The Tiger Forex Report – Week of 01/09 – 01/13/2022

DXY fell hard on support with many FX pairs set to rally against the Greenback?

Crude Oil Bears are set to press support. Unemployment is very low, but factory orders are at the lowest levels in years too. Wide range trade conditions may be manifesting.

30yr T-Bond Bulls liked the Unemployment number. The FED is not likely to feel the same. This will most likely reinforce the Hawkishness by the Fed into the next few months.

EURUSD Weekly Outlook:

A challenge of resistance is likely early in the week after Friday’s buy signal. A breach of 1.0736 should not be taken lightly. Trading back above here is a positive indication that the market is going to press new move highs up towards the 1.0866 level. Lookout for a potential head fake. Watch yields. If the interest rate market starts to sell off, then the EURUSD could snap back fast.

Only a break under 1.0481 takes us off of the short-term Bullish outlook. Current factors are set to rattle the FED, and this should keep the interest rate hikes flowing. The 1.0225 level is the first objective on a move that has the potential to reach 1.0074. The lowest Unemployment in fifty years does not fit the data that the FED is looking for. Will they react? I expect more rate hikes, but not at as aggressive as in 2023.

GBPUSD Weekly Outlook:

Friday the GBPUSD touched off a Bullish Engulfing Line buy signal. A challenge of the 1.2335-1.2490 target zone is in the forecast. This is all that is expected until there is a clearer picture of how the FED will react to the Unemployment number. Unless the BOE gets very aggressive it is very likely that the market will turn back if the FED remains steadfast.

1.1841 is the area holding up the market. A failure from here negates the buy signal, and sets up the GBPUSD for a fresh sell off. 1.1425 is the first stop on a slide that has the potential to hit 1.1140 before there is a bounce. A breaking interest rate market would help to reinforce any Bearish action. Overall strength in the USD is weakening, but not enough to really strengthen this FX pair versus the USD.

USDCHF Weekly Outlook:

The USDCHF set a newer move high on Friday before selling off hard. Expect the Bears to press support. An early play for 0.9198 is likely this week. Be careful at these lower levels. A dip below here confirms the market’s intentions to slam support down towards the 0.9015-0.8950 area. Not much more is expected to the downside unless there is a big change in the FED’s hawkish stance. This is unlikely to happen anytime soon.

A breach of 0.9408 reverses gears fast for this market. Trading above here should kickstart fresh buying aimed at the 0.9557-0.9657 upside target zone. The USDCHF has been trying to round out a bottom. Trading back up at these levels would confirm the markets intentions to maintain a neutral to positive short-term outlook.

USDJPY Weekly Outlook:

The USDJPY set a higher move high after bouncing off of new Monthly lows, but the market is looking rather weak. Trading under 134.77 is an indication that this currency cross is ready to press support hard. Downside momentum is expected to build as fresh selling enters the market driving this currency down towards 129.50. It may get dicey in this area. Bulls should use caution moving forward. Wait for a valid signal, and do not try and pick a bottom. 127.75 is the longer-term sell off objective.

Trading above 134.77 this week changes everything. The Bears are trying to maintain control, however a sustained trade above 134.77 negates the Bearish outlook. As the trend neutralizes it will be a volatile ride as the market makes a move towards the 140.14-143.12 upside target zone. This is about all that is expected on a short-term trend reversal.

AUDUSD Weekly Outlook:

Bullish momentum is building. Key off the 0.6893 level for direction. Sustained trading above here keeps the rally train going driving the AUDUSD up towards the 0.7261-0.7358 upside target zone. This currency pair has been very strong on a trend level versus the USD. Wait for a valid sell signal before trying to play the downside. The Bullish trend is very strong.

Trading under 0.6893 puts the rally train on hold as the AUDUSD digests recent market action. It will be a tough trade back towards the 0.6629 level. This is the level supporting the trend. If the market falls under here then it is very likely to spark another wave of selling. 0.6272 is the first stop on a slide that may take out monthly lows.

NZDUSD Weekly Outlook:

There was a strong turn off support on Friday. Use the 0.6372 level for directional bias. Trading above here sets the market up to make a challenge of the 0.6513 resistance level. The USD is looking weak, and this should help to lift the AUDUSD. 0.6640 is the longer-term upside objective. Watch yields this week. If the interest rate market sells off hard, then the Aussie Bulls may fall apart.

Sustained trading under 0.6372 puts this market in a holding pattern down to the 0.6191 downside breakout level. This is the key area holding the AUDUSD up. If the market slips below 0.6191 it is a negative sign that the Bears are back. Downside momentum should build under this area and slam newer move lows towards the 0.6034-0.5993 downside target zone. This is all that should develop from a lower trading market unless there is a major shift in the FED policy.

USDCAD Weekly Outlook:

USDCAD Bears are set to press the 1.3384 downside breakout level. Weakness is growing in the market, and a play for the 1.1357-1.2969 downside target zone is expected. Support is strong down in this lower area, and should stabilize the market. USD weakness manifested before other FX pairs did in this market. It may be a while before this cross rate gets a solid bounce.

From 1.3384 up to 1.3705 it will be a grind of a range trade. Only a sustained trade above 1.3705 confirms the markets intention to press newer move highs towards the upside target zone. Unlike many other currency pairs, the USDCAD is lately not able to get much follow through momentum in any direction. Hence there may be more range trade conditions continuing in this market while others are working on trend moves.