The Headline and Core CPI of the US showed a downside momentum in November, rising to 0.1% and 0.2% consecutively. The FOMC also came with a 50 bps rate hike to the range of 4.25% to 4.50% area. Retail sales flopped with the industrial production, indicating a bumpy road ahead.
The European Central bank increased the central bank interest rate by 50 bps to 2.00% with a possibility of a quantitative tightening in March. The BoE also increased the rate to 3.5% besides a 50 bps hike for SNB.
Forex Technical Outlook for 19 December 2022 to 23 December 2022
After the FOMC and Consumer price date, investors might experience a trend trading opportunity as there are less significant releases for the US Dollar. However, the Canadian Dollar will be in the spotlight, besides the BoJ monetary policy statement.
Let’s see the important events from this week:
- BOJ Monetary Policy Statement on Tuesday
- CAD Consumer Price Index m/m on Wednesday
- CB Consumer Confidence on Wednesday
- CAD GDP m/m on Friday
- Core PCE Price Index m/m on Friday
Let’s proceed with the DXY outlook:
The bearish pressure in the DXY has faded and the price started to move within a descending channel. In that case, a bullish channel breakout with a daily candle above the 105.30 level could open a long opportunity, where the main aim is to reach the 107.17 level.
On the downside, any rejection from the dynamic 20 DMA could lower the price towards the 102.00 area.
The 50 bps rate hike and the fear of recession will be liable for the possible selling pressure in the EUR/USD price.
The bullish daily candle already showed a bearish exhaustion, backed by a corrective upside pressure. In that case, bears could take control of the price at any time and investors should remain cautious about it.
This technical analysis of the EUR/USD daily price shows a selling pressure, activated from the daily candle last Thursday.
There is a strong gap between the price and fixed range high volume level from November low to December high, which is at 1.0384 level. Moreover, the dynamic 20-day Exponential Moving Average is also below the price with a pending touch.
In the indicator window, the RSI reached the overbought 70% level, where a recovery below the 68% would increase the possibility of reaching the 50% level.
- EUR/USD bearish opportunity: In the coming trading days, bears have a higher possibility of taking the price down towards the 1.0384 level. In that case, any bearish opportunity in the intraday swing could provide a high probable short opportunity.
- EUR/USD bullish opportunity: The downside possibility in the EUR/USD price is valid as long as it trades below the 1.0736 level. If bulls take over this level, the next resistance to look at is the 1.1185 level.
Let’s see the price levels to look at taking positions in the EUR/USD:
- EUR/USD support levels to look at: 1.0384 and 1.0292.
- EUR/USD resistance levels to look at: 1.0736.
The selling pressure in the GBP/USD price has become potent as the price formed a bearish engulfing pattern eliminating latest 5 days’ bullish price action.
This technical analysis of the GBP/USD price shows how the bearish daily candle came below the August 2022 high, indicating a false break above it. Moreover, there is a new fixed range high volume level from the November-December peak, supporting the bearish momentum.
The dynamic 20-day EMA is still below the price, and an indecision candle formed from that support. Moreover, the RSI showed a rebound from the overbought 70% level.
In the indicator window, the MACD Histogram is at the neutral level while the MACD EMA reaches the overbought area. It is a sign that the upside pressure is still extreme in the market.
- GBP/USD bearish opportunity: The selling pressure in the GBP/USD daily price solid but another upside attempt with a rejection from 1.2291-1.2445 zone could offer a conservative bearish opportunity. In that case, the ultimate target is to test the 1.1800 key psychological level.
- GBP/USD bullish opportunity: The selling opportunity in this pair is valid until the price breaks above the 1.2445 level. Above this level, the next resistance level is at 1.2668 level.
Let’s see critical levels for GBP/USD this week:
- GBP/USD support levels to look at: 1.2120.
- GBP/USD resistance levels to look at: 1.2291.
As per the previous weekly forecast, AUD/USD continued pushing up but after reaching the September 2022 peak, selling regained the momentum and formed a bearish opportunity.
This technical analysis of the AUD/USD price shows a bearish daily candle below the ascending channel support and the dynamic 20 day EMA.
In the indicator window, the relative Strength Index (RSI) showed a rebound from the overbought 70% level and reached the 50% neutral level. In that case, 0.6738 to 0.6891 could work as a valid supply zone from where a bearish pressure may come.
- AUD/USD bearish opportunity: based on the current price behavior, a minor bullish correction and a bearish rejection from the 0.6738 to 0.6891 zone could trigger the bearish opportunity, targeting the 0.6500 level.
- AUD/USD bullish opportunity: The buying pressure in this pair has become corrective by forming an ascending channel. In that case, a strong buying pressure above the 0.6891 level is needed to form a bullish breakout, targeting the 0.7100 level.
Let’s see the critical levels to look at for the AUD/USD:
- AUD/USD support levels to look at: 0.6600
- AUD/USD resistance levels to look at: 0.6738 to 0.6891.
USD/JPY is still trading within a correction, where a bullish breakout and a stable price above the dynamic 20 DMA is needed to form a bullish trading opportunity.
This technical analysis of the USD/JPY price shows a corrective market momentum where the latest FOMC driven bullish candle failed to make a new higher high before the week is close.
The dynamic 20 DMA is the immediate support look at, where the current RSI level shows a rebound from the 30% oversold zone.
- USD/JPY bullish opportunity: Investors should monitor the price carefully where a bullish daily candle above the 20 DMA could offer a decent long opportunity towards the 140.00 area.
- USD/JPY bearish opportunity: The downside possibility is solid as long as it trades below the 20 DMA and 139.45 high volume level. In that case, any bearish rejection from the 138.00 to 140.00 area could offer a bearish trend continuation opportunity, targeting the 130.37 level.
Let’s see important levels to look at for USD/JPY:
- USD/JPY support areas to look at: 133.63
- USD/JPY Resistance levels to focus: 142.22.
In the XAU/USD daily chart, the CPI- driven bullish pressure was limited by the rate hike and recession fear. Therefore, a strong breakout from this zone is needed before forming a stable trend in this pair.
This technical analysis of the XAU/USD price shows a bullish trend continuation opportunity as the current price is carried by the 20 DMA as a support level. Moreover, the RSI is corrective but holding the momentum above the 50% neutral level.
- XAU/USD bullish possibility: Investors should wait for a bullish daily close above the 1807.65 level, which could trigger the long position, targeting the 1879.00 area.
- XAU/SUD bearish possibility: On the sellers' side, a bearish pressure with a daily candle below the 1766.35 level is needed. In that case, the short opportunity will be open where the main aim will be to reach the 1727.94 support level.
Let’s see important price levels that XAU/USD traders should look at:
- XAU/USD support level to look at: 1766.36.
- XAU/USD resistance levels to look at: 1807.58.
In the last three weeks, the Bitcoin price made four higher highs and four lower lows. If we connect these levels, a trendline will appear forming an ascending channel.
However, the bullish outlook is limited as Into The Block’s Global In/Out of the Money (GIOM) model indicates a lower possibility of overcoming the $18,000.00 level.
There were roughly 4.78 million addresses to buy 2.34 million Bitcoin with an average price of $20,267.00 is still out of money. From them some investors might close their position at breakeven, which could limit the further upside pressure in the BTC price.
This technical analysis of the BTC/USD shows how sellers have joined the market after having the price above the 17,405.61 level.
The immediate bearish recovery from the 18,407.44 swing high with a buy-side liquidity grab already showed a bearish possibility in this pair. Moreover, the dynamic 20-day EMA is above the price, while the RSI is corrective below the 50% neutral level.
- BTC/USD bearish opportunity: For the coming days, any minor bullish correction towards the dynamic 20 DMA could trigger the selling opportunity, targeting the 15,482.00 level.
- BTC/USD bullish opportunity: A new swing high above the 18,407.44 level is needed to form a bullish trend, where the ultimate target is to reach the 21,000.00 level.
Let’s see important price levels that BTC/USD traders should look at:
- BTC/USD support level to look at: 16,439.98
- BTC/USD resistance level to look at: 17,405.61.
Investors might face a corrective week as the holiday season is coming. However, a stable trend trading opportunity is waiting where the US Dollar would be the ultimate winner.