After a lot of volatility, the US Dollar lifted near the yearly high of 93.437 from the end of March. After hitting the swing low, the USD index has strengthened by almost 3.5% and moved to the US Presidential election level between 92.00 to 94.00.
The USD strength came from the hawkish Fed policy with a bullish momentum in the short-term US yields until the closing of last week. The German Manufacturing PMIs went above the expected level of 64.2, creating a bullish spike in the EURUSD but failed to hold the momentum the next day.
This week will start with the AUD and CAD CPI, but the leading investors focus on the FOMC Statement and US GDP. Many analysts have said that the US economy is in an overbought situation, where any dovish tone may create a massive fall for the US Dollar. On the other hand, the current projection for US GDP is vital and may provide a positive sentiment for USD bulls.
Forex Technical Outlook for 26 July 2021 to 30 July 2021
DXY is moving within an ascending channel with minor support at 92.8 level. Moreover, the Golden cross is in play, where the 50 days moving average is crossing above the 200 day SMA, pointing out more bullish pressure in the price. Although the price is facing a regular divergence in RSI, it remains above the 55 levels. As a result, any buying pressure in the US Dollar may take the DXY at March 31 high around 93.5
So, considering the above economic releases, let’s see what might happen in the coming days:
EURUSD is moving within a volatile price structure below the 1.1831 resistance level. However, the price tried to move up last week with the support from stronger CPIs but failed to hold the momentum. As a result, the price closed on with a bearish daily close on Thursday that may extend this week.
In the above image, we can see the daily chart of EURUSD, where the price is very volatile below the 1.1831 level. The bearish pressure came from the Hawkish FOMC last month, and the recent volatility is an indication that sellers are losing momentum. Therefore, 1.1712 would be a significant price level for this week from where any rejection may take the price higher above the 1.1831 area.
However, any bullish correction from and resistance from dynamic 20 EMA may increase the selling pressure with the target of 1.1712 level. Therefore, investors should monitor how the price reacts to the weekly opening. As long as the hidden divergence is in play, any rejection and bullish daily close from the 1.1721 level may change the price trend.
GPB/USD had a strong bearish pressure below the 1.3800 psychological level that pushed the price below the 1.3680 support level. Although the price made a daily close below the 1.3680 support level, it rebounded the next day. However, the current price is still below the 1.3800 resistance level with a corrective momentum that may take the price lower.
The above image shows that the price trading is below the 1.3800 resistance level, where the dynamic 20 EMA is approaching the price to provide a minor resistance. On the other hand, the MACD Histogram moved to zero levels and aiming higher. In that case, A positive MACD Histogram with a bullish daily close above the 1.3800 level may invalidate the recent bearish pressure and take the price higher towards the 1.400 area.
The Cable sell-off came from the high beta/cyclical relationship to risk that bottomed the price at 1.3570 area, but the rebound came with the change in the risk sentiment that may continue until this week. However, a hawkish FOMC with a bearish daily close below the 1.3650 level may initiate a fresh bearish leg for GBPUSD.
AUDUSD bears remain active since the opening of last week that was boosted by the weaker retail sales data. However, the price rebounded from the mid-week with a false break below the 0.7323 support level. As long as the price is trading above the 0.7323 support level, it may correct higher before settling a price direction.
The AUDUSD daily chart shows that the price is within a correction after five consecutive bearish days. Moreover, the price is trading between the range of 0.7323 and 0.7439, while the dynamic 20 EMA is above the price and aiming lower. Therefore, any rejection from the dynamic 20 EMA or static 0.7439 would resume the selling pressure that may take the price towards the 0.7235 area.
In the indicator window, MACD Histogram is still bearish but squeezing to the zero levels, signifying a minor bullish correction in the price.
The USDJPY bears failed to hold the price lower below the 109.69 level that pushed buyers to join and take the price above the dynamic 20 EMA. Therefore, as long as the price is trading above the dynamic 20 EMA, it may continue the bullish pressure towards the 111.57 level.
In the USDJPY daily chart, the price within a volatile structure where the bears’ failure below the dynamic 20 EMA increased the buying possibility this week. The buying pressure in the USDJPY came with the broader US strength with a surge in US 10-year yields.
Now the price is approaching the 110.79 resistance level, and any bullish daily close above this level may take the price higher towards the 111.57 area. Moreover, in the indicator window, MACD Histogram moves to zero, and any bullish Histogram may increase the buying pressure.
The Gold is moving within a lot of volatility where the price showed a failure of holding the price above the 1814.72 resistance level. As a result, the price moved lower below the dynamic 20 EMA, and the selling pressure may extend below the 1814.72 level.
This week, a US Dollar strength may direct how the Gold will move this Week. Any Hawkish tone in the FOMC may take the price lower towards the 1765.00 level. On the other hand, a stable bullish daily close above the 1814.72 level may alter the current market structure and take the price higher towards the 1870.00 level.
Bitcoin bulls have activated as the price failed to hold below the 30,000 level this week and moved above the dynamic 20 EMA. In that case, any bullish price action above the 35,000 level may increase the buying pressure.
The price had a daily close above the dynamic 20 EMA in the daily chart, followed by a bearish rejection at 30,000 area. Moreover, in the indicator window, MACD Histogram is bullish and aiming higher.
Based on this price context, investors should find the BTCUSD price above the 35,000 level to consider the upcoming price direction as bullish that may move towards the 40,000 level.
Overall, the leading investor’s focus for this week will be how the FOMC statement releases this week. Currently, the US Dollar dominates the market where any sign of a dovish tone may change the current market sentiment. However, the current projection for US GDP is more vital than before, and if the result meets the expectation, we will find the price direction for the US economy.
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