Last week, the US real GDP grew at an annualized rate of 2.4% in the second quarter, which was stronger than expected. While inflation and compensation costs have moderated, the Federal Open Market Committee (FOMC) prefers to observe sustained moderation before concluding that inflation is sufficiently low and stable.
At its July meeting, the Federal Open Market Committee increased the federal funds rate by 25 basis points. As they continue to leave their options open for further tightening, the committee's post-meeting communication has remained largely unchanged since June.
The European Central Bank (ECB) decided to increase its Deposit Rate by 25 basis points to 3.75 percent during its most recent policy announcement. However, the ECB remained reticent in its guidance on future policies beyond the July meeting. It is anticipated that the ECB will maintain the current level of interest rates for a protracted period, possibly until September.
The Bank of Japan, on the other hand, has adopted a more hawkish posture by adjusting its monetary policy stance, signaling a flexible rise in 10-year Japanese Government Bond Yields to a range between 0.50% and 1.00%.
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Forex Technical Outlook for 31 July 2023 to 04 August 2023
Let’s see the list of events to look at this week:
- CNY Manufacturing PMI on Monday
- RBA Cash Rate & Rate Statement on Tuesday
- ISM Manufacturing PMI on Tuesday
- ADP Non-Farm Employment Change on Thursday
- BoE Bank Rate & Monetary Policy Report on Friday
- ISM Services PMI on Friday
- Canada's Unemployment rate on Frida
- US Non-Farm Employment change on Friday
- Average Hourly Earnings m/m on Friday
Let’s see the market outlook from the weekly forecast:
As per the weekly outlook, EUR/USD came with downside pressure and ended the week with a bearish weekly candle. Investors should remain cautious this week due to the monthly closing on Monday.
Based on the weekly price action, a bearish weekly candle below the 1.0890 level is needed before aiming for a stable bearish trend. The 200-day SMA level is below this level at the 1.0730 level, which could open the possibility of a mean reversion. On the other hand, a bullish recovery and a stable price above the 1.0900 level could keep the current bullish bias unchanged. In that case, the current possibility is that the price could increase the upward pressure toward the 1.1200 key level.
A bearish W1 candle below the 1.0890 level could extend the loss this week. Moreover, a bearish pressure below he 55 and 100 day SMA levels could be dangerous for bulls. The current 200 SMA is at 1.0730 level, which indicates a pending mean reversion. A buying pressure is valid as long as bulls hold the price above the 1.0900 key level.
However, the week may come with bearish pressure, where the primary aim is to test the 1.0950 level. Below this level, we may expect the price to extend toward the 1.0900 level. The current 20-day SMA level is at 1.1060, and the upward pressure is solid as long as the price trades above this dynamic level.
A strong downward pressure was seen in the GBP/USD price, which can extend the momentum this week.
GBPUSD passed a volatile trading week due to the BoE policy rate decision and economic outlook. After the BoE, the price of the GBP/USD came below the 1.2900 psychological level, which is below the 20-day Simple Moving Average level.
As per the primary outlook, the downward pressure could extend in the coming days, where the immediate support level is found at 1.2680 level, where the 50-day Simple Moving Average works as a confluence support.
Below the 50 SMA, the next support level is present at the 1.2590 level; below this critical level could initiate a sharp downward pressure toward the 100-day SMA level. The current oscillator reading shows that the downside pressure is solid as the 14-period RSI remains steady below the 50.00 neutral line.
On the bullish side, a bullish trend might find relief if the price moves above the 1.2990 critical resistance level, with a D1 candle above the trend line resistance. Above this level, the next resistance level is at 1.3000 psychological level, before reaching the 15-month high at 1.3142 level.
AUD/USD showed a bearish rebound, as shown in the previous outlook. For this week, investors might experience a higher volatility for the lot of economic releases.
The current weekly price of AUD/USD price shows a bearish trend continuation opportunity, as the current 14-period RSI remains steady below the 50.00 line. Moreover, the 20 SMA remains corrective, but a minor bearish rejection is seen on the sellers' side from this level.
A clearer view of the corrective price action is present in the daily price, where the current price is trading below the 20-day Exponential Moving average level. Moreover, the 100 SMA is working as a major resistance at the 0.6765 level, which is below the 0.6800 critical resistance level.
On the bearish side, the current trend continuation opportunity is present where the main aim is to take the price at the 0.6550 to 0.6458 liquidity zone, which has remained untested since 2 June 2023.
On the upside, a bullish recovery above the 100-day SMA with a D1 candle above the 0.6800 level is needed before aiming for the 0.7100 area.
Investors have experienced a volatile trading week, where strong bearish pressure came before the BoJ with an immediate bullish recovery.
The weekly price of the USD/JPY shows a bullish inside bar formation after a solid two-bar reversal. Moreover, the 20-week EMA has been working as a confluence support for three weeks, which is a sign of a strong bullish trend continuation opportunity.
On the daily price, an immediate bullish recovery last Friday came with a sell-side liquidity seep, which can offer a bullish trend trading opportunity.
As the current price is trading about the 20-day EMA, with upward pressure is more likely to extend toward the 143.00 key psychological level in the coming days. The alternative approach is to seek a bearish opportunity after finding the price below the 138.00 level with a bearish D1 candle.
As per the previous outlook, the XAU/USD price shows a decent downside correction while the broader direction is still bullish. Investors should closely monitor how the price trades near-term support levels to find the bullish continuation opportunity.
The daily price of the XAU/USD price shows a bullish rebound in the 50.00 RSI line last Thursday. It is a sign that investors are interested in buying Gold despite the recent sell-off.
On the bullish side, the next resistance level from the 20-week SMA is at the 1970.00 level before approaching the 100-day SMA level. In that case, bulls should wait for the valid price above the 1980 static level before aiming for the 2000.00 key psychological level.
On the other hand, the downside pressure is potent as the next support level is found at the 1945.00 level, which is the confluence support from the 50-day SMA and 23.6% Fibonacci Retracement from the current bullish swing.
A bearish D1 candle below the 1940.00 level could initiate a strong bearish trend in this pair, where the current aim is to test the 1920.00 and 1900.00 key support levels.
According to prominent whale transaction tracker, a significant Bitcoin transaction involving 9,406 BTC worth approximately $275 million has transpired.
The largest single deposit involved 2,459 BTC, or $72.6 million, while another significant transaction involved 1,499 BTC, or $44.3 million, deposited into Binance.
Bitcoin whales, or major holders, are known to exert a significant market influence. When they make substantial deposits to exchanges, it is frequently a sign that they intend to sell in large quantities, which can result in transient market crashes. This adverse signal may indicate an imminent price decline, causing traders to be concerned. Alternatively, lesser investors may view this as an opportunity or risk they must evaluate.
In spite of the fact that Bitcoin showed promise by surpassing $30,000 last month, it has experienced a modest decline of approximately 1.57% over the past week. The market's bullish sentiment could be undermined if whales engage in additional enormous sales.
The bullish outlook is still valid in the BTC/USD price, where the main aim is to test the 32,000.00 key level. However, a downward correction is pending, which may extend towards the 100 day SMA support level.
After a volatile week, investors might experience a fresh month this week with a corrective structure. However, a fresh trend trading opportunity might come after the Non farm payroll release.