The higher inflation and fear of recession pushed investors to pass a volatile week. As a result, some forex pairs visited historic levels with no sign of a sufficient recovery. Therefore, the possibility of the rate hike in the July meeting is increasing where further information may come from this week’s retail sales.
The Bank of Japan and European Central bank will meet this week while both currencies are struggling against the US Dollar. The BOJ was expected to show a tightening cycle, but the latter may make a policy move by signaling no change. So now, it's time to see the maximum tolerance level for these central banks from this week's events.
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Forex Technical Outlook for 18 July 2022 to 22 July 2022
It will be an eventful week, starting with the NZD CPI inflation that may come lower than the previous report. AUD Monetary Policy Meeting Minutes will appear on Tuesday from where hints about the RBA’s plan to fight inflation will be seen. The most active trading day will be Thursday when the ECB and BOJ will provide their economic project with interest rate decisions.
The US Dollar Index (DXY) showed corrective bearish pressure on Friday, when the price spiked and moved lower to the 109.32 level. However, the long-term trend is still bullish, where further upside pressure from the dynamic 20 EMA support will extend the trend towards the 110.00 level.
For the first time since 2003, the value of the Euro and US Dollar has become the same. Moreover, the higher inflation and geopolitical uncertainty failed to show a solid bottom for the EUR/USD. On the contrary, the price keeps pushing down, and there is no new swing higher low in the daily chart.
This technical analysis shows how bears are dominating the EUR/USD price. The price has maintained making new lower lows since the beginning of 2022; still, there is no sign of a trend reversal. However, the current hope for bulls is the divergence with the RSI formed at the 1.10 psychological level. However, the existing trend is bearish, and a minor correction towards the 1.0268 level is pending.
In the weekly forex outlook, we can consider the upcoming price direction of EUR/USD as bullish toward the 20-day exponential moving average level. However, the broader market direction is still bearish. Therefore, an immediate rebound with a bearish daily candle below the 1.0000 level could resume the current trend towards the 0.9800 level.
The higher inflation and fear of recession made it difficult for GBP bulls to cope with the US Dollar’s dominance. As a result, the GBP/USD weekly chart keeps pushing lower for a considerable time where the weekly RSI is at the oversold zone. However, the higher timeframe price action failed to form a bottom where the immediate weekly support is at the 1.1424 level, 400 pips below the current price.
This technical analysis shows how the GBP/USD price trades within a descending channel where the weekly price closed below the trendline resistance. On the other hand, the gap between the price and dynamic 20 days Exponential Moving Average is about 170 pips, where the confluence static resistance is present at the 1.2050 level.
As per the GBP/USD weekly analysis, any bearish rejection from the 1.1880 to 1.1900 area would be a bearish channel extension opportunity. On the other hand, a strong bullish breakout would open room for testing the 1.2000 psychological resistance level before moving down towards the 1.1600 level.
AUD/USD price action is almost similar to the GBP/USD, but the volatility in the AUD/USD price is higher. The recent bearish trend moves within a parallel channel where price action below the dynamic 20 EMA is indecisive. However, the price failed to show a bottom with a new swing higher high, indicating that institutional investors are not ready to take the price up.
This technical analysis represents the daily market structure of AUD/USD, where the dynamic 20 EMA is slowly approaching the price as immediate resistance. On the other hand, the RSI is still above the oversold zone, although the selling pressure is active.
Investors may experience a bullish correction in the AUD/USD price based on the current condition. However, the trend might change from bearish to bullish if a daily candle appears above the 0.6877 resistance level. Any bearish rejection from 0.6830 to 0.6880 zone would be a bearing trend trading opportunity towards the target of 0.6600 level.
The lack of action by the BoJ against the excessive price depreciation of JPY against the USD keeps pushing the USD/JPY price higher. Moreover, the recent higher US inflation opened additional uncertainty to the financial market, making the US Dollar stronger against the JPY.
This technical analysis shows the daily price chart of USD/JPY, where the long-term bullish trend is visible. Furthermore, the dynamic 20 EMA resistance is below the 136.55 level, pushing up to support the bullish trend.
Based on the current price behavior, any trend continuation trading opportunity from 136.55 to 137.00 zone would push the price up towards the 140.00 level. On the other hand, the conservative approach is to wait for the price to move below the 136.50 level and lower to the 131.43 level.
XAU/USD selling pressure was strong last week, and the price reached the lowest price level since September 2021. Moreover, the current price action shows no sufficient buying sign that could help to find the bottom.
This technical analysis shows how the price trades below the 1722.16 resistance level while the gap between the price and dynamic 20 EMA is higher. In that case, a bullish correction may happen, but the oversold RSI should move higher to increase the bullish possibility.
Based on the daily chart, a bullish daily candle above the 1722.16 level would open the bullish opportunity toward the 1783.00 level. On the other hand, the price may visit the 1678.00 level if it fails to pass the 1722.16 barriers.
Bitcoin price has been trading within the range between 17578.00 to 21707.00 level since 21 July. On 7 July 2022, the price tried to move up from the consolidation zone but failed to hold the bullish momentum above the 21946.00 key resistance level.
On the other hand, the recent bullish pressure from 17663.24 appeared with a bullish Quasimodo formation that made the 18904.00 to 17663.00 areas a valid demand zone. In that case, further bullish pressure and new swing highs above the 22000.00 level would open a bullish opportunity in this pair after a considerable correction.
This technical analysis shows the BTC/USDT price where the current Relative Strength Index is approaching the 50% level. Moreover, the current daily price hovers above the dynamic 20 EMA level. In that case, a bullish daily candle above the 22000.00 level would open a bullish opportunity, supported by the RSI.
According to the Bitcoin weekly technical outlook, the bullish opportunity is valid after finding a daily candle above the 22000.00 level, where the main aim is to test the 26342.00 level. On the other hand, investors should wait for a bearish daily candle below the 17663.00 level and for further selling pressure towards the 15000.00 level.
The most eventful trading day will be Thursday when the ECB and BOJ provide their economic project with interest rate decisions. Besides, the US retail sales would work as a price-driving event for major forex pairs.