It was hard for investors to believe Fed Chair Powell’s decision to step back from the tightening policy would be eliminated by the inflation report. The Core CPI for the US jumped by 0.6% in August, triggering speculation of a 1% rate hike in this week’s FOMC.
In the Eurozone, the energy crisis remained at the top, but there are two developments in the area. The first one is EU leaders moving to an agreement on subsidizing through the windfall tax. The second one is Ukraine’s movement to the battlefield, capturing lost areas.
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Forex Technical Outlook for 19 September 2022 to 23 September 2022
The week will start with the Australian Monetary Policy Meeting Minutes, followed by the Canadian monthly CPI report. However, the main investors' attention will be on the FOMC meeting when a 75 bps rate hike may come.
The list of major economic events going to happen this week:
- RBNZ Gov Orr Speaks on Monday
- AUD Monetary Policy Meeting Minutes on Tuesday
- Canadian CPI m/m on Tuesday
- Federal Funds Rate and FOMC Statement m/m on Wednesday
- BOJ Press Conference on Thursday
- SNB Monetary Policy Assessment on Thursday
- GBP Official Bank Rate & Monetary Policy Summary on Thursday
- German & French PMIs on Friday
Before moving forward, let’s see the price outlook for the US Dollar Index.
The US Dollar index moved down in the daily timeframe but rebounded from the 107.66 key support level with strong buying pressure.
This week will be significant for the US Dollar Index, where any surprise from the Fed during the FOMC meeting would increase the volatility. However, the buying possibility is valid until selling pressure exceeds the 107.66 near-term level.
As per the last week’s projection, EUR/USD bulls appeared in the market but failed to make a stable bullish daily close above the 1.0088 key resistance level. Although the price pushed higher above this level, it formed indecision before moving sharply down due to the US CPI report.
The interesting fact about the EUR/USD is that the currency failed to make a considerably lower low and ended the weekly candle with an inside bar.
This technical analysis shows EURUSD bearish trend, where the price is decreasing by creating new lows. Based on the structure, the current trading range for EURUSD is 1.0366 high and 0.9867 low, where the current price is trading at the discounted zone.
The dynamic 20-day Exponential Moving Average is near the current price, where multiple bullish and bearish rejections were seen. On the other hand, the Relative strength index shows a bullish possibility in the price as the current RSI level is moving higher from the oversold 30 zone.
The broader market context of the EUR/USD is bearish, where a bearish rejection from the near-term resistance level is needed to trigger the sell trade. On the other hand, a daily candle above the 20 DMA would higher the price towards the 1.0197 level.
- EUR/USD Support Levels to focus: 0.9943 and 0.9800
- EUR/USD Resistance levels to focus: 1.0197 and 1.0366
GBP/USD continued moving down, sweeping the buy side liquidity above the 1.1647 swing high. As a result, the highest volume level from 1.2290 high to 1.1350 low moved from 1.1829 to 1.1492. The change in the high volume level clearly shows sellers' dominance in the market, where more downside pressure may come in the coming trading days.
This technical analysis shows how the daily price is trending lower in the GBP/USD daily chart, where the massive selling pressure from the dynamic 20 EMA resistance made a new swing low.
The Relative Strength Index remained steady below the 50% level, with a possibility of retesting the 1.1200 key psychological level.
Based on the GBP/USD price prediction from 19 September 2022 to 23 September 2022, the trading range will be between 1.1200 low to 1.1900 high. The selling pressure is very impulsive, with no significant bullish rejection during the week, but further selling pressure with a minor bullish recovery would be solid.
In that case, a bullish pressure during the weekly birth period with a bearish rejection from 1.1490 to 1.1590 area would be a solid bearish opportunity. On the other hand, a new swing high above 1.1590 would increase the buying possibility after a considerable correction.
- GBP/USD Support Levels to focus: 1.1200
- GBP/USD Resistance levels to focus: 1.1590 and 1.1733
As per last week’s AUD/USD price prediction, bulls recovered the price towards the 0.6900 to 0.7000 critical supply zone, where a bearish rejection appeared with a decent 224 pips gain. The price reached the 0.6683 target level before showing buying pressure.
This technical analysis indicates how bears are aggressive in the market, where the 0.6683 level has become hard to hold. The Relative Strength Index is bearish, below the 50% level, while the dynamic 20 EMA is immediate resistance.
As there is no lower low in the high volume level from August high to September low, the buying pressure may appear this week. Investors should monitor the 0.6683 area, from where any intraday buying pressure may increase the price towards the 0.6800 level. On the other hand, any selling pressure from 0.6770 to 0.6830 area with a bearish daily close could extend the loss towards the 0.6600 psychological level.
- AUD/USD Support Levels to focus: 0.6683
- AUD/USD Resistance levels to focus: 0.6770 and 0.6830
There is no significant change in the USD/JPY price prediction as last week’s price movement remained corrective without our marked zone.
As per last week’s USDJPY price prediction, the bullish trend continued and provided 225 pips of gains before showing a bearish rejection at the weekly decease period.
This technical analysis indicates how bulls are steady at the USDJPY price with no change in the high volume level from August low to September high.
The buying pressure is still strong above the 141.50 support level, while the dynamic 20-day EMA approaches higher to provide confluence support. On the other hand, the RSI reached a bullish peak before showing a bearish recovery.
Therefore, the USD/JPY price prediction will be towards the buyers' side, where the main aim is to test the 146.00 key resistance level. On the other hand, the break below the 141.50 support level with a change in high volume level would be a sign of a trend change towards the 137.72 support level.
- USD/JPY Support Levels to focus: 141.50 and 137.72
- USD/JPY Resistance levels to focus: 146.00.
As per last week’s XAU/USD forecast, XAU/USD pushed lower from the channel resistance and provided 640 pips of gain by reaching the 1660.00 target level. The confluence resistance from the high volume level and dynamic 20 EMA provides bears the opportunity to gain from a single swing.
However, XAU/USD reached the 2021 low and closed the trading week while grabbing sell-side liquidities.
This technical analysis of the XAUUSD price shows how bears head lower within the long-term descending channel. The current price is too far from the top or bottom of the channel, which is an alarming sign for bulls.
The dynamic 20-day resistance is above the price, while the Relative Strength Index (RSI) is at the buyers’ peak zone.
Based on the XAU/USD price prediction, a minor bullish correction is pending, while any bearish rejection from the intraday resistance would provide a bearish opportunity. On the other hand, the 1734.73 static level would be the ultimate barrier for sellers, as breaking above this level would indicate a trend change.
- XAU/USD Support Levels to focus: 1660.00 and 1600.00
- XAU/USD Resistance levels to focus: 1734.74.
Although the BTC price popped higher this month, the broader market context for this token is still bearish. Without extending higher from the 21880.80 high, the daily price became choppy before crashing below the 20,535.00 high volume level.
The selling pressure is also supported by IntoTheBlock’s Global In/Out of the Money (GIOM) model, which indicates that the next support area would be at the 19,096.00 level from where $417,800.00 valued BTC was bought from 721.000 addresses.
This technical analysis shows the selling pressure in the BTC/USD price where the macro bear trend is valid as long as the price trades below the 25,000.00 psychological number.
The dynamic 20-day EMA is above the price, followed by a false break above it, while the Relative Strength Index (RSI) is below the 50% level.
Based on the current BTC/USD price forecast, the bearish pressure in this pair is solid towards the 17609.99 support level in the coming days.
- BTC/USD Support Levels to focus: 17,609.99
- BTC/USD Resistance levels to focus: 25,000.00
The broader market is already priced in the 75 bps rate hike in this week’s FOMC. However, a surprise with a full 1% rate hike would increase the volatility in the market, where close attention to trade management is needed.