The Federal Reserve had signaled a lower rate hike but it needs more data to confirm that the Fed is done with raising the rate.
The September Job Number came to 315K from where it moved down to 261K in October. However, the disappointing fact about the latest report was the unemployment rate that was edged up to 3.7%. This week, any sign of a weaker employment report could influence the Fed to hold the interest rate to increase, creating a blessing to the stock market.
Forex Technical Outlook for 28 November 2022 to 02 December 2022
The week will kick in with RBA Gov Lowe Speaks but investors should wait until Wednesday to see the US Prelim GDP q/q report.
Let’s see the important events from this week:
- RBA Gov Lowe Speaks on Monday
- CAD GDP m/m on Tuesday
- US CB Consumer Confidence on Tuesday
- ADP Non-Farm Employment Change on Wednesday
- The US Prelim GDP q/q on Wednesday
- The US Non-Farm Employment Change on Friday
Let’s proceed with the DXY outlook:
The weakness in the US Dollar is clearly visible from the daily trend but it is not confirmed yet. The current price is still below the 104.67 key support level, which is a strong barrier for bulls.
EUR/USD extended the volatility in the daily chart but the price closed trading within the range that was marked in the previous weekly commentary. However, there is a new swing low below the 1.0271 low, which is a primary sign that bears may regain momentum at any time.
This technical analysis of EUR/USD daily price shows how the volatility has extended after a strong bullish pressure. It is a sign that bulls are struggling to hold the momentum and bears may take control of the wheel at any time.
The new swing low of 1.0223 level came last week as a blessing to bears but for confirming a new bearish opportunity, a new swing low below this level is needed. Moreover, the highest trading volume level from November high to low is still below the price, which needs to be overcome before going short.
The dynamic 20-day Exponential Moving Average is way below the price, indicating a pending bearish correction. Moreover, the Relative Strength Index (RSI) showed selling pressure after reaching the 70% area mostly.
Based on the current price outlook of EUR/USD, the aggressive approach is to seek a bearish opportunity from the 1.0367 to 1.0480 area. However, a stable selling pressure below the 1.0322 high volume level could offer a conservative bearish opportunity, where the main aim is to test the 0.9939 key support level.
As the current price is still above the high volume 1.0322 level, a new swing high above the 1.0480 level could eliminate the bearish possibility and open the room for reaching the 1.0937 level.
- EUR/USD support levels to look at: 1.0223
- EUR/USD resistance levels to look at: 1.0480 & 1.0937.
The buying pressure in the GBP/USD price is potent as it showed a bullish pennant pattern breakout, backed by several minor demand level formations.
This technical analysis shows how bulls are active in the market, while the dynamic 20-day EMA is below the price. Moreover, the Relative Strength Index (RSI) is aiming higher above the 50% neutral level, where the touch of the 70% overbought level is pending.
The highest activity level from November low to high is still below the price, which is a sign of an active buyers’ presence in the market.
Based on the current market outlook, the upside pressure is solid for the GBP/USD price. However, a minor bearish correction is pending towards the 1.1764 level from where bulls may regain momentum. On the other hand, a solid breakdown below the 1.1766 level with a daily close might eliminate the bullish opportunity and extend the selling pressure to the 1.1200 area.
- GBP/USD support levels to look at: 1.1766.
- GBP/USD resistance levels to look at: 1.2667.
AUD/USD bearish correction found a bottom at the 0.6600 level from where bulls have regained momentum. Moreover, the buying pressure became potent after making a daily candle above the fixed range high volume level.
This technical analysis indicates how bulls have regained momentum above the 0.6701 high volume level, which increased the buying possibility. The dynamic 20 day EMA is below the 0.6575 support level and working as confluence support. Moreover, the RSI is in the buyers' zone, aiming for the 70% overbought zone.
As per the current outlook of the AUD/USD, any bullish pressure in the intraday price could offer a long opportunity, where the main aim is to test the 0.7135 level.
On the other hand, a bearish recovery below the 0.6700 level could extend a corrective bearish pressure towards the 0.6575 level. Moreover, a bearish daily candle below the 0.6570 level would validate the bearish possibility towards the 0.6300 level.
- AUD/USD support levels to look at: 0.6575, 0.6300
- AUD/USD resistance levels to look at: 0.6914.
As per the previous weekly USD/JPY forecast, bulls formed a breakout with a daily candle above the 140.78 resistance level, indicating a valid bullish correction after the impulsive selling pressure. As the price found the 143.48 level as a valid resistance, the bearish possibility is potent as long as the price trades below this level.
This technical analysis indicates the daily price of USD/JPY where divergence is present from the August to November swing level. It is a sign of a major trend reversal towards the sellers’ side, which needs validation from the lower timeframe.
The dynamic 20-day Exponential Moving Average is above the current price and acts as a resistance level. The indicator window shows the same story, where the current RSI level is above the 30% oversold area.
Based on the current price outlook, sellers’ have a higher possibility of extending the bearish pressure in the coming days. In that case, a new bearish daily candle below the 137.66 level is needed, which could validate the short opportunity for the coming days.
On the other hand, the bearish pressure is still valid as long as the price trades below the 142.48 resistance level. However, a bullish pressure above this zone with a daily close could invalidate the short opportunity for this week.
- USD/JPY support areas to look at: 137.66
- USD/JPY Resistance levels to focus: 142.48.
The bearish pressure in the XAU/USD price became weaker as bears failed to overcome the 1729.65 resistance becomes the support level.
Therefore, as long as the price trades above the 1729.65 level, the primary aim for this pair will be bullish.
The macro outlook is positive for XAU/USD bulls as the US Dollar Index showed decent selling pressure in recent trading days.
On the other hand, the buying pressure from the 1617.17 swing low came with a new high volume level formation at the 1761.28 level, which is acting as an immediate resistance level. However, the dynamic 20-day Exponential Moving Average is below the price, providing support to bulls while the RSI is above the neutral 50% level.
Based on the current XAU/USD weekly forecast, a bullish D1 candle above the 1761.28 high volume level could offer a long opportunity, targeting the 1807.41 resistance level.
On the contrary, a bearish daily candle below the 1728.00 level would be the primary sign of selling pressure in the market, which could offer a short opportunity after a considerable correction.
- XAU/USD support level to look at: 1729.55
- XAU/USD resistance levels to look at: 1807.41.
Since investors are still concerned about the Terra (LUNA), Three Arrows and FTX collapses, the buying possibility in the BTC/USD price has become fishy.
However, the selling momentum is still active and any development of these situations could attract sidelined investors to come back with solid momentum.
This technical analysis indicates a divergence between the price and RSI, while the most active level from the November swing is closer to the price.
Investors should closely monitor how the price trades at the 16,500.00 to 17199.76 zone as a bullish daily candle above this zone coils open a long opportunity towards the 21,000.00 area.
The alternative approach is to wait for the price to come below the 15,492.55 level and form a bearish D1 candle. In that case, the bears may extend the momentum towards the 13,000.00 level.
- BTC/USD support level to look at: 15,492.55
- BTC/USD resistance level to look at: 17,199.76.
The broader outlook for major forex pairs will be mixed for this week. However, closer attention to the Non-farm payroll and prelim GDP q/q is needed to find the future path of the US Dollar Index.