The US Retail sales moved higher by 1.7% in October due to increased e-commerce and holiday sales. However, the nominal figure is not enough to offset the rising inflation tension. Besides, Housing supply measures moved lower by 0.7% with a surge in housing demand.
Currently, the US economy is the strongest as the inflation is hotter, the labor market is rebounding, and more spending party is coming from Congress. Besides, the primary focus for investors is PMIs, as they are forward-looking indicators. The possibility of the third fed rate hike is alive for next year, clearly indicating America’s supremacy.
Coming to the Eurozone. Risks for economic growth beat the European single currency. An immediate spike in the COVID-19 cases across the Eurozone raises concerns that Germany could follow the lockdown implementation like Netherland and Austria. Besides, the Chinese economic growth remained weaker with a shaky demand in the European exports. In this situation, the ECB might struggle to recover from the rising inflation pressure, an increase where a rate hike might negatively impact the fiscal health of European countries.
Forex Technical Outlook for 22 November 2021 to 26 November 2021
The coming trading days are eventful with a storm of US releases. The Prelim Market PMIs are expected to come on Tuesday, while the second reading of GDP for Q3 will be released this week. In addition, investors should focus on RBNZ Rate Statement, German Flash Manufacturing PMI, and BOE Gov Bailey Speaks, among other releases.
The US Dollar index maintained a strong position for bulls where the price shot higher at the 96.00 psychological number with strong bullish pressure. A stable bullish price above the 94.50 level is a positive sign for US Dollar bulls that may increase the price in the coming days. The near-term resistance level is at 97.70, which is the ultimate target of the USD bulls. However, a minor correction is still pending where the bullish possibility is intact until the price moves below the 94.50 level with a bearish daily close.
EUR/USD bears are aggressive in the daily chart after the dovish statement came from the ECB. Therefore, although there was a regular divergence in the price last week, bulls failed to hold the momentum above the 1.1400 psychological number.
The above image shows how the MACD Histogram is moving lower with a bearish NPN formation. Therefore, a new low in the Histogram would be another bearish sign for this pair. On the other hand, the massive bearish pressure below the 1.1400 level expanded the gap between the price and dynamic 20 EMA, where a mean reversion is pending. Therefore, based on the daily context, a bullish correction may take the price higher towards the 1.1400 level. A bearish rejection would resume the current bearish trend towards the 1.1187 support level. On the other hand, a stable price above the dynamic 20 EMA would increase the buying pressure towards the 1.1615 resistance level.
GBP/USD is moving within a broader correction where the current price is trading below the 1.3600 key level. However, the recent bearish pressure failed to test the bottom of the current trading channel and closed the week in the middle of 1.3600 to 1.3300 area. As a result, it opened two scenarios for GBPUSD investors where both bulls and bears have a chance to win.
The above image shows that the MACD Histogram is losing its bearish momentum and moving to the zero level where the dynamic 20 EMA is above the price, working as minor resistance. Based on this price structure, an immediate bearish pressure towards 1.3300 would open rooms for extending the channel towards the target of 1.3700. In that case, a bullish reversal candlestick formation would increase the buying possibility. On the other hand, the test of 1.3600 with a daily candle below the dynamic 20 EMA may influence bears to test the 1.3300 level in the coming days.
The broader market direction for AUD/USD is bearish as the price remained within a selling pressure from the first quarter of 2021. Although some minor bullish correction was seen in the second half of 2021, it was not enough to consider an impulsive counter momentum. As a result, a bearish breakout from the current trendline channel will extend the broader downside pressure that is more likely to work out.
In the AUDUSD daily chart, the MACD Histogram remained bearish with a strong selling pressure where the dynamic 20 EMA is working as minor resistance. In that case, a break below the 0.7176 level with a bearish daily candle would be an alarming sign for AUDUSD bulls that may extend the downside pressure towards the 0.7000 level in the coming days.
USD/JPY bulls maintained a strong buying pressure above the dynamic 20 EMA for many trading days. Moreover, the recent false breakout below 113.37 indicated that bears have failed to hold the momentum where bulls have a higher possibility of extending the current trend.
The above image shows how the dynamic 20 EMA supports the price where the MACD Histogram is losing its bearish momentum. In this context, a bullish daily close above 114.30 would increase the current bullish pressure towards the 116.00 psychological number in the coming days. However, the bullish possibility is valid as long as the price trades above the 113.37 level.
XAU/USD passed a volatile week where the intraday spike and consolidation indicated uncertainty about the global economic condition. However, the recent rejection at the 1870.00 level may increase the bearish correction in the price towards the 1832.00 support level in the coming days.
The above image shows that the XAUUSD is volatile where the dynamic 20 EMA is below the price and working as a dynamic support. Therefore, any bullish rejection from the 1832.00 level would be a potential buying opportunity in this pair towards the target of the 1900.00 area.
The BTC/USD moved lower after making the new all-time high here; the current price is bearish below the 59,500.00 level. Moreover, the price moved below the dynamic 20 EMA and made a new swing low at 55,756.00 area.
Based on the BTC/USD daily price structure, bears are more likely to take the price lower in the coming days. Therefore, any bearish rejection from the dynamic 20 EMA or 59,500.00 level would be a potential selling opportunity. On the other hand, a stable price above the dynamic level would increase the relief for Holder's.
Overall, investors will see a bunch of PMIs this week and it might provide signs for the upcoming global economic direction. Based on the current macroeconomic outlook, the US Dollar is still promising against the basket of currencies and it may extend its momentum in the coming days.