Investors have experienced a corrective trading week ahead of the yearly close. The spotlight was on the Bank of Japan’s summary of opinions, pulling the JPY higher from the multi-year low against the US Dollar.
However, market participants did not find it a sufficient positive development as the government is preparing for the $200 billion stimulus package, which can offset the sentiment from the higher interest rate.
Forex Technical Outlook for 26 December 2022 to 30 December 2022
Investors are going to face faded trading days with a lower volume as the holiday season appeared. There will be multiple bank holidays with fewer institutional trading activities.
Moreover, the economic calendar is dull with no high-impact releases.
Let’s proceed the weekly outlook with the DXY outlook:
The recent daily candles show a corrective momentum, where less selling pressure is seen above the 103.30 key support level. Moreover, the price started to move down within a descending channel. In that case, any bullish breakout with a daily close above the 20 DMA may initiate the bull run.
On the downside, a breakdown below the 103.30 support level is needed before aiming for the 102.00 area.
The global financial market has become corrective in terms of liquidity as the holiday season appeared. The effect is clearly visible on the price chart of EUR/USD that formed a rectangle pattern at the top of the current tradable range.
The daily price of EUR/USD trades bearish from the 1.0736 key resistance level. Moreover, the selling pressure is backed by a bearish Quasimodo from the top, where a bearish trend continuation opportunity needs a rectangle pattern breakout.
Moreover, a new fixed range high volume level formed above the current price, which is a sign that a higher investor activity appeared at the top. The dynamic 20 EMA is still below the price, while the RSI is corrective below the 70% overbought level.
- EUR/USD short opportunity: The selling pressure in the EUR/USD price is potent, where a bearish rectangle pattern breakout could offer a short opportunity, targeting the 1.0292 support level.
- EUR/USD long opportunity: The bearish pressure in the EUR/USD price is valid as long as it trades below the 1.0736 level. However, a bullish recovery and a daily candle above the 1.0740 level would open the possibility of reaching the 1.1185 level.
Let’s see the price levels to look at taking positions in the EURUSD:
- EUR/USD support levels to look at: 1.0574
- EUR/USD resistance levels to look at: 1.0736.
The bearish momentum in the GBP/USD price is valid as it formed a new lower low, opening a short opportunity toward the 1.1644 support level.
This technical analysis shows the current trading range of GBP/USD daily price, where the top is set at 1.2448 and the bottom at 1.1136 level. As the current price is trading at the premium zone, any bearish opportunity is more likely to provide a decent return.
The latest fixed range high volume level from November low to December high is above the current price, while a new bearish daily candle formed below the dynamic 20 DMA level.
- GBP/USD short opportunity: The current GBP/USD daily price is trading within a descending channel where a bearish trend continuation opportunity could lower the price in the coming days.
- GBP/USD long opportunity: The selling pressure in this instrument is valid as long as bears hold it below the 1.2200 high volume level. A bullish pressure above this level with a D1 close could open a bullish possibility towards the 1.2448 area.
Let’s see critical levels for GBPUSD this week:
- GBP/USD support levels to look at: 1.1644.
- GBP/USD resistance levels to look at: 1.2200.
AUD/USD sellers formed an ascending channel breakout with a daily candle close below the channel support. However, the recent price became corrective, and a test of the channel support is pending.
This technical analysis indicates how the selling possibility has become potent in the AUD/USD price.
The price moved higher and formed a bearish rejection after the channel breakout, which already provided the bearish potentiality. Moreover, the latest high volume level from the November to December peak is closer to the price.
The dynamic 20 EMA is above the price, working as a resistance while the RSI is extremely corrective at the neutral 50% level.
- AUD/USD short opportunity: The bearish possibility is potent in the AUD/USD price, where a bearish range breakout is needed to form a stable trend towards the 0.6546 level.
- AUD/USD long opportunity: The bearish possibility in the AUD/USD price is potent as long as it trades below the 0.6764 level. A bullish daily close above this level could initiate a consolidation with a bullish bias.
Let’s see the critical levels to look at for the AUD/USD:
- AUDUSD support levels to look at: 0.6546
- AUDUSD resistance levels to look at: 0.6764.
The broader outlook of the USD/JPY price is bearish but a minor bullish correction is still pending.
This technical analysis of the USD/JPY price shows how sellers are active in the market with a bearish channel breakout. However, bears failed to break down the 130.37 key support level and formed a bullish daily candle above this level.
The dynamic 20 EMA is above the price with a mean reversion possibility, while the RSI is aiming higher from the oversold 30% level.
- USD/JPY long opportunity: Investors should closely monitor the intraday price as the buying possibility came with a counter-trend momentum. Any bearish liquidity grab from London or New York session would be a safe approach to open a long position in this pair.
- USD/JPY short opportunity: Investors should wait for the price to come to the 138.11 to 135.75 zone to find a reliable bearish possibility. In that case, a short possibility is open, targeting the 130.00 area.
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.
The XAU/USD daily price is trading within a bullish vibe as the 20 DMA is carrying the price as support. However, the ascending channel formation is a sign of a bearish liquidity build-up, which can open a short opportunity at any time.
This technical analysis shows the current price trading above the 1785.03 key support, which is the primary barrier to bulls. Any bearish pressure below this level would come with an RSI divergence formation, which can boost the selling pressure.
- XAU/USD long possibility: The primary aim of this pair is bullish, where the target area is the 1857.39 resistance level, which is the top of the current channel.
- XAU/USD short possibility: Bearish possibility would be potent if a daily candle comes below the 1785.00 level, where the target level is at the 1727.45 area.
- XAU/USD support level to look at: 1785.00.
- XAU/USD resistance levels to look at: 1857.00.
There was a drop in the mining difficulty, which appeared from the downside pressure in the Argo Blockchain, a big name in the industry. Therefore, the trading of ARBK was suspended in the US and the UK from 9 December 2022.
The plummet in the mining difficulty brought some pressure on miners but for BTC/USD, it is a sign that the selling pressure is ending soon.
This technical analysis of the BTC/USD price shows how sellers’ formed a bearish channel breakout. The current price is extremely corrective below the dynamic 20 EMA. Moreover, the RSI is extremely corrective at the 50% level, indicating a possible bearish range breakout.
- BTC/USD short opportunity: As the broader technical and fundamental outlook of this instrument is bearish, any intraday bearish opportunity could offer a decent short opportunity, targeting the 15,500.00 level.
- BTC/USD long opportunity: Before going long in this pair, investors should wait for a daily candle above the 17,200.00 level. In that case, the primary price target will be the 18,547.66 level.
Let’s see important price levels that BTC/USD traders should look at:
- BTC/USD support level to look at: 15,500.00.
- BTC/USD resistance level to look at: 18,547.66.
The Holiday season appeared and investors are expected to experience a lower trading volume and activity. Moreover, the yearly profit-taking from larger institutions could shake the price with a reversal momentum.