The rate hike party is on and joined by the Bank of England and Swiss National Bank (SNB). However, the US Dollar was the ultimate gainer throughout the week, except for the JPY.
Treasury yields from the US and Japan extended gains this week, but the upside pressure has become challenging. Finally, the Japanese Government agreed to intervene in the forex market as the Yen reached a multi-year low against the US Dollar.
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Forex Technical Outlook for 26 September 2022 to 30 September 2022
During the weekend, the Italian election will be the event to look at, which could result in a spike in the Euro price during the weekly open. Besides, central banks' speeches will be the main event for the week, which could provide a clue regarding economic policies.
The list of major economic events going to happen this week:
- ECB President Lagarde Speaks on Monday
- Fed Chair Powell Speaks on Tuesday & Wednesday
- USD CB Consumer Confidence on Tuesday
- CAD GDP m/m on Thursday
- RBNZ Gov Orr Speaks on Thursday
- USD Core PCE Price Index m/m on Friday
Before proceeding to the Forex Technical Outlook for 26 September 2022 to 30 September 2022, let’s see the outlook for the US Dollar index:
This week, the US Dollar index reached a record high, led by the rate hike and upbeat PMI. As a result, the USD index reached the 113.00 key level that was not touched since 2002. As the buying pressure is far from the dynamic support, a bearish pressure is pending before gaining higher.
If you were with our last week’s EURUSD price forecast, you have already grabbed beyond our target level with more than 250 pips of gains.
The selling pressure in the EUR/USD price was highly predictable as the market was already priced in with a rate hike. Moreover, with further tightening policies, the hawkish Fed made the US Dollar even stronger, leading to 250+ pips of bearish move in the EUR/USD price.
This technical analysis clearly shows the EUR/USD selling pressure, where the break below multiple swing lows is visible. Due to the impulsive selling pressure, the gap between the price and the 20-day EMA has expanded, which could increase the possibility of a bullish correction next week.
Moreover, the excessive selling pressure took the price near the 161.8% Fibonacci Extension level from the 6 September low to the 12 September high, which is at the 0.9664 level. The Relative Strength Index moved below the oversold 30 level, which is a reversal area.
Based on the EUR/USD price prediction, the primary aim for this week is to find a reversal signal from 0.9680 to 0.9600 level, which could increase the price towards the 0.9800 level.
The alternative trading approach is to wait for the price to come below the 0.9600 level, which could extend the loss to the 0.9400 area.
- EURUSD Important support levels: 0.9664 and 0.9600
- EURUSD important resistance levels: 0.9800 and 1.0000
GBP/USD reached our target level of 1.1200 level with more than 200 pips of gains. Moreover, the US PMI report on Friday led the selling pressure to extend more than 500 pips in a single day. As a result, the GBP/USD price reached a record low, below the Brexit low, from where a minor bullish correction is pending.
This technical analysis indicates how the GBP/USD price moved below the 1.1000 key psychological level with a massive bearish daily close last Friday.
However, the selling pressure came with no new low in the high volume level from September high to low, which could result in a bullish correction. Moreover, the gap between the price and 20-day EMA extended to 582 pips, which is another reason to expect a bullish correction.
The RSI breached the 30% level and touched the 20% level, indicating an oversold momentum.
The primary aim of the GBPUSD price is to find a bullish correction from the weekly opening towards the 1.1055 level, which is the 50% level of last Friday’s move.
However, the bullish trend change needs solid buying pressure with a new high volume level. The broader market trend is expected to extend the existing selling pressure until the price shows such a reaction.
- GBP/USD Support Levels to focus: 1.0800
- GBP/USD Resistance levels to focus: 1.1055 and 1.1200
AUD/USD tried to pull up but failed to hold the momentum above the 0.6683 support. As a result, bears took control over the price with extensive selling pressure, taking the price below the 0.6600 psychological level.
This technical analysis of AUD/USD indicates how the higher US interest rates and supportive PMI extended the loss in this pair. However, the price is yet to reach the 0.6500 psychological number with a strong gap with the 20-day EMA.
The RSI reached the oversold 30 area, which signals a bullish correction in this pair. Therefore, investors may experience buying pressure this week if a bullish rejection appears from the 0.6550 to 0.6500 area with a bullish daily close. This scenario could increase the buying momentum towards the 0.6683 area.
On the other hand, the sharp bearish pressure below the 0.6500 level could extend the loss towards the 0.6400 area.
- AUDUSD important support level: 0.6500
- AUDUSD important resistance levels: 0.6600 and 0.6683
As per last week’s projection, USDJPY reached the 141.50 support level with 140 pips of gain, but the bearish candle failed to close below this level.
One of the significant facts about the USD/JPY price is its change in the high volume level from August low to September high. Last week, the high volume level was found at 135.37 level, which was changed to 143.46 level. It is a sign that excessive buying and selling pressure is coming on the USDJPY price, which could result in a trend reversal.
The primary trading idea of this pair is to find a bearish opportunity as long as it remains below the 143.46 level. However, the current price is still above the dynamic 20-day EMA while the RSI rebounded from the overbought 70% area.
Based on the current market behavior, the selling pressure in the USDJPY could extend towards the 138.00 level. On the other hand, a strong rebound with a daily close above the 144.12 level could resume the current buying trend towards the 147.00 level.
- USD/JPY important support areas: 141.50 & 138.00
- USD/JPY Resistance levels to focus: 144.12.
XAU/USD completed the bullish correction last week before making another swing low below the 1650.00 level. The high-yielding US dollar grabbed investors' attention, which worked as a major bearish factor for this pair.
This technical analysis indicates the daily price of Gold (XAU/USD), where the major trend is bearish. As there is no sufficient bullish correction, we may expect the price to slide to the 1625.00 level.
The high volume level from the recent peak is unchanged at the 1675.00 area, while the dynamic 20-day EMA is above the price,
Based on the current XAU/USD price behavior, the selling pressure will likely extend as long as it trades below the 1675.00 level. On the other hand, a daily candle above the 1675.00 area could change the sentiment by targeting the 1700.00 level.
- XAU/USD important support level: 1625.00 & 1600.00
- XAU/USD important resistance levels: 1660.00 & 1675.00
While technical indicators are showing selling pressure in the broader crypto market, US regulators have started taking a serious approach to stablecoins after the recent Terra/Luna crash. The House of Representatives Financial Services Committee (FSC) is likely to ban several stablecoins like DAI, USDD, and FRAX. The main reason for the possible ban comes from the recent Terra-Luna crash in the Q2 of 2022.
Moreover, one of the largest issuers of Stablecoin, Tether, came under pressure after the US Judge in New York asked to produce documents confirming all USDT is actually backed by the US Dollar.
Meanwhile, the BTC price is recovering slowly from the massive selling pressure and needs to move above some crucial levels to indicate a trend change.
This technical analysis of BTC/USD shows a corrective price pressure in the daily chart, below the 19,787.88 high volume level and dynamic 20-day EMA. The Relative Strength Index is corrective below the 50% level but failed to reach the oversold 30% area.
This week, the bullish opportunity would be open if a daily candle closes above the 19,787.88 resistance level. On the other hand, the selling pressure may resume if the price continues pushing lower below the 17,609.99 level.
- BTC/USD important support level: 17,609.99
- BTC/USD important resistance level: 19,787.88
The rate hike from the Fed incurred a massive move in the global forex market, where most of the currencies have faced selling pressure against the US Dollar. Based on the current economic outlook, the USD bulls may continue after a considerable correction.