The Tiger Forex Report – Week of 02/13 – 02/17/2022

DXY is a tough read after last weeks indifference. Diverging currency pairs are dulling the Dollar Index luster lately. A slow show of Bullish strength is in the forecast.

Crude Oil is pressing the upper part of the range it has been stuck in. Fundamentals are helping to give the Bulls a leg up on direction. Higher move highs are likely.

The 30yr T-Bond is showing that Yields are set to rise. A slide into the downside targets zone is the call for this week. Bears are ready to pounce on the treasury market.

EURUSD Weekly Outlook:

This market is on edge. The mainstream consensus is falling apart. A sell rally forecast is the call for this week. Key off last weeks close. Trading under 1.0676 keeps this currency pointed South. The 1.0481 downside breakout level is the first stop on a break that has the potential to hit the downside target zone soon. The Fed is most likely going to continue the Hawkish behavior for many months to come. If true, it would help the Bears out.

Trading above 1.0676 puts the EURUSD on hold as it digests the recent slide. Only a breach of the 1.1032 upside breakout level confirms strength, and another leg higher that targets the 1.1300 level. 1.1378 is the upper extreme for an extended leg higher. Fundamentals just do not justify much higher price action. The Ukrainian conflict is too much of a tax on the EU, and the West does not want a peaceful resolution. Watch the EU Employment numbers the next few months. If sanctions are not lifted soon, then the Employment numbers are most likely going to be driving headline business news throughout Europe. And it is doubtful the Swiss will bring back the “Support the Euro” model.

GBPUSD Weekly Outlook:

Friday’s close was a negative sign that the GBPUSD is set to press newer move lows this week. A test of the directional pivot level is on the agenda early this week. Do not try and fight this slide. A failure from 1.1960 should touch off a fresh wave of selling pressure. The downside target zone is the objective for the Bears. This area should hold up. Even if this currency has turned into a longer-term Bear, support should hold for a while in this area.

A breach of 1.2193 is required to reverse gears on this market. Trading above this level should inspire the Bulls to make a run for the 1.2447 upside breakout level. Use caution. Even if higher move highs are made on a monthly basis there is little room to the upside with fundamentals being what they are. 1.2620 is likely to be the upper extreme for any Bullish exuberance.

USDCHF Weekly Outlook:

USDCHF Bulls are having a tough time with getting any upside momentum going. It appears that this market is trying to round a bottom, and fundamentals are bullish for the week ahead. An early run for higher move highs is likely. 0.9408 is the key. A breach of the upside breakout level confirms strength in the short-term. Resistance is strong, and the trend is still a Bear. The upside target zone would be a great area to take profits if upside momentum builds. Even if this currency is reversing the trend the Bulls will have a very tough trade at higher levels.

Last week was a sideways trade. If the Bulls do not take the reins for direction, it is likely to be a tough range trade down to the 0.9059 downside breakout level. Only a failure from here confirms the markets intention to hammer support. 0.8950 is the first stop on a slide that has the potential to hit 0.8915 before there is a bounce. With the Fed in a firm Hawkish stance, it is not likely that the USDCHF will hit support too hard over the next few weeks.

USDJPY Weekly Outlook:

USDJPY Bulls are taking advantage of recent strength. Volatility is expected to get crazy as we get closer to the change in BOJ leadership. Until then though the Bulls are ready for a challenge of the upside breakout level. If the market gets a print above here it may be all that is needed to spark fresh buying. A close above 132.90 confirms strength. Upside momentum should drive the market up towards the 139.50 level.

If the trend is going to be a Bear, then a failure from 127.21 is required. A break here would confirm weakness and the market’s intention to press support. 126.75 is the first stop on a slide that targets the 1.2544 level. Use caution with a lower trading USDJPY. Downside action is likely to be limited over the next six months. And that is even if the BOJ gets Hawkish. Let us be real… How Hawkish will they be?

AUDUSD Weekly Outlook:

AUDUSD Bulls are part of the divergence impacting the Dollar Index. Last week may have just been a reaction to the over zealous selling the week before. The trend is still a Bull. Last Monday’s low may be just another long-term higher mover low. Key off Friday’s close at the 0.6914 level. Trading under here keeps the Bears nose to the ground. Lower move lows are likely. A failure from the downside breakout level is likely to touch off fresh selling pressure as weak longs get kicked out of the market. If yields are climbing alongside USD strength, then the downside target zone is a very viable objective over the next few weeks.

Trading above 0.6914 puts the market on hold as it continues to digest the recent sell off. Sorry to say that it is likely to be a very tough trade for the Bulls in this market. AUDUSD Bulls will have a challenge all the way up to the upside breakout level. Only a breach of this area confirms the trend is back. 0.7066 is the extended upside target.

NZDUSD Weekly Outlook:

What a sleeper of a trade the NZDUSD has settled into. Fundamentals are a disaster for this market, and that means a tough range trade will probably develop. Until there is a confirmation of USD strength this currency is likely to remain in a very wide range trade. Only a rally above the upside breakout level would confirm the markets intentions to shore up this FX pair. 0.6611 is the upside objective should there be a breakout by the Bulls. However, for this to occur, the USD would most likely need to be under extreme weakness.

Even though the call is for sideways action, the Bears may still have some fun. A failure from last Monday’s low is likely to set up a test of the downside breakout level. If the market gets a print under 0.6191 the Bears should be happy. Trading below the 0.6191 level should keep a Bear trend intact. In the short-term the Bears have a good chance at reaching the 0.6024 level. The lower extreme at 0.5903 will be tough to reach. Treasury yields do justify another big slide in the NZDUSD, and that outlook is not likely to change for a while.

USDCAD Weekly Outlook:

The USDCAD remains under pressure to start the week off. Friday’s trade was a negative indication that the Bears are going to try and hit support again. If the Bears are in control the market is likely to test the downside breakout level. Do not fight a slide below here. 1.3195 is the first objective on a slide that could see the 1.3075 level in the not-too-distant future. This is one of the FX pairs that is dragging on DXY.

A reversal of gears will have the USDCAD Bulls looking to press resistance into the upside target zone. Even with a Hawkish Fed and neutral DXY, this market is going to have a tough climb higher. A rally above 1.3532 is needed to spark fresh upside momentum. The 1.3705 upside breakout level is the longer-term upside objective. Even if this does occur it should be short lived. Overall, the USDCAD is turning into a wide range trade. Wait for a valid breakout signal.