Forex Analysis – December 20, 2022
Our previous Forex analysis can be viewed here…
Technical Analysis
FOREX ANALYSIS: AUDUSD – Market indecision
As suggested in our previous chart analysis, price has been moving sideways.
AUDUSD is indecisive and is lacking trend direction. The moving averages have been crossing frequently, so the market indecision may continue. Price action has formed a range at 0.6680-0.6730 and price is moving within the range. The Christmas holidays are approaching, so the indecision may continue.
Trading opportunities could exist around the support and resistance areas of the range if AUDUSD moves out of the range (break-out trade). A break to the upside may find resistance around the longer-term moving average and around the horizontal levels at 0.6740, 0.6805, 0.6825 and 0.6845. A break to the downside may find support around 0.6670 and 0.6645.
FOREX ANALYSIS: EURGBP – Potential uptrend?
Price reversed around the 38.2% Fib level, as suggested in our previous analysis.
EURGBP is above the recent consolidation area, so price could start up-trending. The moving averages confirm this – they are bullish and steady.
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 0.8695, 0.8665, 0.8650 and 0.8640. A bullish move could find resistance around the recent swing high at 0.8755.
FOREX ANALYSIS: EURUSD – Up-trending. Market indecision?
As suggested in our last Forex analysis, EURUSD has been finding support around 1.0590 and has failed to swing higher.
Price is up-trending and is currently in a retrace phase. EURUSD is below the moving averages and is starting to look indecisive, so upside momentum may be weakening – the uptrend may becoming to an end. The moving averages confirm this – they are moving sideways.
Trading opportunities could exist around the moving averages and around any of the horizontal levels at 1.0445, 1.0510, 1.0580, 1.0655 and 1.0700.
FOREX ANALYSIS: GBPUSD – Indecision
GBPUSD found resistance around 1.2220, as suggested in our last analysis.
Price was up-trending but is now looking indecisive. The moving averages confirm the current indecision – they have been crossing frequently.
Trading opportunities may exist around the moving averages and around any of the horizontal levels at 1.1940, 1.2050, 1.2115, 1.2220, 1.2310, 1.2340 and 1.2430.
FOREX ANALYSIS: USDCAD – Indecisive. Possible upside?
As suggested in yesterday’s Forex chart analysis, price has been moving sideways.
The USDCAD is indecisive but price action has formed a high above recent highs, signalling potential upside. The moving averages continue to suggest 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 1.3500, 1.3530, 1.3570, 1.3625 and 1.3705.
FOREX ANALYSIS: USDCHF – Down-trending. Indecision?
Price has failed to swing lower, as suggested in yesterday’s analysis.
The USDCHF is down-trending but is starting to look indecisive. Price is currently in a retrace move. The moving averages confirm the market indecision – they are tightening and are moving sideways.
Opportunities to go short may exist around the horizontal levels at 0.9345, 0.9375 and 0.9430. A bearish move could stall or reverse around the moving averages and around the horizontal support levels at 0.9255, 0.9245 and 0.9215.
FOREX ANALYSIS: USDJPY – Market indecision
As suggested in our previous Forex analysis, the USDJPY has been moving sideways.
Price is currently indecisive. The moving averages have been crossing frequently and the Christmas holidays are approaching, so the market indecision may continue.
Trading opportunities could exist around the moving averages, around the diagonal support and resistance areas and around any of the horizontal levels at 133.75, 134.25, 134.70, 135.80, 137.75, 138.10 and 139.00.
METAL ANALYSIS: XAUUSD – Market indecision
GOLD has been moving sideways, as suggested in our last chart analysis.
Price is indecisive. The moving averages have been crossing frequently and the Christmas holidays are approaching, so the market indecision could continue.
Trading opportunities may exist around the moving averages and around any of the identified horizontal levels at 1762, 1767, 1776, 1797, 1805, 1809 and 1822.
Fundamental Analysis
Key Analysis
Today’s Major Scheduled News
0300 UTC – JPY – Interest Rate Decision
1330 UTC – USD – Building Permits
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 by another 0.25%, so rates are now set at 3.10%. The rate increases throughout 2022 have been to tackle rising inflation. The RBA have said that inflation is still too high, so further hikes are expected.
Canada (CAD)
The Bank of Canada (BOC) has hiked the interest rate by another 50bps, increasing the official bank rate to 3.75% – it’s seventh consecutive rate hike. The BOC noted that they will continue with quantitative easing and that economic growth remains strong, although it expects growth to stall for the first half of 2023.
Euro Area (EUR)
The European Central Bank (ECB) has increased it’s rates by 50bps, so the official rate is now at 2.50%. Europe is potentially entering recession. Projected inflation for 2023 is 6.3%.
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, which has been revised to 2.90% from 2.30%.
Switzerland (CHF)
The Swiss National Bank (SNB) have hiked rates by 50bps, bringing the official rate to 1.0% – it’s third rate hike after more than a decade of negative interest rates. The SNB signalled that rates could move higher, so further rate hikes are expected.
United Kingdom (GBP)
The Bank of England (BOE) have increased it’s official bank rate again. This time by 50 bps, so the official rate is now set to 3.50%. The BOE are expecting recession in the UK and forecast that CPI inflation has now peaked.
United States (USD)
The Federal Reserve has raised the official funds rate by an additional 50bps, so the rate is currently now set at 4.50%. The Fed expect rates to peak at 5.1% in 2023.
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