The Tiger Forex Report – Week of 1/16 – 1/20/2023

DXY weakness prevails, and the momentum to the downside continues.

Crude Oil Bulls are licking their chops...higher gas prices are coming back! Inflation continues!

30yr T-Bond looks strong, but the economic numbers are too mixed for the Bears.

EURUSD Weekly Outlook:

The Greenback fell hard to EURUSD last week, but the Bulls may be set for a pause. A challenge of the 1.0886 buy signal target level is expected. This area is likely to slow down upside momentum, and 1.0969 should cap any extended show of strength. Be careful about a spike high. Yields are expected to start to rise again, and this should slow this FX pairs upside potential.

Below the 1.0886 level this market is set for a sideways digestive trade back down to 1.0484. If the USD remains weak it will be a tough trade in this area. Media expectations are lower yields, and a softer Fed. Since the unemployment level remains low it is unlikely that the Fed will change its stance. This bodes well for EURUSD Bears. A failure from 1.0484 would confirm the overall long-term trend is still intact. Weakness at these levels is not to be taken lightly. A breaking market has the potential to hit 1.0225 quickly. 1.0074 is the extreme sell off objective for the downside target zone.

GBPUSD Weekly Outlook:

The GBPUSD Bulls helped to pressure the Greenback last week, but the market did not make significant new highs. While the USD is under the gun it is likely that this market will make a play for the 1.2352-1.2490 upside target zone. Expect the 1.2443 level to give the Bulls some trouble. Only a close above here would confirm any longer-term strength.

Down to 1.1843 it will be a grind of a trade. Until yields get a boost it will be tough for the Bears to gain control of this market. Be mindful of any strong sell off in the treasury market. This is just what is needed to give GBPUSD bears an edge. 1.1425 is the downside target level.

USDCHF Weekly Outlook:

Last week was very indecisive. Newer lows confirm the trend is intact, and fresh USD strength may not impact this market. A correction to the upside in the USDCHF will occur, but divergence is not out of the question. Below 0.9399 the Swissie is set to press newer move lows. Do not try and catch a falling knife. A failure from 0.9165 targets the 0.9015-0.8950 area.

Only a rally above 0.9399 confirms the markets intention to press a correction. Upside breakout momentum should accelerate up towards the 0.9556-0.9656 upside target zone. USDCHF bulls are not expected to get above this area. Even if the USD is raging with strength against other FX pairs this market may not react in tandem.

USDJPY Weekly Outlook:

2023 will be an interesting year for the USDJPY. Like the USDCHF, this market is set to have its own trend dynamics. There is a new prime minister, and a new BOJ chairman coming on line. The decades long financial plan may be changing. Although the level of Hawkishness is not likely to be as aggressive as other central banks, it is new trade deals that are expected to strengthen the Yen as a whole. Trading below 130.00 keeps the market in a Bearish way. The 124.74-122.50 downside target zone is the objective.

Only a sustained trade above 130.00 puts the USDJPY on pause for a corrective rally up into the 140.15-143.26 upside target zone. This is all that is likely out of the Bulls even if the USD is smashing other currency pairs. There are major shifts in how Japan deals with countries other than the U.S., and it is very negative for the USDJPY relationship.

AUDUSD Weekly Outlook:

AUDUSD Bulls got their breakout, and are pressing upside momentum fiercely. The bullish posture is likely to remain, and this targets the 0.7261-0.7358 upside target zone. Unless there is a big reversal with the Dollar Index, this market is likely to hold a neutral to higher trade. Use caution selling into this rally.

Only a failure from 0.6636 takes us off the bullish campaign as the Bears take over the trend again. Trading under 0.6636 leans the AUDUSD towards the 0.6277 target level. If DXY sparks a rally, and if yields rise firmly, then the Bears may regain control of the overall trend.

NZDUSD Weekly Outlook:

NZDUSD traders are having a tough time with direction. USD weakness is not boosting this market like other FX pairs. This is because of seriously weak fundamentals. If yields and the USD remain under pressure this market will be in neutral up to the 0.6511 upside breakout level. Only a close above 0.6511 would confirm any extended longer-term strength. Not likely though.

Below 0.6511 down to the 0.6193 downside breakout level the NZDUSD will be in limbo. A failure here however, should spark fresh selling. Bearish momentum should build under here driving the market down into the 0.6035-0.5992 downside target zone. The New Zealand economy is collapsing, and their currency should be one of the big dogs of 2023.

USDCAD Weekly Outlook:

The USDCAD is falling out of its range trade and pressing support. Key off the 1.3384 downside breakout level for direction. Sustained trading under here keeps the Bears in control with an eye ball on the 1.3157-1.2988 downside target zone. If yields are under pressure this currency cross is likely to be in the gutter.

Only a sustained trade above 1.3384 keeps the Bears on hold as the USDCAD goes back into a wide range trade. It will be an ugly trade up to 1.3688. A breach of this area is needed to touch off fresh buying, and change the negative outlook. A strong sell off in the interest rate markets is needed in order to confirm any turn to bullishness in this currency as well.