Last week’s economic data showed that the US economy has remained resilient, where tighter policies could impact some sectors. Industrial production regained momentum in September, but some signs of slower growth are ahead, supported by manufacturing surveys.
On the other hand, the real estate sectors were affected by higher interest rates, falling 8.1% in September 2022. Investors should focus on leading economic indexes to point to a recession in the coming year.
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Forex Technical Outlook for 24 October 2022 to 28 October 2022
The ECB meeting will be the main event to look at this week, where another rate hike may come. Moreover, the US Q3 GDP forecast will show the country's performance after two consecutive weaker quarters. More insights and price-driving events will come from Bank of Japan and Bank Of Canada meetings.
Let’s see the important events from this week:
- French Flash Services PMI on Monday
- German Flash Manufacturing PMI on Monday
- CB Consumer Confidence on Tuesday
- AUD CPI q/q on Wednesday
- BOC Rate Statement on Wednesday
- EU Monetary Policy Statement on Thursday
- US Advance GDP q/q on Thursday
- Monetary Policy Statement on Friday
- CAD GDP m/m on Friday
Before moving to the core part, let's see the DXY outlook:
A strong bearish D1 close appeared in the DXY daily chart, where the selling pressure below the 20 DMA signals a bearish possibility in the coming days.
However, the 110.04 level would be the main barrier for sellers as bearish pressure below this level could signal more losses towards the 107.64 level.
EUR/USD provided several signs of sellers' weakness in the market as the price made multiple higher highs from the multi-year low. However, the recent price is very corrective, where a solid breakout is needed before offering a bullish trend-changing sentiment.
This technical analysis indicates how the price is trading corrective within a symmetrical triangle while three consecutive higher lows have formed. Moreover, the daily close above the high volume level from September high to low indicates larger buy orders in this pair.
However, it is not the right time to say that the US Dollar bull is over and Euro will take over the wheel. A proper breakout is needed in this pair with a D1 close above the 0.9881 static resistance level.
A bullish daily candle appeared above the 20 DMA while the current RSI was hovering at the 50% area. The recent change in the RSI level also indicates a possibility of a bullish breakout if it goes above the 60% area.
Based on the EUR/USD outlook for 24 October 2022 to 28 October 2022, the bearish trend trading opportunity is valid if the price closes below the 0.9750 minor swing low with a D1 close. It will indicate sellers' dominance in the market, targeting the 0.9536 level.
The alternative approach is to wait for the bullish symmetrical breakout and a correction before aiming for the 1.0193 level.
- EUR/USD support levels to look at: 0.9750, 0.9703
- EUR/USD resistance levels to look at: 0.9881
As per the previous GBP/USD outlook, the price showed a decent bullish pullback, but it needs more confirmations to provide a breakout trading opportunity.
This technical analysis shows how bulls form orders at the 1.1437 to 1.1057 consolidation zone. Moreover, the price reaches the near-term trendline resistance, where lots of trendline liquidity is above this zone.
Last Friday’s bullish daily candle appeared with several internal liquidity grabs before closing the candle above the September-October high volume zone. Moreover, a false break and daily close appeared above the 20 DMA while the RSI formed a bullish pre-breakout structure at the 50% zone.
Based on the current GBP/USD price forecast, a bullish daily candle above the 1.1437 level would open room for reaching the 1.1896 level. On the other hand, any bearish rejection from the trendline resistance with a D1 candle below the 1.1057 level would increase the bearish possibility towards the 1.0600 level.
- GBP/USD support levels to look at: 1.1057
- GBP/USD resistance levels to look at: 1.1437.
Last week, AUD/USD continued pushing lower but failed to make a new low below the 0.6172 level. As a result, the bulls grabbed the wheel and closed the week, eliminating all losses.
This technical analysis of the AUD/USD daily price indicates a descending channel breakout, backed by a fixed range high volume level from the September-October zone below it.
However, the price is still trading below the 20 DMA level, which may work as a primary barrier for bulls this week. On the other hand, the Relative Strength Index reached the oversold 30 zones before showing a bullish reversal.
Based on the AUD/USD price outlook, a minor bearish correction is needed to confirm the trendline breakout. Therefore any bullish opportunity from the 0.6210 to 0.6347 zone would be a buy zone. However, breaking below the 0.6200 level with a daily close would resume the USD bulls towards the 0.6000 level.
- AUD/USD support levels to look at: 0.6210
- AUD/USD resistance levels to look at: 0.6918.
USD/JPY reached 151.90, the highest level in the last 30 years, before forming bearish exhaustion with more than 500 pips in a single day.
This technical analysis shows the daily RSI of USD/JPY, which formed a strong recovery from the overbought zone. Moreover, the selling pressure came with a solid momentum by taking it towards the 20-day Exponential Moving Average level.
However, investors need more clues before considering it as a trend change. Particularly, the fixed range high volume level indicator, which shows the highest volume level in the last two months, is still below the price.
As per the current outlook, USD/JPY could show a bullish rebound from the 20 DMA, increasing the possibility of reaching the 150.00 psychological level.
However, breaking below the 144.12 level with a change in the new high volume level could offer a short opportunity, targeting the 140.40 support level.
- USD/JPY support areas to look at: 144.14
- USD/JPY Resistance levels to focus: 150.00.
Last week, XAU/USD extended the selling pressure and reached the target area with more than 300 pips gains to bears.
This technical analysis indicates a bullish possibility in the XAU/USD daily price, which formed a bullish daily candle from the significant demand zone. The Relative Strength Index formed a bullish breakout after a solid rebound from the oversold 30 zone.
However, the fixed range high volume level from Sep-Oct is still above the price with the 20 DMA, which needs to be overcome before forming a bullish breakout.
Based on the XAU/USD outlook, a minor bearish correction and bullish rejection in the intraday chart could offer a long opportunity targeting the 1700.00 level in the coming days. However, breaking below the 1615.00 level could eliminate the current structure, increasing the possibility of a bearish signal towards the 1560.00 area.
- XAU/USD support level to look at: 1615.14
- XAU/USD resistance levels to look at: 1684.10.
The BTC/USDT price seems to be reacting well to the US interest rate hikes. The strong correlation with the stock market also puts pressure on the crypto industry due to the valuation problem. Moreover, mass investors are getting involved in the crypto market, allowing high-impact news and events to affect the BTC price.
After the latest CPI announcement on 13 October 2022, there was a lot of volatility in the broader crypto market. However, in recent trading days, the movement has faded. As a result, investors now expect the BTC price to move higher until the next Fed meeting on November 1, 2.
The daily price of BTC/USD shows an extreme corrective momentum after breaking below the ascending channel support. However, the corrective momentum is visible from the 20 DMA and RSI level.
The 20-day EMA is closer to the price, while the hovers at the 50% area. In that case, a bullish breakout with a D1 close above the 19,944.68 level is needed before aiming for the 22,742.43 resistance level.
On the other hand, breaking below the 18,153.42 level could resume the bearish trend towards the 15,800.00 area.
- BTC/USD support level to look at: 18,153.43
- BTC/USD resistance level to look at: 19,944.68.
The US Dollar weakness provided a chance for other major currencies to come back, and this sentiment could extend until the US GDP forecast arises.