Forex Analysis – December 23, 2022
Our previous Forex analysis can be viewed here…
Technical Analysis
FOREX ANALYSIS: AUDUSD – Market indecision
As suggested in yesterday’s analysis, the AUDUSD has been moving sideways.
Price is indecisive and is lacking trend direction. The moving averages are tight and moving sideways, so the current indecision could continue.
Trading opportunities may exist around the moving averages and around any of the identified horizontal levels at 0.6645, 0.6730, 0.6760 and 0.6805.
FOREX ANALYSIS: EURGBP – Up-trending
The EURGBP has been bullish and has swung higher, as suggested in yesterday’s Forex analysis.
Price is clearly up-trending and is currently forming a swing higher. The moving averages are bullish and widening, so the upside direction may continue.
Buying opportunities could exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 0.8765, 0.8715 and 0.8695.
FOREX ANALYSIS: EURUSD – Ranging
As suggested in our previous analysis, price reversed around the range resistance area and has been moving sideways.
The EURUSD continues to be indecisive and range between 1.0580-1.0655. The moving averages are tight and crossing frequently, so the market indecision could continue.
Trading opportunities may exist around the support and resistance areas of the range and if price moves out of the range (break-out trade). A break to the upside could find resistance around 1.0700. A break to the downside could find support around 1.0510 and 1.0445.
FOREX ANALYSIS: GBPUSD – Down-trending
Price has been bearish and has been finding support around the bearish channel support area, as suggested in our previous chart analysis.
The GBPUSD is down-trending within a bearish channel. Price is currently testing the channel support area, so GBPUSD may be due a retrace move. The moving averages suggest that the downside momentum may continue – they are bearish and steady.
Selling opportunities could exist around the dynamic resistance of the moving averages, around the bearish channel resistance area and around the horizontal levels at 1.2065, 1.2135, 1.2190 and 1.2220.
FOREX ANALYSIS: USDCAD – Indecisive
As suggested in our last Forex chart analysis, USDCAD reversed off 1.3570.
Price is choppy and indecisive. The moving averages have been crossing frequently and are moving sideways, so the market indecision could continue.
Trading opportunities may exist around the moving averages and around any of the identified horizontal levels at 1.3500, 1.3530, 1.3570 and 1.3705. If the USDCAD moves above 1.3705, price could attempt a bullish move higher.
FOREX ANALYSIS: USDCHF – Indecisive
USDCHF has failed to swing lower, as suggested in our last analysis.
Price was down-trending but is now looking indecisive. 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 horizontal levels at 0.9215, 0.9230, 0.9290, 0.9345, 0.9375 and 0.9430.
FOREX ANALYSIS: USDJPY – Possible downtrend?
Price has been moving sideways.
USDJPY has formed a large bearish move below key support levels, so price could start down-trending. Price is currently in a retrace move. The moving averages are bearish and steady – confirming the possible downside.
Shorting opportunities may exist around any of the key Fib levels, around the longer-term moving average and around the horizontal levels at 132.70, 133.75, 134.25, 134.70 and 135.80. A bearish move could stall or reverse off the shorter-term moving average and around the recent swing low at 131.05.
METAL ANALYSIS: XAUUSD – Market indecision
As suggested in yesterday’s Forex analysis, price reversed off the 1822 area.
GOLD was showing potential upside but is now looking indecisive again. The moving averages are tightening and are moving sideways, so the market indecision may continue.
Trading opportunities could exist around the moving averages and around any of the horizontal levels at 1767, 1776, 1786, 1797, 1805, 1813 and 1822.
Fundamental Analysis
Key Analysis
Today’s Major Scheduled News
2330 UTC – JPY – Inflation Rate
1330 UTC – USD – Personal Spending, Personal Income, Durable Goods Orders
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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