The US Dollar dominance remains active as soon as the Retail sales show an impressive result by coming at 0.7% up from the previous month. Moreover, the lower than expected US inflation indicates that the precious result might work as a peak. If so, investors should see how the Fed reacts to the stimulus program on this week's FOMC.
The week will start with important releases from the Reserve Bank of Australia monetary policy meeting, where the RBA will discuss the effect of lower employment, coming from recent lockdowns. The Federal Reserve will sit Wednesday and has a higher possibility of showing hints regarding tapering. Currently, the labour market remains under control while other fundamental indicators like retail sales and CPI are also favourable. Investors may experience volatility during the FOMC statement but will find further price direction for the US dollar from the next trading day.
Among other important releases, there are SNB monetary policy decisions and BOC Monetary Policy Summary. Therefore, most of the major currency pairs have reasons to show an expressive movement this week that will end with Powell’s statement on Friday.
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Forex Technical Outlook for 20 September 2021 to 24 September 2021
In this week's FOMC, the Fed may keep the interest rate unchanged at 0.25% but will hint about a further rate hike in the coming quarters. For GBP and CHF, the rate is expected to remain unchanged, but a hawkish tone may come from BOE policymakers.
The price showed a strong recovery in the US Dollar index by closing a daily candle above the dynamic 20 EMA that advanced more on Friday’s closing. Therefore, the overall outlook for the US Dollar index will remain bullish until the price comes below the 91.94 swing low with a bearish daily close. On the upside, the next resistance is at 93.73, where a bullish breakout may make another swing high in the coming days. However, the price may remain corrective before the FOMC meeting, where volatility is expected during the press conference.
The equal high at 1.1900 key resistance level raised a question regarding buyers dominance in the EUR/USD price. Last week started with a corrective momentum and closed the daily candle below dynamic 20 EMA on Thursday. Later on, the US Retail sales pushed another bearish momentum and the week closed with a new bearish swing low.
The above image shows how the price closes two consecutive days below the dynamic level. Therefore, as long as bears are holding the price below the 20 EMA on the daily chart, the price may come lower in the coming days. The MACD Histogram has turned bearish in the indicator window by moving below the neutral zone and making a new low.
In this price context, a bullish correction may happen at the opening of the week, but a new swing low below the 1.1711 level may take the price even lower towards the 1.1640 level. On the other hand, any rebound and strong bullish daily candle above the dynamic 20 EMA may alter the current market structure and take the price higher to grab the liquidity from the 1.1900 area.
GBP/USD remained volatile last week where the price showed a false break from the 1.3900 psychological level and closed the week with a bearish daily close below the dynamic 20 EMA. However, the price failed to show sufficient bearish pressure below the 1.3729 support level to rely on an upcoming bearish momentum.
GBPUSD bulls are still active from 1.3634 to 1.3570 demand zone from where the price showed an impulsive pressure at the beginning of 2021’s second half. Therefore, until bears are taking out the 1.3570 swing low, a bullish possibility remains active. In that case, any buy sign from 1.3677 and 13600 level with a bullish daily close above the dynamic 20 EMA may reverse the current bearish structure and take the price above the 1.3900 level. In the MACD Histogram, the momentum is neutral right now, and investors should find a positive histogram to rely on bullish pressure.
The Reserve Bank of Australia will disclose the Monetary Policy Meeting minutes where the current concern about the rising unemployment rate will be explained. However, considering the current economic outlook, RBA may show a dovish tone but investors should remain cautious about what is happening on the other side of the coin.
AUD/USD moved lower below the dynamic 20 EMA and ended the week with a bearish sentiment that may extend in the coming days. Therefore, the bearish MACD and price pattern may influence bears to test the 0.7130 demand zone this week. However, a rebound from the 0.7234 with a bullish daily close may start a broader correction to the price.
The volatility remained active in the USD/JPY price where the daily candle moved above the dynamic 20 EMA but failed to show any significant bullish pressure. The price is still trading between 110.71 to 109.00 level where a breakout is needed to rely on an impulsive movement.
The price moves sideways by violating the dynamic support and resistance levels where the MACD Histogram remained corrective. Therefore, as long as the price is trading below the 110.71 resistance level, we may expect a bearish correction in the price towards the 109.00 area.
Although the XAU/USD closed with a massive bearish daily close on Thursday and ended the week from below the 1762.00 support level, the bearish possibility is not strong. Still, more than 90% of the bearish candle’s body is above the 1762.00 support level, increasing the possibility of a bullish correction.
However, the MACD Histogram showed impressive bearish pressure by showing a negative histogram with new lows. In that case, a bullish correction towards dynamic 20 EMA is highly expected, where a new swing low below the 1762.00 level may initiate bearish pressure.
The bearish drama might end the BTC/USD as the price failed to break below the 42500 key support level with a bearish daily close. Moreover, the price moved above the 47000.00 event level and held bullish momentum for three trading days. Meanwhile, the dynamic 20 EMA is working support where a new swing high above the 49,000 level may initiate an impulsive bullish pressure towards 60,000 level.
The above image shows how the MACD Histogram squeezes to the zero levels and aiming higher, pointing out an upcoming bullish pressure. However, investors should remain cautious above the bearish pressure from the 51800.00 level that pushed the price below the 47,000.00 level.
Overall, there are many economic events this week with a higher possibility of showing a decent movement for both bulls and bears. However, the volatility from the FOMC meeting may require additional attention to the trade management.