Forex Analysis – December 12, 2022


Our previous Forex analysis can be viewed here

Technical Analysis

FOREX ANALYSIS: AUDUSD – Market indecision

AUDUSD price action chart
AUDUSD 1 Hour Chart

As suggested in our last analysis, the AUDUSD reversed off the shorter-term moving average and horizontal level at 0.6750.

Price continues to be indecisive and lack trend direction. The moving averages have been crossing frequently and are currently moving sideways, so the market indecision could continue. If AUDUSD moves above 0.6845, price could attempt a bullish move higher.

Trading opportunities may exist around the moving averages and around any of the identified horizontal levels at 0.6635, 0.6670, 0.6740, 0.6750, 0.6795, 0.6830 and 0.6845.

FOREX ANALYSIS: EURGBP – Indecisive. Potential downside?

EURGBP technical analysis
EURGBP 1 Hour Chart

The EURGBP has been bearish, as suggested in our last Forex chart analysis.

Price continues to be choppy and indecisive but is moving within a bearish channel, suggesting potential downside. The moving averages confirm the market indecision – they are tight, moving sideways and crossing frequently.

Selling opportunities could exist around the moving averages, around the bearish channel resistance area and around the horizontal levels at 0.8605, 0.8640, 0.8650, 0.8665 and 0.8690. A bearish move may stall or reverse around the horizontal support levels at 0.8590, 0.8555 and 0.8550.

FOREX ANALYSIS: EURUSD – Up-trending. End of the trend?

EURUSD technical chart
EURUSD 1 Hour Chart

As suggested in our previous analysis, price has been bullish and has found resistance around 1.0590.

The EURUSD is up-trending and is currently nearing recent highs. Price is starting to look indecisive though and price action has formed a range at 1.0445-1.0590, so EURUSD could start moving sideways. The moving averages confirm the current indecision – they are tight and crossing frequently.

Trading opportunities could exist around the moving averages, around the support and resistance areas of the range and if price moves out of the range (break-out trade).

FOREX ANALYSIS: GBPUSD – Up-trending. End of the trend?

GBPUSD Forex analysis
GBPUSD 1 Hour Chart

Price reversed around the moving averages and has been bullish, as suggested in our previous chart analysis.

The GBPUSD is up-trending but is starting to look indecisive, signalling that the uptrend could becoming to an end. Price action has formed a tight bullish channel and the moving averages are becoming bullish, so the uptrend could continue.

Buying opportunities may exist around the dynamic support of the moving averages, around the bullish channel support area and around the horizontal levels at 1.1225, 1.2165, 1.2115 and 1.2050. A bullish move could be rejected or reverse around the channel resistance area and around the recent highs at 1.2340.

FOREX ANALYSIS: USDCAD – Up-trending. Possible indecision?

USDCAD Forex analysis
USDCAD 1 Hour Chart

As suggested in yesterday’s analysis, USDCAD has been bullish and found resistance around 1.3690.

Price is up-trending but is starting to look indecisive. Price action has formed a potential range at 1.3570-1.3690. The moving averages are tight and moving sideways – confirming the current indecision.

Trading opportunities could exist around the support and resistance areas of the range and if USDCAD moves out of the range (break-out trade). A break to the downside may find support around 1.3500 and 1.3390.

FOREX ANALYSIS: USDCHF – Down-trending

USDCHF price chart
USDCHF 1 Hour Chart

USDCHF has been bearish, as suggested in yesterday’s Forex analysis.

Price is down-trending and is currently forming a swing lower. Price action has formed a bearish channel and the moving averages are bearish and widening, so the downside direction could continue.

Shorting opportunities may exist around the dynamic resistance of the moving averages, around the trend resistance area and around any of the horizontal levels at 0.9330, 0.9370, 0.9435, 0.9455 and 0.9485.

FOREX ANALYSIS: USDJPY – Down-trending. End of the trend?

USDJPY Forex analysis
USDJPY 1 Hour Chart

As suggested in our last Forex analysis, price has been moving sideways.

USDJPY is down-trending but is starting to look indecisive, suggesting that downside momentum may be weakening. The moving averages confirm the potential indecision – they are moving sideways.

Trading opportunities could exist around the trend resistance area and around any of the horizontal levels at 133.75, 134.25, 135.80, 137.30, 137.70, 137.90, 139.00 and 139.60.

METAL ANALYSIS: XAUUSD – Up-trending

GOLD Chart Analysis
XAUUSD 1 Hour Chart

Price has been bullish and has been finding resistance around 1803, as suggested in our previous analysis.

GOLD is up-trending and is reaching recent highs. The moving averages are bullish and widening, so the upside direction could continue.

Long opportunities may exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 1780, 1767 and 1762. XAUUSD could be rejected or reverse around the horizontal resistance levels at 1803 and 1809.

Fundamental Analysis

Key Analysis

Today’s Major Scheduled News

0700 UTC – GBP – GDP
2330 UTC – AUD – Consumer Confidence
0030 UTC – AUD – Business Confidence

Interest Rate Analysis

A summary of recent central bank rate changes and statements…

Australia (AUD)

The Reserve Bank of Australia (RBA) has increased rates again, this time by another 0.25%, so rates are now set at 2.85%. The rate increases throughout 2022 have been to tackle rising inflation, which is potentially starting to pivot, so large rate hikes could be coming to an end.

Canada (CAD)

The Bank of Canada (BOC) has hiked the interest rate by 50bps, increasing the official bank rate to 3.75% – it’s sixth consecutive rate hike. The BOC have announced that further hikes are expected to tackle rising inflation.

Euro Area (EUR)

The European Central Bank (ECB) has increased it’s rates by another 75bps, so the official rate is now at 2.00%. Europe is entering recession. Rising inflation may result in further rate hikes.

Japan (JPY)

The Bank of Japan (BOJ) continues to keep interest rates at the record low of -0.10%. The BOJ does not currently plan to increase rates to tackle high inflation. It will however continue to buy bonds and intervene in the FX markets when needed.

Switzerland (CHF)

The Swiss National Bank (SNB) have hiked rates by 75bps, bringing the official rate to 0.5% – interest rates being positive for the first time in over a decade. The SNB signalled that rates could move higher, so further rate hikes expected.

United Kingdom (GBP)

The Bank of England (BOE) have increased it’s official bank rate again. This time by another 75bps. The official rate is now set to 3.00%. The BOE are expecting recession in the UK.

United States (USD)

The Federal Reserve has raised the official funds rate by an additional 75bps – it’s sixth rate hike in 2022. The rate is currently now set at 4.00%. The Fed have suggested that rates will continue to rise for the foreseeable future.

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