The October payroll report helped the Fed to decide on the $120 bn monthly asset purchase program. In October, there were 531K new jobs after the decent upgrade of 194K to 312K in September. Moreover, the unemployment rate decreased to 4.6%, from 4.8% with a stable participation rate. Considering the current job numbers, the wages and jobs growth is expected to increase until the end of 2021.
Based on the recent ADP report, the Nonfarm payroll may come above the previous report with a decrease in the unemployment rate of 4.5%. On the other hand, the service sectors are also strong, but investors should closely monitor PMI reports in the post-pandemic economic condition. The PMIs in Europe are following the same direction with German, French, and Italian by showing a peak from the summer. Overall, the expanding economy in the US and Eurozone is a sign that the US Dollar might keep bulls faith with the support from strong immunity systems in the winter season.
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Forex Technical Outlook for 29 November 2021 to 03 December 2021
Investors will see a monthly closing this week where the broader market is already in the yearly decrease period. Holiday seasons are coming, and there will be less trading activity in the financial market. A good number of economic reports will be released this week from where investors should focus on the Non-Farm Payroll and PMIs. Besides, the Fed chair Powell’s speech might keep the market volatile from Tuesday, during the monthly closing.
The yearly high price became questionable in the US Dollar index after the strong sell candle last Friday. The price shot higher from the 94.00 area with a massive buying pressure and reached the 96.90 level without any considerable correction. However, the week’s price ended with a strong bearish daily candle, making the 96.20 level important. Therefore, a small bullish correction at the weekly birth period might open the selling opportunity in the DXY. However, the bearish possibility is valid if the price trades below the 96.90 to 97.00 area.
EUR/USD bearing pressure became weak last Friday, where the intraday price moved above the near-term swing high for the first time in the last 20 trading days. Therefore, it is a strong sign that the trading volume from 1.1192 swing low came from bulls, and they may attempt to increase the position again from a discounted price.
The above image shows how the price reached the 1.1192 level with an impulsive bearish pressure where the gap between the price and dynamic 20 EMA extended. Currently, the dynamic 20 EMA is above the price and working as minor resistance. On the other hand, the MACD Histogram is bearish and moving to the zero level, which is a sign of possible bullish pressure.
As per the current price action, investors should find the intraday price to move low, and any bullish rejection from 1.1240 to 1.1200 area would be a decent buying opportunity in this pair. In that case, the ultimate target would be the 1.1500 level.
GBP/USD is trading within a channel where the most recent price is within the trendline support. Therefore, any bullish sign from the current support area may extend the correction by moving towards the 1.3718 area.
The above image shows that the price made a new swing low below 1.3400 level and formed a bullish reversal candle at 1.3300 key level. Moreover, the price formed a Hidden divergence with the MACD Histogram where the dynamic 20 EMA is above the price. Therefore, based on the current price action, the bullish possibility is potent as the price rejected the 1.3300 static support level with a bullish daily candle. On the other hand, a break below the 1.3300 level with a strong selling pressure may decrease the price towards the 1.3000 area.
The US Dollar beat AUD after the weaker than expected Australian economic report that pushed the price below the 0.6900 level with massive selling pressure. However, the monthly transition appears, and a bullish correction is pending due to the monthly profit-taking.
In the AUDUSD daily chart, the MACD Histogram showed a massive selling pressure where the Histogram made consecutive lows. Moreover, the extreme selling pressure increased the gap between the price and dynamic 20 EMA, where the test of dynamic resistance is pending. Based on the current price structure, AUDUSD may move higher towards the 0.7000 area as long as it trades above the 0.6800 key support level. A break below this level may make the price volatile before showing another bullish opportunity.
USD/JPY showed drama by moving above the 115.00 key resistance level, but bulls failed to hold the momentum. The daily candle became smaller, and the price crashed for more than 200 pips in a single day.
The above image shows regular divergence formed in the price where the price made new swing highs, but the MACD lines failed to follow it. Moreover, the daily bearish candle was very strong compared to the recent daily candles and moved below the dynamic 20 EMA.
Therefore, a small bullish correction in this pair might encourage bears to join again, where the ultimate price target would be towards the 112.79 level.
XAU/USD showed a false break above the 1831.91 level and moved below the dynamic 20 EMA with massive bearish pressure. Later on, the price corrected higher but still maintained a strong position below the dynamic 20 EMA.
In the above image, the MACD Histogram is bearish, where a failure to make a new low would be a buying opportunity in this pair. Overall, the price is within the range between 1760.00 to 1832.00 level. Therefore, the bearish opportunity from 1820.00 and bullish opportunity for 1760.00 are open for this pair.
The BTC/USD price moved below the 60,000.00 event levels with a massive bearish pressure where the current price is trading within the range between 60,000.00 to 54,390.00 level. Moreover, the recent price actions are corrective where an extension of the current correction is possible.
Based on the BTCUSD chart, the corrective price action below the 60,000.00 level with a Hidden divergence with the MACD Histogram is a sign of a possible bullish correction in this pair towards the dynamic resistance. However, a break below the 54,380.00 level with a strong bearish daily candle may lower the price towards the 48,000.00 area.
Overall, the monthly transition would increase the price volatility where investors should closely monitor how economic events are happening. Any hawkish tone from Fed Chair Powell might increase the US Dollars dominance for the coming weeks.