Forex Analysis – December 29, 2022
Our previous Forex analysis can be viewed here…
Technical Analysis
FOREX ANALYSIS: AUDUSD – Market indecision. Potential upside?
As suggested in our last Forex chart analysis, price has been moving sideways.
AUDUSD is indecisive but recent price action has been bullish. Price has formed a bullish channel and the moving averages are bullish and steady, so the upside momentum may continue.
Opportunities to go long could exist around the dynamic support of the moving averages, around the bullish channel support area and around the horizontal levels at 0.6720, 0.6655 and 0.6645. A bullish move may stall or reverse around the channel resistance area and around the horizontal levels at 0.6760, 0.6770, 0.6795, 0.6805 and 0.6825.
FOREX ANALYSIS: EURGBP – Up-trending
Price has been bullish off 0.8790, as suggested in our last 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.
Long opportunities may exist around the dynamic support of the moving averages and around the horizontal levels at 0.8825, 0.8790, 0.8765, 0.8715 and 0.8695.
FOREX ANALYSIS: EURUSD – Ranging
As suggested in our previous Forex analysis, EURUSD reversed around the range resistance area.
Price is indecisive and is ranging between 1.0580-1.0665. The moving averages are tight and moving sideways and the New Years Holidays are approaching, so the current indecision may continue.
Trading opportunities could exist around the support and resistance areas of the range and if EURUSD moves out of the range (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 1.0495.
FOREX ANALYSIS: GBPUSD – Down-trending but ranging
GBPUSD has started ranging, as suggested in our previous analysis.
Price is down-trending but is currently in a sideways retrace move. GBPUSD is ranging between 1.2005 and 1.2110. The moving averages continue to be bearish, so the downtrend could continue.
Opportunities to go short may exist around the dynamic resistance of the moving averages, if price moves below the range support area and around the horizontal levels at 1.2110, 1.2135, 1.2190 and 1.2220. A bearish move could be rejected or reverse around the potential range support area at 1.2005.
FOREX ANALYSIS: USDCAD – Indecisive
Price has been bullish.
The USDCAD was showing signs of potential downside but is now looking indecisive again. The moving averages confirm the market indecision – they are moving sideways.
Trading opportunities could exist around the moving averages, around the diagonal resistance area and around any of the identified horizontal levels at 1.3495, 1.3530, 1.3570, 1.3635 and 1.3680.
FOREX ANALYSIS: USDCHF – Market indecision
As suggested in yesterday’s chart analysis, price has been moving sideways.
The USDCHF is indecisive and is ranging between 0.9230 and 0.9345. Price is centre range and the moving averages are tight and moving sideways, so the market indecision could continue.
Trading opportunities may exist around the moving averages, around the support and resistance areas of the range and if USDCHF moves out of the range (break-out trade). A break to the upside could find resistance around 0.9375. A break to the downside could find support around 0.9215.
FOREX ANALYSIS: USDJPY – Indecisive. Potential upside?
The USDJPY has been bullish.
Price was indecisive but is currently looking bullish. USDJPY is above the moving averages and the moving averages are bullish and steady, so the uptrend 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 132.45 and 131.55. A bullish move may be rejected or reverse around 134.70, 135.80 and 137.30.
METAL ANALYSIS: XAUUSD – Market indecision. Potential uptrend?
As suggested in yesterday’s analysis, GOLD has been moving sideways.
Price is indecisive but is moving within a bullish channel, suggesting potential upside. The moving averages are crossing frequently and moving sideways though, so the market indecision could continue.
Trading opportunities may exist around the moving averages, around the support and resistance areas of the bullish channel and around any of the horizontal levels at 1767, 1776, 1786, 1805, 1813, 1822 and 1825.
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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