Forex Analysis – December 27, 2022
Our previous Forex analysis can be viewed here…
Technical Analysis
FOREX ANALYSIS: AUDUSD – Market indecision
As suggested in our previous Forex chart analysis, price reversed around 0.6645.
AUDUSD continues to be indecisive and lack trend direction. The moving averages are moving sideways and New Year is approaching, so the market indecision may continue. If price moves below 0.6645, the AUDUSD may become bearish.
Trading opportunities could exist around the moving averages and around any of the horizontal levels at 0.6645, 0.6730, 0.6760, 0.6805, 0.6825 and 0.6845.
FOREX ANALYSIS: EURGBP – Up-trending
Price reversed around the shorter-term average and has been bullish, as suggested in our previous analysis.
EURGBP is clearly up-trending and is currently in a retrace move. The moving averages are bullish and steady, so the uptrend could continue. It is holiday season though, so price could become indecisive.
Opportunities to go long may exist around the dynamic support of the moving averages and around any of the horizontal levels at 0.8790, 0.8765, 0.8715 and 0.8695. A bullish move could stall or reverse around the recent swing high at 0.8825.
FOREX ANALYSIS: EURUSD – Ranging
As suggested in our last Forex analysis, EURUSD reversed off the range support area.
Price continues to be indecisive and lack trend direction. EURUSD has formed a horizontal channel at 1.0580-1.0655 and price is ranging within the channel. The moving averages are tight and crossing frequently and the New Years holidays are approaching, so the market indecision may continue.
Trading opportunities could exist around the support and resistance areas of the horizontal channel and if EURUSD moves out of the channel (break-out trade). A break to the upside may find resistance around 1.0700. A break to the downside may find support around 1.0510 and 1.0445.
FOREX ANALYSIS: GBPUSD – Down-trending
GBPUSD reversed off the bearish channel support area, as suggested in our last analysis.
Price is down-trending within a bearish channel and is currently in a retrace move. GBPUSD is nearing the channel resistance area and the moving averages are bearish and steady, so the downside momentum could start again.
Opportunities to go short may exist around the longer-term moving average, around the bearish channel resistance area and around the horizontal levels at 1.2075, 1.2135, 1.2190 and 1.2220. A bearish move could be rejected or reverse around the shorter-term moving average, around the recent swing low at 1.2010 and around the bearish channel support area.
FOREX ANALYSIS: USDCAD – Indecisive
As suggested in our previous chart analysis, price reversed around 1.3570.
The USDCAD continues to be indecisive and lack trend direction. The moving averages have been crossing frequently and the New Years holidays are approaching, so the market indecision may continue.
Trading opportunities could exist around the moving averages and around any of the identified horizontal levels at 1.3500, 1.3530, 1.3570, 1.3680 and 1.3705.
FOREX ANALYSIS: USDCHF – Indecisive. Potential upside?
Price reversed around the moving averages and around 0.9290, as suggested in our previous analysis.
The USDCHF is currently indecisive. Price could start ranging between 0.9230 and 0.9345. The moving averages have been crossing frequently and are moving sideways, so the indecisive could continue. If price closes above 0.9345, the USDCHF could become bullish and start up-trending.
Trading opportunities may 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?
The USDJPY has been bullish.
Price action has formed a large bearish move below key support levels, signalling that price may start down-trending. USDJPY is back above the moving averages though, so downside momentum may be weakening.
Trading opportunities could exist around the moving averages, around any of the key Fib levels and around the horizontal levels at 131.05, 131.55, 132.45, 134.25, 134.70 and 135.80.
METAL ANALYSIS: XAUUSD – Market indecision
As suggested in our last Forex chart analysis, GOLD has been reversing around 1786 and the moving averages.
Price continues to be choppy and indecisive. The moving averages confirm the market indecision – they have been crossing frequently.
Trading opportunities may exist around the moving averages and around any of the identified horizontal levels at 1767, 1776, , 1786, 1805, 1813 and 1822.
Fundamental Analysis
Key Analysis
Today’s Major Scheduled News
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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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