Forex Market Outlook: 9 August 2022

Updated August 9, 2022

Dollar held steady around the 106 level after US consumer inflation estimates for the upcoming year dropped to 6.2% in July 2022, the lowest figure in five months. Notable publications ahead include the US CPI data which could signal easing price pressures. The annual rate of inflation is expected to fall to 8.7% from 9.1% while headline inflation should record a 0.2% increase month on month, easing pressure on the Fed for more aggressive tightening going forward. .

Euro traded sideways weighed down by recession concerns and disappointing PMI data as private sector activity in the Eurozone shrank for the first time since February 2021 while retail sales declined sharply. With the Eurozone heavily reliant on energy imports, higher energy prices and supply constraints are also exacerbating the supply-driven inflation which increases its stagflation risks. To combat record high inflation, ECB hiked interest rates by 50 basis points and signalled more hikes ahead which could provide a short-term boost for the currency.

Elsewhere, oil prices hovered near $90 per barrel, near its six-month low of $87 last week as slowdown fears continue to limit the upside in prices. Lower demand from China, the largest crude oil importer in the world, with data showing the biggest player purchasing 9.5% less oil in July compared to July last year alongside rising US crude oil inventories saw prices retreat from its recent highs with more downside risks ahead.

Trade ideas that played out last week: 2 & 4 August 2022

XAUUSD H1: Bullish outlook seen, further upside above 1766.80

On the H1 time frame, a pullback to the support zone at 1766.80, in line with the Fibonacci confluence levels presents an opportunity to play the bounce to the resistance target at 1793.00. This resistance target coincides with the daily resistance level. Prices are also holding above the Ichimoku cloud indicator, supporting the bullish bias.

Before:

Coloured candles represent our projection

Source: TradingView. https://www.tradingview.com/chart/XAUUSD/ZIUzEf6M-XAUUSD-H1-Bullish-outlook-seen-further-upside-above-1766-80/

After:

USDJPY H1: Bullish outlook seen, further upside above 132.60

On the H1 time frame, prices are holding above an ascending channel and a throwback to the support zone at 132.60, in line with the 50% Fibonacci retracement and ascending channel’s support presents an opportunity to play the bounce to the next resistance target at 135.50. A break above the upside confirmation at 134.50 would provide the bullish acceleration to the resistance target at 135.50. Prices are holding above the 50 EMA as well, supporting the bullish bias.

Before:

Coloured candles represent our projection

Source: TradingView. https://www.tradingview.com/chart/USDJPY/bkGWkB26-USDJPY-H1-Bullish-outlook-seen-further-upside-above-132-60/

After:

Today’s trade ideas: 9 August 2022

XAUUSD H1: Bullish outlook seen, further upside above 1779.00

On the H1 time frame, prices are holding above an ascending channel and approaching the support zone at 1779.00, in line with the Fibonacci confluences and ascending channel’s support. This presents an opportunity to play the bounce to the next resistance target at 1802.80. Prices are holding above the 50 EMA as well, supporting the bullish bias.

Coloured candles represent our projection

Source: TradingView. https://www.tradingview.com/chart/XAUUSD/w3XNWZW7-XAUUSD-H1-Bullish-outlook-seen-further-upside-above-1779-00/

USDJPY H1: Bullish outlook seen, further upside above 134.500

On the H1 time frame, prices are holding above an ascending channel and approaching the support zone at 134.500, in line with the 38.2% Fibonacci retracement and ascending channel’s support. This presents an opportunity to play the bounce to the next resistance target at 136.20. Prices are holding above the 50 EMA as well, supporting the bullish bias. Failure to hold above the 134.50 support zone could see prices push lower to the next support zone at 133.50.

Coloured candles represent our projection

Source: TradingView. https://www.tradingview.com/chart/USDJPY/E6jQ5O57-USDJPY-H1-Bullish-outlook-seen-further-upside-above-134-500/

CADJPY H1: Bullish outlook seen, further upside above 104.30

On the H1 time frame, prices are holding above an ascending trend line and approaching the support zone at 104.30, in line with the 100% Fibonacci extension which presents an opportunity to play the bounce to the next resistance target at 105.20. Prices are holding above the 50 EMA as well, supporting the bullish bias. Failure to hold above the 104.30 support zone could see prices push lower to the next support zone at 103.90.

Coloured candles represent our projection

Source: TradingView. https://www.tradingview.com/chart/CADJPY/YSIACQjr-CADJPY-H1-Bullish-outlook-seen-further-upside-above-104-30/

Past performance is no indication of future performance. This report is provided by Zeta Labs, a specialized Forex Fintech Consultant and Technical Advisor who provides white-label solutions for FX Market Analysis, trading insights and education webinars. The team has a wealth of industry experience, with our analyst being part of the team recognised by The Technical Analyst Awards as Finalist for the Best FX Research for 4 consecutive years (2019, 2020, 2021, 2022). 

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