday. Finally, the FOMC meeting and Retail sales report will indicate where the US economy is heading after the softer CPI.
The US Dollar Index (DXY) remained below the dynamic 20-day MA that pushed bears to test the 105.00 key support level. Indecision formed in this level from where a bullish candle appeared on Friday. However, the buying pressure was not enough to indicate a bullish recovery where a daily candle above the 20-day EMA is needed to continue the bullish trend.
EUR/USD became volatile after reaching the bottom at 0.9952 level, from where the latest buying pressure appeared. Bulls gained 3.16% from the swing low in four trading days but became indecisive on 20 July 2022.
This week, bulls made a strong swing high at the 1.0368 level, indicating a range breakout with a counter-trend momentum. Moreover, the price action went through an ascending channel where the stable price above the dynamic 20-day EMA increased the possibility of testing the channel resistance.
This technical analysis indicates a long-term bearish trend in the EUR/USD daily chart, where relying on the bullish range breakout would be challenging. Moreover, the RSI is at the 50% level, indicating a neutral momentum.
Therefore, in the EUR/USD technical outlook for 15 August 2022 to 19 August 2022, the high probable trading setup will come if the daily price surpasses the 1.0144 support level with a bearish daily close. However, any buying pressure from the 1.0253 to 1.0144 zone would be a decent bullish opportunity toward the target of the 1.0577 level.
GBP/USD long-term trend is bearish, whereas the current economic forecast for the UK also supports bears. As a result, following the trend will likely provide the highest success rate for this pair.
This technical analysis shows how the selling pressure increased from the 1.2399 to 1.2216 supply zone with a bearish structure break. Moreover, last week, the price revisited the zone and formed a decent double top pattern, indicating sellers' presence. The dynamic 20-day EMA is the primary barrier for sellers, where a neckline break below the 1.2000 support level would validate the double top pattern.
In the indicator window, the Relative Strength Index (RSI) is corrective at the 50% area, where the validation of the double top pattern should come with the RSI below the 40% area. Therefore, the upcoming trading days will support bulls if a bearish daily candle appears below the 1.2000 support level. The alternative approach is to find the daily price above the 1.2300 level before aiming for the 1.2500 level.
As shown in the previous AUDUSD weekly forecast, AUD/USD continued increasing after massive buying pressure from the 0.6918 to 0.6855 demand zone with a bullish daily candle. As the price made a new swing high at the 0.7137 level, the buying pressure will likely extend in the coming days.
This technical analysis refers to the daily price of AUD/USD, where the current buying pressure came from the bullish Quasimodo at 0.6679 swing low. In addition, the dynamic 20-day moving average shows an intense buying pressure where the RSI level is yet to test the overbought 70 level.
Based on the AUD/USD outlook for 15 August 2022 to 19 August 2022, the buying pressure may resume after a minor correction towards the dynamic 20 EMA. On the other hand, the break below 0.6900 would increase the price volatility before showing further trading opportunities.
In last week’s USDJPY price forecast, it was mentioned that bears had intense selling pressure below the 20-day EMA and static135.57 resistance level. As a result, the price made another swing low to the 132.00 level with a decent 350 pips gain.
Last week, the selling pressure was impulsive, although the long-term market trend was bullish. As a result, the price moved sharply lower but failed to hold the momentum below the 131.48 support level. Moreover, the Relative Strength Index aimed higher to the 50% level, which may increase the price volatility.
Based on the USDJPY weekly price forecast, the nearest trading approach is to find a bullish opportunity toward the 135.57 level. However, a conservative trading approach is to find the daily price above the 135.60 level with a daily close will open room for testing the 139.37 level.
A long-term bearish trendline breakout boosted XAU/USD buying pressure with bullish pressure from the near-term static level of 1780.60. Therefore, if bulls hold the price above the 1780.60 support level, it may extend the momentum towards the 1840.00 area.
This technical analysis shows how the price ended the week with a bullish daily candle last Friday, despite several sellers' attempts during the week. The price has a stable bullish pressure above the 20-day EMA, while the RSI aims for the overbought 70% level.
Based on the XAUUSD weekly forecast, the buying pressure from 1770.00 to 1765.31 would be reliable, where the main aim is to test the 1840.00 level. On the other hand, if the price breaks below the 1760.00 level, it may extend the loss towards the 1700.00 area in the coming days.
Bitcoin trades above the 20-day EMA, indicating that bulls are interested in taking the price near the edge of the ascending channel.
In recent weeks, the peer-to-peer digital currency showed a strong buyer's interest, although it is not enough to say it is a trend change. According to Santiment’s Active Transactions Indicator, the Bitcoin price has shown a massive influx in daily transactions. Moreover, the involvement of solid bulls came after large sell-off days, which can work as a key price driver.
This technical analysis of how BTC price is trading with a 20-day EMA carry, where the current aim is to reach the channel resistance from where selling pressure may appear. The RSI continued pushing up, indicating a strong buyers’ presence in the market.
This week, investors should consider the instrument a bullish opportunity as long as it remains above the 20-day EMA. Moreover, breaking above the 26,558.53 resistance level would extend the bullish momentum towards the 32,361.21 resistance level.
The US CPI is easing, showing some relief to investors, but this week's retail sales and the FOMC meeting would clearly show how the Fed is thinking about the future rate hike.
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