The data from last week suggest that the U.S. economy is losing momentum. In March, retail sales decreased by 1.0%, industrial production fell by 0.5%, and the consumer price index rose by a meager 0.1%.
Recent market volatility has decreased, but inflationary pressures remain elevated. It is a reason to believe that the FOMC will raise rates by 25 basis points at its meeting on May 3. Analysts also expect this to signal the end of the cycle of monetary tightening that began in March of last year.
In other major economies, the Bank of Canada (BoC) maintained its policy rate at 4.50% during its monetary policy meeting. The central bank stated that early 2023 growth is anticipated to exceed previous projections, and it is prepared to tighten monetary policy further if necessary. However, it anticipates that past rate hikes will slow growth as the year progresses and that inflation will swiftly decline to around 3% by mid-year.
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Forex Technical Outlook for 17 April 2023 to 21 April 2023
The week will kick in with the Empire State index, but nothing much is pending from the US Dollar. Investors might face an eventful week for other major economies as some countries will release CPI reports.
Let’s see important releases for this week:
- Empire State Manufacturing Index on Monday
- GBP Claimant Count Change on Tuesday
- Canadian Consumer Price Index (CPI) on Wednesday
- BOC Gov Macklem Speaks on Wednesday
- The UK CPI on Wednesday
- New Zealand CPI on Thursday
- US Weekly Unemployment Claims on Thursday
- French & German PMIs on Friday
Now move to the weekly price forecast:
In the previous week, EUR/USD provided a decent bullish momentum, which created a new yearly high. Traders have enjoyed 200+ pips upside movement, which opened a possibility of a correction this week.
This technical analysis indicates the pure candlestick chart where the latest high volume level since 15 March 2023 is below the current price. It is a sign that institutional traders are involved in buying positions, which may extend until there is a new high volume level above the current price.
This pair's long-term market trend is bullish as the price increases from left to right. The recent bullish break above the 1.1032 swing high with an immediate recovery shows that a lot of retail liquidity was present above this level market makers have filled those orders.
In the tradable range, the bullish liquidity sweep and reversal are present at the 1.0789 level, which is the lowest level of this zone. Moreover, the 1.1075 high would be significant as it came with a bearish liquidity sweep from Thursday’s candle.
Based on this outlook, the downside correction is pending as long as the price trades below the 1.1075 level. The current target level of the downside correction is the 1.0927 level, which is the lowest point of the 12-April imbalance.
On the other hand, the bullish continuation pattern needs another swing high formation above the 1.1075 level to validate the bullish trend, which might extend the price toward the 1.1200 level.
Like EUR/USD, GBP/USD extended the bullish momentum and provided a fresh trend continuation opportunity to bulls. However, the situation changed after the US retail sales report, where the rate hike possibility limited the gain.
This technical analysis shows a strong bullish pressure from the 1.1803 swing high, which left some retail liquidity above the double-top pattern at the 1.2446 level. The downside possibility has become potent as the recent price trades above the double-top pattern.
In the daily chart, a new 2023 high came with a bullish break of structure at the 1.2525 level, which came with buy pressure. However, the next day, upbeat US data appeared with an immediate bearish pressure, which ended the Friday session with a bearish liquidity sweep. As the price completed liquidity grab from the retail double top and yearly high, a bearish correction is pending for the coming days.
According to the fixed range high volume level, the highest activity level since 8 March 2023 is spotted at 1.2157 level, which is below the current price. Although a downside correction is pending, the upward pressure is intact until a new high volume level forms above the price.
Based on the weekly forecast, GBP/USD will likely come down to take orders below 1.2344 and 1.2274 swing levels. However, a failure to break below the 1.2344 level and a new swing high formation above the 1.2546 level would open a long opportunity, aiming for the 1.2650 level.
AUD/USD shows a similar price action to EUR/USD and GBP/USD, but bears showed less interest in this pair. Although a downside pressure was seen at Friday’s close, the momentum was not solid as it closed as an inside bar.
In the AUD/USD monthly chart, a bearish shadow is visible, followed by a long wicked candle in March 2023. As the current price is trading above the March 2023 closing price, bulls are more likely to take the price higher in the coming days.
In the daily chart, the latest fixed range high volume level is showing buying pressure as the current prices are trading above it. As a result, investors should wait for a new swing high above the 0.6805 level before opening a long position.
Based on the weekly forecast of AUD/USD, buyers should wait for the price to come below the fixed range high volume level and form a bearish daily close. It will increase the possibility of making a new swing low where the ultimate target is to fill the imbalance left on the 0.6550 level.
USD/JPY continued pushing higher throughout the week, and the recent price action shows additional buying pressure in the daily chart.
This technical analysis shows a strong buying opportunity in the USD/JPY price as the current price is trading above the March 2023 closing.
The daily price shows multiple demand zone formations, where the latest swing low at 132.03 level is the most important price to look at. A bullish structure break is available at the 133.75 level, backing the buying pressure.
The latest fixed range high volume level shows further buying pressure as last Friday’s daily candle came with a buying pressure by closing above it.
Based on the weekly forecast, USD/JPY could extend the buying pressure in the coming days. The primary target of the upside pressure is to test 135.00 and 137.00 levels in the coming days. However, breaking below the 130.64 level would invalidate the buying pressure and lower the price towards the 129.00 area.
Asper the previous XAU/USD forecast, the bullish continuation opportunity has provided 400 pips of gains. However, the price ended the week by eliminating all early gains where more clues are needed before taking a trade.
This technical analysis indicates the daily price of XAU/USD, where the latest fixed range high volume level shows buying pressure.
As per the high volume indicator, the upside pressure is solid as long as the price trades above it. Therefore, the primary trading idea is to look for long opportunities as long as it remains above the 1973.82 level.
The price went 13.98% higher from March 2023 low, and there is no sign of a significant reversal. Although last Friday’s daily candle closed with an engulfing bar it failed to break below any significant support.
Based on the weekly price outlook, a minor downside correction is possible in the XAU/USD pair, which could lower the price toward the 1981.00 level.
Therefore, any bullish rejection from the 1991.48 to 1981.77 demand zone with a daily close could resume the existing trend, where the ultimate target is to test the 2060.00 level.
Bitcoin (BTC/USDT) showed no sign of a bearish recovery and continued pushing higher after releasing the US Consumer Price Index (CPI) data.
The CPI noted a decline from 6% to 5%, and BTC/USD spiked higher with a bullish daily candle close. Later on, the retail sales data came with a positive sign for the US Dollar. However, the BTC/USD maintained its gains, which provided a sign of buyers' presence. Also, some prominent analysts provided signals that almost 6000 BTC short got liquidated during the upside pressure.
This technical analysis indicates the buying pressure in the BTC/USD price, where a bullish daily candle above the 30,000.00 psychological level is a blessing to bulls. Moreover, the fewer sellers' activity in the market after the US retail sales is another sign of buyers' dominance in the market.
Therefore, we may expect the price to increase as long as it trades above the 29,601.71 support level. However, breaking below this level could push the price down toward the 27,801.05 level from where bulls could resume the buying pressure.
Investors might find this week eventful in minor and cross pairs as several high impact releases are pending from Canda, New Zealand and the UK.