The output in the US economy continues to ramp up, even if the COVID-19 cases are showing a pullback in the consumer sentiment. In this situation, inventories should keep rising although consumer spending remains moderate. The housing sector has started to move into a better position and the rising in existing homes may soar the home price. Now investors should focus on how the construction spending and ISM Manufacturing index are coming this week. Any surge in the result with a better Non-Farm Payroll may keep the US Dollar’s dominance active.
On the other hand, the Eurozone economy remained stable in Q2 with better August PMI data. The services PMI remained unchanged at 59.7 while the Manufacturing PMI fell to 61.5 level. However, considering the recent recovery, the Eurozone economy may show additional growth in Q3.
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Forex Technical Outlook for 30 August 2021 to 03 September 2021
After a volatile week, investors may experience a corrective market momentum with the absence of high impact news, except for the Australian GDP, until Friday. Moreover, among other key events, Non-farm payroll may come at 750k, lower from last month’s 950k.
In the Dollar index, the price showed a strong recovery, coming from the dovish tone from the Fed during the Jackson Hole Summit last Friday. The price tried to move above the 31 May high of 93.43 but failed to hold the momentum. Therefore, a bearish pin bar formed at the 93.43 resistance level with a new low on the following day. Indicating that the price has a higher possibility of correcting lower in the coming days. In that case, the near term support level is at 92.0 level, where the price may head this week.
Overall, in this week, we need to see how the US Non Farm payroll is coming and before that a corrective momentum is highly expected.
Despite the broader US Dollar strength, bears failed to hold the EUR/USD price below the 1.1710 support level. The price moved below this level with a bearish daily close but rebounded higher immediately. Later on, the price corrected lower and made a bullish daily close above the dynamic 20 EMA.
The above image shows how the price closed the daily candle above the dynamic 20 EMA followed by a regular divergence in MACD. The extreme corrective momentum at the 1.1700 key level and a bullish daily close above the dynamic level are signs of an upcoming bullish pressure in the price.
The lack of economic releases from the US dollar may encourage buyers to control the market by taking the price at the 1.1900 resistance level. Above this level, a massive bullish pressure may happen towards the 1.21 level. However, the buying sentiment is valid as long as the price holds its momentum above the 1.1710 level.
GBP/USD remained volatile last week where the price tried to and failed to break the 20 July low. As a result, the daily candle closed with indecision at 1.3620 and moved higher above the 1.3670 level the next day. Currently, the price is trading below the dynamic 20 EMA, where any bullish daily close above it may extend the bullish correction towards the 1.3892 level.
In the above image, the GBPUSD closed with a strong bullish daily candle on Friday, followed by the dovish Fed. However, the bullish candle did not close above the dynamic 20 EMA. On the other hand, buyers’ presence at the 1.3670 may create another push upwards where the price may head above the 1.3800 before the Non-Farm Payroll release.
Investors should find a bullish rejection from 1.3700 to 1.3670 with a bullish daily close to rely on the possible buying pressure. On the other hand, any stable decline below 1.3600 may invalidate the current market structure.
AUD/USD showed an amazing recovery after crashing to the 0.7100 key support level, followed by the dovish RBA and hawkish Fed. However, the recent decrease in infection rates relieved investors with a V-shape recovery.
This week, investors should closely monitor how the Australian economy grew in the second quarter. The current projection is a 0.6% increase from the last quarter’s 1.8%, which is unsatisfactory.
In this context, a rebound and bearish daily close below the 0.7222 support level may make the current bearish pressure stable. However, any break above the 0.7319 with a bullish daily close may stabilize recovery and take the price above the 0.7400 level.
The volatility extended in the USDJPY as investors are still confused about the market direction. The price is trading within the range between 110.57 high to 109.00 level for a considerable time, and any breakout may start an impulsive pressure in this pair.
The above image shows that the price remained corrective at the 110.00 level where last Friday’s candle closed below the dynamic 20 EMA. Therefore, the price is more likely to extend the bearish pressure towards the 109.00 level from where a bullish pressure is expected. On the other hand, a break above the 110.57 level with a bullish daily close may alter the current market structure and take the price higher towards the 111.57 resistance level.
After a lot of drama, XAUUSD is finally above the 1800.00 level with a massive bullish daily close. Before moving higher last Friday, the price tried to break below the dynamic 20 EMA on the daily chart but failed. The short-term buyers’ presence eliminated the bearish pressure and made a new high above the 1809.61 level.
The above image shows that the price is moved higher from the dynamic 20 EMA with a strong bullish daily close. The US Dollar weakness from the dovish Fed may extend this week while buyers may take advantage of taking the price at 1845 level from where a bearish correction may happen.
However, investors should closely monitor how the Non-Farm Payroll is released. Any weaker result may take the XAUUSD higher towards the 1880.00 level.
BTCUSD bulls remained stronger after breaking above the 40,000 level, pushing the price towards the 50,000 level, as promised. However, the price showed some correction in the last few days, but bears failed to take the price below the intraday event level of 46737.20 level. Therefore, as long as the price is trading above the 46737.20 level, the buying possibility may extend towards the 60,000 level.
The above image shows that the dynamic 20 EMA is approaching the price and working as minor support. Therefore, the buying pressure is valid until the price is breaking below the 46737.20 level with a strong bearish daily close.
Overall, this week’s main investors’ focus will be the Non-Farm Payroll, ISM Manufacturing PMI, and Australian GDP. The broader US Dollar weakness may extend until the Job report surprises investors by coming above the 5.2% projected level.