This week will be a corrective week with no central bank meetings. Therefore, the only economic event that can catch the investors’ sentiment is the US CPI. Consequently, we may expect a decent move followed by the market sentiment found after the NFP. The US Dollar maintained its strong position against a basket of currencies boosted by the better-than-expected US employment data. The unemployment rate decreased from 5.9% to 5.4%, while the Non-Farm Payroll came at 943K.
However, this week’s US inflation forecast is crucial that may come at 0.5% in July. This result would leave the yearly rate above 5,% but PMI surveys also expect an upside surprise. Moreover, this week’s US data will indicate whether the September tapering announcement will be realistic or not. Any surge in inflation would influence the Fed to move early.
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Forex Technical Outlook for 9 August 2021 to 13 August 2021
The US Dollar index strongly rebounded from 91.80 event-level and closed with a strong bullish daily close on Friday. The next resistance level is eyed at 94.00 where the price may head this week. However, investors should closely monitor how the US CPI releases.
So, considering the above economic releases, let’s see what might happen in the coming days:
EUR/USD moved above the 1.1831 static level and dynamic 20 EMA but failed to hold the momentum. Price formed several indecision candles on the daily chart and finally broke below the dynamic 20 EMA with a strong bearish daily close.
In the above image, we can see that the price became very volatile above the dynamic 20 EMA and broke below the level with bearish pressure from the strong NFP. Moreover, in the indicator window, MACD Histogram is bullish and moving down to the zero level.
This week, we may expect a new move due to the lack of releases from the US and the Eurozone. In addition, the bearish daily close of Friday created a gap between the price and dynamic 20 EMA of 70 pips. This gap indicates that a correction is pending in the price where the ultimate target of the bearish pressure will be towards the 1.1600 level. However, a rebound and daily close above the 1.1831 level may alter the current bearish expectation.
The situation is different for the GBPUSD, where bulls are supported by the V-shape recovery in the chart from 1.1670 swings low. Moreover, the strong US data made the price volatile but failed to show a significant selling pressure below the 1.3900 level. Although the strong NFP pushed the price to close with a bearish candle on Friday, it is still above the dynamic 20 EMA.
The UK economy is showing signs of recovery, which is stronger than the US Dollar. Moreover, investors will see the next phase of recovery from Thursday’s Prelim GDP q/q, which is expected to come at 4.8% from the previous release -1.6%. Therefore, any rebound in the price with the minor trend line breakout may create an impulsive bullish pressure in the GBPUSD that may continue towards the 1.4114 key resistance level.
On the other hand, a break below the dynamic 20 EMA with a negative MACD Histogram may start a broader correction to the price.
AUD/USD bulls failed to take the price above dynamic 20 EMA and static 0.7415 event level. As a result, the price started the week with a bullish correction, but it remained questionable after the RBA rate statement. Although the RBA provided a hawkish tone above the Australian economy, it failed to attract the market participants’ attention. As a result, the price moved down after getting a rejection from the dynamic 20 EMA.
The price is currently trading below the dynamic and static resistance level where minor channel support is in play. For this week, investors should wait for a bullish correction before reaching the 0.7235 level. However, the bearish sentiment is valid if the price is trading below the 0.7415 resistance level.
USDJPY disappointed sellers by forming a solid recovery and a bullish daily close at 109.31 support level. Overall, the price became a correction after the bearish breakout in the first week of July. Later on, the price made three consecutive lows with a corrective speed that decreases the bearish possibility. Lastly, this week, the price moved higher above the dynamic 20 EMA with a bullish daily close, followed by the strong US NFP.
Based on the daily chart, the immediate resistance level is 110.57, the primary target for this week’s possible bullish pressure. Moreover, a strong bullish daily close above the 110.57 level may increase the price towards the 111.57 area. The MACD Histogram is still bearish but squeezing to zero levels. Therefore a bullish price action above the dynamic 20 EMA and a positive MACD Histogram may boost the buying pressure.
Below the dynamic support, the next static support is at 109.33, and any break below this level may make a strong bearish pressure in the price towards the 108.00 area.
After long volatility, XAU/USD moved lower below the 1795 level with a massive bearish daily close. Moreover, the price is within the enormous selling pressure that started from June 2021.
In the above image, we can see the daily chart of XAU/USD, where the price is facing support from the 1765.00 static level. Moreover, the MACD Histogram moved below the zero levels, pointing out an intense selling pressure in the price.
In this context, the overall price direction will be bearish as long as bears hold the price below the 1795.00 level, where the ultimate target will be towards the 1726.32 support level.
BTC/USD successfully broke above the 40,000 key resistance level and aiming higher after a considerable correction and rejection from the dynamic 20 EMA. Therefore, as long as the price is trading above the 40,000 level, we may expect further buying pressure in the coming days.
In the BTCUSD daily chart, the bullish pressure started as soon as the price rejected the 30,000 level with strong fundamental support. Later on, the bullish pressure eliminated the almost three-month consolidation period, indicating a storm possibility of testing the 50,000 key resistance level.
On the other hand, if the price comes below the static 40,000 level with a strong bearish daily close, it may start a broader correction to the price.
Overall, this week’s main investors’ focus will be the US CPI, which is expected to come lower than expected. However, the US Dollar has remained in its strong position against other major currencies, and any surprise in the CPI may make the bullish pressure strong.