Forex Analysis – December 16, 2022
Our previous Forex analysis can be viewed here…
Technical Analysis
FOREX ANALYSIS: AUDUSD – Market indecision
Price has been bearish.
AUDUSD was showing signs of a potential uptrend but recent price action has been very bearish. Price is now looking indecisive again, which the moving averages confirm – they are tightening and are moving sideways.
Trading opportunities could exist around the moving averages and around any of the horizontal levels at 0.6645, 0.6670, 0.6740, 0.6805, 0.6830 and 0.6845.
FOREX ANALYSIS: EURGBP – Potential uptrend?
As suggested in our last Forex analysis, price closed above the range resistance area and has since been bullish.
EURGBP was indecisive but recent price action has been very bullish. Price is above the recent consolidation and the moving averages have crossed bullish, so EURGBP could start up-trending.
Opportunities to go long may exist around any of the key Fib levels, around the dynamic support of the moving averages and around any of the horizontal levels at 0.8665, 0.6550 and 0.8640.
FOREX ANALYSIS: EURUSD – Up-trending
EURUSD has been bullish, as suggested in our last analysis.
Price is clearly up-trending and is currently in a retrace move. The moving averages are bullish and widening, so the uptrend may continue.
Long opportunities could exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 1.0615, 1.0590, 1.0510 and 1.0445. A bullish move may be rejected or reverse around the recent swing high at 1.0700.
FOREX ANALYSIS: GBPUSD – Up-trending. End of the trend?
GBPUSD has been bearish.
Price is up-trending but recent price action has been strongly bearish. The GBPUSD is below the moving averages and is forming a large retrace move, so upside momentum could be weakening – the uptrend could becoming to an end.
Buying opportunities may exist around the horizontal levels at 1.2165, 1.2115 and 1.2050. A bullish move could stall or reverse around the moving averages, around the previous diagonal support area (as resistance) and around the horizontal levels at 1.2310, 1.2340 and 1.2430.
FOREX ANALYSIS: USDCAD – Indecisive. Possible downside?
As suggested in our previous chart analysis, price is currently finding resistance around the bearish channel resistance area.
The USDCAD is indecisive but is moving within a bearish channel, suggesting potential downside. The moving averages suggest continued indecision though – they are tightening and are moving sideways.
Trading opportunities could exist around the support and resistance areas of the bearish channel, around the moving averages and around the horizontal levels at 1.3500, 1.3530, 1.3570, 1.3675 and 1.3690.
FOREX ANALYSIS: USDCHF – Down-trending
Price reversed around 0.9295, as suggested in our previous analysis.
The USDCHF is clearly down-trending and is currently in a retrace phase. The moving averages are bearish and steady, so the downside direction could continue.
Opportunities to go short may exist around the longer-term moving average, around the trend resistance area and around the horizontal levels at 0.9320, 0.9375 and 0.9430. A bearish move could find support around the shorter-term moving average and around the horizontal levels at 0.9295, 0.9245 and 0.9215.
FOREX ANALYSIS: USDJPY – Market indecision. Potential upside?
As suggested in yesterday’s Forex chart analysis, the USDJPY continues to look indecisive.
Price is choppy and is lacking trend direction. The moving averages confirm the market indecision – they have been crossing frequently and are moving sideways.
Trading opportunities could exist around the moving averages and around any of the identified horizontal levels at 133.75, 134.25, 134.70, 135.80, 137.30, 137.75, 139.00 and 139.55.
METAL ANALYSIS: XAUUSD – Market indecision?
GOLD has been bearish.
Price was up-trending but is now looking indecisive. The moving averages confirm the current indecision – they are moving sideways.
Trading opportunities may exist around the moving averages and around any of the identified horizontal levels at 1740, 1748, 1762, 1767, 1780, 1805, 1809 and 1822.
Fundamental Analysis
Key Analysis
Today’s Major Scheduled News
0700 UTC – GBP – Retail Sales
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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