After the robust US Job report, the US Dollar became calm as soon as the US CPI report printed at 6.2%, highlighting a risk of inflation that might be more persistent for the Fed to initiate a rate hike. The global financial market responded clearly by moving the bond yields up and selling off in equities. Currently, markets have priced in three rate hikes in 2022 that pushed the US Dollar to remain stronger against the basket of currencies.
This week's important releases include the US retail sales that have continued to surprise in recent months. The main reason behind the positive report in the US retail sales came from the high US goods consumption. However, the global supply chain constraints and the latest inflation figure will further indicate where the US economy is heading. In the Eurozone, the HICP figures will also show the underlying inflation pressure that has reached the highest level since 2002 October. China’s retail sales and industrial production are due to provide a soft tone. Besides, the UK Jobs report on Tuesday will indicate the Bank of England’s position on the possible rate hike. A scheduled virtual summit between US President Joe Biden and Chinese President Xi Jinping, among other economic events. Overall, investors might find upcoming days eventful where a decent movement in major currency pairs is expected.
Forex Technical Outlook for 15 November 2021 to 19 November 2021
In Japan, new Prime Minister Kishida is more likely to expose a new stimulus package to extend the current economic recovery. In that case, the JPY has a higher possibility of weakening against major currencies. Meanwhile, the Reserve Bank of Australia will keep a close eye on the Q3 wage inflation data, an essential indicator of RBA’s transitory inflation view. Any lower-than-expected result will influence the RBA to push back from the current rate hike possibilities.
The price shot higher in the US Dollar index daily chart, breaking above the 92.50 critical resistance level with a solid bullish daily close. The bullish break of structure with a massive buying pressure signifies that the price may extend its buying pressure after a considerable correction. In that case, a bearish correction towards the 94.22 to 94.50 area with a bullish rejection candle would be a solid buying opportunity for USD bulls. In that case, the primary target would be at 97.74 resistance level. Besides, a break below the 94.20 with a solid bearish D1 close would invalidate the current bullish pressure and lower the price towards the 93.34 event level.
Despite the bullish regular divergence, EUR/USD bears became aggressive as the price failed to extend the bullish momentum above the dynamic 20 EMA. As a result, the price extended its bearish towards the 1.400 key support level. However, the recent bearish pressure extended the gap between the price and dynamic 20 EMA while the Regular divergence in MACD remains intact. In that case, any rebound from 1.1430 to 1.1400 with a bullish daily close would be a solid buying opportunity in this pair.
The above image shows how the bearish daily candle loses momentum while the MACD Histogram is still bearish. Investors should monitor the intraday price in this market scenario and find buying opportunities until bears are taking the price below the 1.400 level with a bearish daily close. On the upside, the primary target should be at 1.1617 event-level.
The technical price formation in the GBP/USD pair shows a strong bullish opportunity for long-term HOLDers. However, the price is moving within a bearish channel where a break below the 1.3420 swing low opened the possibility of testing the 1.3300 key support level. Moreover, the test of trendline support is still pending while the mean reversion is intact.
As per the above image, the MACD Histogram remained bearish while the gap between the price and dynamic resistance has extended. Therefore, based on the price structure, any immediate bullish pressure with a daily candle above the 1.3430 would be a buying opportunity in this pair towards the dynamic 20 EMA. On the other hand, the test of trendline support and static 1.3300 level with a bullish daily candle would be a substantial buying opportunity in this pair. Conversely, a break below the 1.3300 with a massive selling pressure may initiate a broader correction in the price.
AUD/USD has been moving within a correction for several months where the bearish flag pattern opened a trading opportunity for long-term investors. However, the recent test of the trendline resistance at 0.7560 pushed the price below the dynamic 20 EMA, where further bearish pressure is still pending. On the downside, the trendline support at 0.7250 and demand level at 0.7200 is the ultimate hope for bulls.
The above image shows that the price is trading below the dynamic 20 EMA, where the price ended last week with a bullish daily candle. Therefore, if the week started with bearish pressure, investors should find buying opportunities from 0.7250 to 0.7180 area with the target of 0.7550. On the other hand, a break below the 0.7180 with a strong bearish daily candle would initiate an impulsive bearish pressure in the price for the coming months.
USD/JPY bulls are strong even after getting a 500 pips gain in Q3. The most recent bearish daily close below the 113.24 level was rebounded immediately with a massive bullish daily engulfing candle. Besides, the possibility of further monetary easing would weaken the Yen against the US Dollar.
The above image shows the price rebounded from the 113.24 support level with strong bullish pressure. In that case, a bullish daily close above 114.50 would open room for further gains towards the 115.00 area. On the other hand, bears need an intense selling pressure below the 113.24 level to extend the current bearish correction.
XAU/USD bulls became aggressive, followed by the inflation fear pushing the price up for seven consecutive trading days. As a result, the price moved near the strong supply level from where a bearish pressure is possible. Meanwhile, the gap with the price and dynamic 20 EMA extended, with a possibility of bearish correction.
The above image shows a PnP formation in MACD where the price made a strong bullish gain without a considerable correction. Therefore, if the price moved lower immediately after the weekly open, a buying opportunity from 1850.00 t0 1840.00 would be substantial. On the other hand, the touch of 1888.00 level with a bearish daily close would be a good selling opportunity in this pair.
The BTC/USD made a new all-time high at the 68917.00 level that came after the US inflation report. After that, however, the bullish pressure became dull with a regular divergence in MACD. Although the price is above the dynamic 20 EMA and static 63641.00 support level from where a strong movement is expected.
Based on the price structure of BTCUSD, any bullish rejection and a daily candle above the dynamic 20 EMA would influence bulls to test the all-time high again. However, a break below the 63641.00 support level, followed by the regular divergence would increase the selling possibility in the price.
Overall, investors should monitor how the global inflation report is coming this week to match the direction with the current increase in US CPI. Moreover, any weaker than expected US retail sales would increase the buying opportunity in EURUSD, GBPUSD, and AUDUSD.