The most recent CPI and PPI data showed that the inflation slowed down in April, which helped the US Dollar come back with a buying momentum. Moreover, the FOMC chairman Jerome Powell said that the Fed is likely to extend the rate by 50 bps at each of the next two meetings but is ready to raise more if needed.
On the other hand, Shanghai's plan to ease the coronavirus-related restriction helped the Asian economy grow while US stock remained weaker due to the strong US Dollar. Therefore, if Wall Street's main indexes start the week with buying pressure, it would allow significant currencies to get a ground against the US Dollar.
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Forex Technical Outlook for 16 May 2022 to 20 May 2022
The University of Michigan's Preliminary Consumer Confidence Survey for May would be the main attraction for this week, where the current expectation is that the headline Consumer sentiment could move lower from 65.2 to 64.00 level. Moreover, the US Core Retail Sales and GBP CPI would grab investors' attention in finding the true path of western economies.
Although last Friday’s candle closed with bearish momentum, the US Dollar Index remained bullish. The price is still trading above the 103.40 immediate support level, which may extend the momentum to reach the 106.00 psychological number.
Finally, EUR/USD almost reached 2017 low while the broader market context did not show any sign of reversal. The weekly RSI holds its ground below the 30 level while the MACD Histogram keeps making new lows below the neutral level. Although a minor bullish correction is pending in this pair, it may make a new in the coming days to grab the liquidity before showing bullish signs.
The above technical analysis shows how the EURUSD maintained the bearish momentum while the most recent daily resistance is at the 1.0470 level. Furthermore, the MACD Histogram made a new low in the indicator window while there is no sign of divergence in the MACD line.
Therefore, although a bullish correction is pending in this pair, the selling pressure is solid as the CPI-driven selling pressure came after a substantial consolidation. In that case, investors may see a new swing low below the 1.0340 level as long as it trades below the 1.0470 level. On the other hand, the dynamic 20 EMA and 1.0500 level violation with a bullish candle would be the primary sign of the upcoming buying pressure.
GBP/USD bears maintained an intense selling pressure although the volatility is high below the 1.2400 key resistance level. The price made four consecutive bearish weekly closes where the sell-side pressure is getting weakened. The weekly RSI is below the oversold 30 levels, while the gap between the dynamic 20 EMA and the price is higher. The higher price action shows a buying possibility that needs clarification from the intraday chart.
This technical analysis shows the daily chart of GBPUSD where the most recent daily candles are volatile below the 1.2400 level. Moreover, the RSI became flat below the 30 levels in the indicator window.
Based on the daily context, a bullish corrective pressure is pending in this pair, where the main aim is to test the 1.2400 level in the coming days. On the other hand, any bearish rejection from 1.2330 to 1.2410 area would resume the current selling pressure towards the 1.2075 level.
AUD/USD price action has become critical where investors should put additional attention to the intraday chart to find a reliable trend direction. The weekly candle closed with rejection from the trendline starting from the August 2021 low, which is the primary sign of the possible buying pressure. Moreover, the price moved below the 0.6963 level and grabbed the sell-side liquidity that may influence bulls to build orders for buying pressure.
This technical analysis shows that the price ended the week with a bullish daily candle while the RSI tested the 30 oversold levels before aiming higher. In that case, the primary buying indication for this pair is to make a new swing high above the 0.6936 level.
Therefore, the primary aim is to find the price with a bearish rejection at the 0.6936 level that may extend the selling pressure towards the 0.6800 level. On the other hand, a bullish daily candle above the 0.6950 level would increase the buying pressure towards the 0.7200 area.
USD/JPY bulls failed to hold the momentum below the 129.87 key level, pushing sellers to make a daily close below the dynamic 20 EMA after 50 trading days. However, the price is still trading within the 128.00 to 126.97 demand area, which is the primary barrier for sellers.
The above technical analysis shows the price moved below the dynamic 20 EMA while the RSI shifted its direction from bullish to bearish. However, the current RSI level is still above the 50 neutral areas, indicating a bullish continuation sign.
Based on the current context, bears should violate the 127.97 support level before testing the 124.73 support area. On the other hand, a bullish daily candle above the 128.00 level would resume the current trend towards the 132.00 level.
Last week, gold bears made a massive gain from the 750 pips movement, extending the bearish channel formation. Moreover, the latest daily candle below the 1821.97 resistance level increased the bearish possibility toward the 1779.90 support level.
This technical analysis shows how the XAUUSD extended its position within the bearish channel. In the indicator window, the RSI reached the oversold 30 level in the indicator window that needs a strong rejection before showing a bullish sign.
Based on the current price action, XAUUSD bulls should wait for a bearish channel breakout before aiming for the 800 pips to move towards the 1919.58 level. On the other hand, aunty bearish pressure from 1830.00 to 1860.00 would increase the bearish pressure towards the 1779.00 level.
Bitcoin price lost 61% of its value from the all-time high of $69,000.00 to the recent swing level of $26,591. The selling pressure came from the bearish channel breakout, where the forecast was 52% down to the $17,800.00 level based on the Fibonacci Extension tool.
According to the volume profile analysis, BTC/USD failed to show a higher volume above the 47500.00 area, indicating that investors show less interest in trading at this pair due to its higher value. However, the volume is also low, below the 37,500.00 area, representing a true story of fear and greed. Moreover, the low volume below the 37,500.00 level indicates that the existing bullish momentum came with inefficiencies that need to be filled up.
This technical analysis shows the daily chart of BTCUSD, where the recent price remained bearish below the 34298.68 key resistance level. However, the RS reached the oversold 30 levels, indicating that sellers have done with the liquidity grab below the 30,000.00 level.
In the BTC/USD pair, the void in volume indicates that the current selling pressure could extend to the $11,900.00 level from where a long-term buying pressure may come. However, an immediate rebound with a bullish daily candle above the 34298.68 level would alter the current market structure and higher the price above the 47,000.00 area.
Overall, the broader economic sentiment is still toward the US Dollar’s side, where investors should wait for a strong rejection before aiming short in this currency. On the other hand, close attention to the US stock indexes is needed to where any selling pressure would be a bullish sign for the US Dollar.