The Tiger Forex Report – Week of 12/18 – 12/22/2023

DXY Bears are very Grinchy this holiday season. Key off the 101.892 level for the market’s directional bias early in the week. Remember we are winding down the year. Expect thin volume trading. Have a safe and Merry Christmas.

Crude Oil remains on edge as the Bears continue to produce lower move lows. Low gas prices for the holidays would be a nice stocking stuffer gift to end the year.

30yr T-Bond Bulls are on a mission for higher levels. Lower Yields seem to be a holiday gift from the market this year. A follow through rally into the upside target zone is likely.

EURUSD Weekly Outlook:

The Bulls stopped dead in their tracks last week in the EURUSD and failed to make a higher move high. Above the daily directional pivot level, the market will be in limbo as it wrestles for newer move highs. A rally above the “upside target level 1” is a good indication that the rally could work its way back up to the upside target zone.

Below 1.0834 the Bears will try and press the downside breakout level. Be careful in this area. If the USD is back on the rally track this FX pair could be in for a world of hurt. The FED may be starting to pause, but neither the US or EU economies are doing well. There is a tough winter ahead predicted for the fundamentals for both currencies. A close below the 1.0723 level is needed to confirm the short-term trend is running out of momentum. Then a reevaluation of the conditions influencing the EURUSD will be needed.

GBPUSD Weekly Outlook:

Higher move highs and lows keep this rally intact. GBPUSD Bulls are pulling off the new highs, and are ready for another challenge of resistance. Trading above the daily directional pivot level should set the Bulls up for a breach of the upside breakout level. It would not be a good idea to fight the bulls on this one. Fresh buying could lift this market all the way up to the upside target level. Keep an eye out for more USD weakness. That could give this currency an extra lift.

Only a sustained trade under the 1.2594 level takes us off the rally bandwagon. The critical support band is a viable Bearish correction objective. Both the FED and the BOE are likely to be slow to act in the immediate future. With this in mind, it is likely that the GBPUSD could be in for a wide range trade with a slight Bullish bias. However, if Yields start to go up again this currency pair could be pressing the downside breakout level before you know it.

USDCHF Weekly Outlook:

Is this market starting to shore itself up? So far there is no indication for a solid bounce yet. Use the directional pivot level for the market’s directional bias. An early test of this level is expected early in the week. If the market makes a newer move low it is likely that the Bears will try and drive this currency all the way down to the extended downside target level. With the holiday market around the corner, it would be a good idea to remember that by Thursday things will get very tough for a week and a half. Thin volume and nothing but computers pushing the order book is likely. USDCHF Bears should have rational expectations for the week ahead.

Trading above 0.8666 puts the trend on hold for a short pause. It is doubtful that the Bulls will be able to press any real leg higher while Yields are in retreat. Should the USD regain strength the USDCHF could get a decent leg higher towards the upside correction zone. A significant bounce is long overdue, and the holidays may be just the time for it to occur. 0.9149 is the extended upside target.

USDJPY Weekly Outlook:

All the talk is about the USDJPY in the currencies lately. The trend is in the Bears hands, and a test of the long-term sell off objective is likely. Be careful buying into this slide. Momentum has the potential to drive this FX pair into the critical support band before there is a bounce. BOJ influence is a looming factor now. It will sure be an interesting 2024. 132.75 is the extended downside target.

Sustained trading above 140.77 puts the breaks on recent downside action and should help the USDJPY get a rally back to the 145.09 level. This is a key area for the currency to get back above. If Yields start to lift higher again then the market may have the ability to bring the Bulls back. 150.0 is the long-term upside Bullish objective.

AUDUSD Weekly Outlook:

Short-term Bulls are keeping the trend intact. A challenge of the extended upside target is the call for this week. That is all that should occur as we head into holiday markets. Over all the fundamentals are not good for this market, and a pull back is very likely. If the USD takes another big hit this week, then the upside target is extended to the 0.6858 level.

If the USD catches a bid and Yields get a lift, then the AUDUSD could pull back to the critical correction support band. This area is keeping the trend intact. Use caution back at these levels. Fundamentals are very poor for the market, and it will be hard for any long-term Bull as we head into 2024. If the market slips below 0.6440 it is very likely that this currency will be in a tough range trade all the way to the downside breakout level.

NZDUSD Weekly Outlook:

NZDUSD Bulls are poised for a follow through move up to the critical trend target level. This should put a cap on the rally for the short-term. Fundamentals are a drag for this currency, and the pricing is getting stretched. Only a close above 0.6277 confirms the markets intentions to make a play for the 0.6380 level.

Back to the downside breakout level the market will be in a choppy trade. A failure from 0.6084 is required to spark fresh selling pressure that should send the NZDUSD back into the downside correction zone. Should the market pull back to this area it will be very important for the longer-term trend direction. As we head into 2024 there is a strong probability that this FX pair will be ripe for a wide range trade for a few months. There is a looming tug-o-war brewing that is likely to make swing trading very tough over the next couple of quarters. A close below the 0.5952 level would help set the stage for a very neutral outlook for this market.

USDCAD Weekly Outlook:

The Bears keep hammering this market, and a follow through slide towards the downside target zone is the call. This should stop the slide for the short-term as we head into holiday markets. It is unlikely that the USDCAD will maintain the aggressive Bearish posture. 1.3150 is the extended sell off target.

If the USDCAD can sustain a trade above the directional pivot level it will be a grind back to the upside correction level. With Yields and the USD under pressure it will be very tough for the Bulls to get above the 1.3692 level. Should the market get a close above 1.3692 we will reevaluate the trend. Trading back at these levels would bring back long-term Bulls, and may set the stage for another multi-month rally that targets the 1.4025 level.