US President Joe Biden met G-7 and NATO leaders in the Whitehouse and asked for support to exclude Russia from the G20. However, he mentioned that the sanction would not deter Russia, but it would lead to a path of ending the invasion. The current Ukraine-Russia crisis has weighed the global economy besides the skyrocketing inflation. Major central bankers are not worried about acting too soon to hike interest rates, but it might be too late, considering the current global scenario.
Inflation in the Eurozone and the US are already at a record high where the ECB’s commitment is to focus on price stability only. On the other hand, the US Federal Reserve aims to keep the economic growth with price stability and maximum employment. However, the ECB President Christine Lagarde showed some hawkish tone in the last statement, while other ECB members hinted at a rate hike before 2023. Although EURUSD passed a volatile week, bulls failed to show any buying momentum above the 1.1100 level.
The new coronavirus variant has become a matter of tension for the EU. The new strain, BA.2, triggered the record contagion in Germany with a growing number of cases in the UK, France, and other EU countries. In that case, any lockdown implication like China would be an alarming sign for the global financial market.
Forex Technical Outlook for 28 March 2022 to 01 April 2022
Investors will have a volatile week due to the monthly shift where the Non-farm payroll would be the main attraction. As per the current projection, the NFP may come at 485K, down from last month’s 678K. Another important release is the Canadian GDP which may grow by 0.2% against the previous release of 0.0%. The better than expected GDP report would increase the selling pressure in the USDCAD price, which is currently trading above the 1.2450 bottoms.
The US Dollar showed strength on Monday after US Federal Reserve Chairman Jerome Powell's hawkish statement regarding the US economy. During a press conference, the Fed noted further rate hikes in May with the possibility of reducing the balance sheet.
The hawkish statement triggered the government bond sell-off, which sent the US Dollar index higher. As a result, the price tested the 97.79 key support level and formed a strong buying momentum. Therefore, the price showed consecutive positive trading days with the weekly closing at 98.80 area. Thus, the dynamic 20 EMA carry would be the major buying momentum for DXY that increased the possibility of testing the 100.00 level.
The border market trend for EUR/USD is bullish as the price made consecutive swing lows at 1.1124 and 1.0810 levels. Although the price moved up from 1.0810 level with a corrective momentum, it failed to make a structure break. As the current price trades below the 1.1124 resistance level, we can expect the bearish pressure to continue.
This technical analysis shows a bullish crossover in MACD Line with positive histograms, which is a sign of buyers' presence in the price chart. However, the price action is corrective within the bearish channel where the bearish possibility is present until the price forms any channel breakout.
Based on the current price structure, investors may experience further bearish pressure in the EURUSD price towards the 1.0900 support level from where a buying pressure may come. In the longer-term perspective, the bullish structure break at the 1.1124 level would be the first sign of trend reversal. On the other hand, the break below the 1.0900 level would increase the selling pressure towards the 1.0600 level.
GBP/USD is trading within a long-term bearish trend where the 1.3000 level is the swing low that came with a bearish structure break. However, the buying pressure from the 1.3000 level failed to reach the 1.3412 supply zone and rebounded below the dynamic 20 EMA. Therefore, the upcoming price direction will be bearish as long as bears hold it below the 1.3297 swing high.
This technical analysis shows a bullish MACD Histogram with a crossover in MACD lines. However, the bullishness in the MACD Histogram has become choppy with the price reversal from dynamic 20 EMA, opening rooms for downside pressure.
In this context, bears are more likely to extend downside momentum towards the 1.3000 level. On the other hand, bulls should closely monitor how the price trades at 1.3297 swing high where a strong bullish D1 candle above the 1.3300 would increase the possibility of testing the 1.3412 drop-base-drop supply level.
The intense bullish pressure in AUD/USD increased the possibility of testing the 0.7555 swing high that will complete the W price pattern. However, before moving lower from the 0.7555 key supply level, the price may grab the liquidity from 0.7560 to 0.7620 area.
The above technical analysis shows that the buying pressure in the AUDUSD has become weaker before reaching the 161.8% Fibonacci Extension level from 7th March high to 15th March low. On the other hand, the MACD line overextended at 0.00737 level, while the Histogram became flat.
In this week, the bearish possibility in this pair is solid as W pattern and mean reversion; both will work as reversal signs. However, investors should wait until the liquidity grab from the open space above the 0.7555 level with an appropriate reversal candlestick formation.
The 6.4% surge from 114.97 swing low indicates that there is no one to stop the wheel of the USDJPY price. However, the long-term trend is bullish, where the recent extreme buying pressure might correct lower before showing a further gain.
The above technical analysis represents an extreme buying condition in the MACD Histogram that may calm down with a corrective bearish pressure. Moreover, there is a 350 pips gap with the weekly closing price and dynamic 20 EMA, which opens the possibility of a bearish correction in the price.
This week, the aggressive approach should take short trades from intraday bearish structure break under a tight risk management scenario. On the other hand, investors should wait until the price shows any massive exhaustion from the top.
The major trend in the XAU/USD daily chart is bullish, which is visible on the price chart from consecutive higher highs. On the other hand, the war-driven sentiment and rate hike pressure are bullish factors for the Gold.
The above technical analysis shows the perfect bearish channel breakout with a daily close above the dynamic 20 EMA. Later on, the price made a new high above the 1949.86 level before closing the week with an inside bar formation. On the other hand, the MACD Histogram lost the selling momentum, which increased the bullish possibility.
Therefore, the price is more likely to continue the bullish trend towards the 2008.00 level within this week. However, the bullish sentiment is valid as long as bulls hold the price above the dynamic 20 EMA in the daily chart.
BTC/USD seems like initiating a bullish trend as the recent buying momentum from the ascending triangle became strong. However, according to IntoTheBlock’s Global In/Out of the Money (GIOM) model, the BTC/USD price may face a barrier to break to the 43K to 50K range. On the other hand, another key tool, Market Value to Realized Value (MVRV), shows a spike, representing that short-term HODLers are in price and may realize the gain by selling the instrument. In the last three times, BTC offered a massive crash from 44K or higher price level in the previous three times while the MVRV level was around 6%. Therefore, if the history repeats, we may expect another selling pressure in the BTC/USD price.
The above technical analysis represents how bulls are strong by taking the price above the dynamic 20 EMA, followed by an ascending triangle breakout. On the other hand, the MACD Histogram shows a buying pressure while the current price remains near the 45,741.94 resistance level.
Overall, the global economy is still hot due to the Ukraine-Russia war and rising inflation. Moreover, the recent increase in COVID-19 infection in the Eurozone would increase the volatility in the forex market. In that case, investors should maintain a robust risk management system by lowering the lot and widening the stop loss.
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