The Tiger Forex Report – Week of 3/20 – 3/24/2023

The DXY will be one hard index to track. The heightened global reaction to the Banking scandals is all you need to know. There is a big problem. Get ready for big moves.

Crude Oil slumped hard because yields fell back. Energy spreads are on the move, but they are not Bearish for Crude. Watch the Interest Rates for any harsh sell off. That could reverse this market in a heartbeat. At least there may be some relief at the pump.

30yr T-Bond Bulls lifted the market through strong resistance. Be careful on the Long side. Central banks are going to make a mess of things. Will the Fed still hit yields? Or will they pause to help cut the losses from the banking fiasco?

EURUSD Weekly Outlook:

We have so many variables hitting the markets with the banking fiasco. Expect irrational swings. The Bulls are likely to make a play for the upside correction zone. But do not get married to any direction. If the EURUSD climbs back to this area it is very likely that the currency will stall here. Only a close above 1.0839 confirms enough strength to press new multi month highs. Fed actions will be under a microscope. If the Hawkishness looks unwavering by the Fed, then keep your Stops tight for any Bullish position.

Down to the critical support level the market will be in a sloppy range trade. A dip below 1.0524 would signal that the Bears are back in control. The 1.0292 downside target level is the objective for new trend move lows. Before the SVB domino effect it was expected that the EURUSD would be trading down near the downside target level. With central banks all chatting the market may go directionless for a few sessions. Use yields as your gauge for direction. If yields are going higher, then this FX pair should go lower.

GBPUSD Weekly Outlook:

GBPUSD Bulls are fighting to press through resistance to start the new trading week. Yields have been hammered the last couple of weeks, and this has helped to boost the Bulls for this market. 1.2306 will be the big test in the short-term for strength. If the market can post a close above this level, then the Bulls should flirt with the critical long-term resistance level. Flirting is about all that this currency will be able to do. With the Fed being aggressively Hawkish it is very likely that the Bulls will run into a solid ceiling up in this area.

If upside momentum runs out of steam, then a big digestive phase may be the call. Fundamentals are enough to pull this market through the mud. However, we will not know for a few days how much the UK is impacted yet. As the Bears take over it will be an ugly trade down to the downside breakout level. Only a failure here confirms new move lows, and the resolve to drive the GBPUSD down towards the downside target zone. Trading back down at these lower levels would also indicate that the long-term trend for this market is very Bearish.

USDCHF Weekly Outlook:

Well a big bounce helps to keep the long-term critical support level a solid support pivot. The range trade is heating up with larger swings. Although with the Swiss central bank joining the party now it may flatline the USDCHF. Expect this market to be set adrift for a week or so. Major focus is on the USD, and the CHF will be a flight to quality currency. Until there is any central bank action the Bulls are on a mission to challenge the upside breakout level. If the Bulls can get above this area, then the upside target zone becomes a viable objective.

Only a failure from the long-term critical support level would confirm that there is enough weakness to press new move monthly lows, 0.8975 is the first stop on a major trend move lower that could hit 0.8850 before there is a bounce. The long-term outlook for the CHF is Bullish. If the Fed starts to falter on recent news, then the USDCHF Bears will capitalize with no mercy. If there is a currency that has the potential for an explosive move it is this one. Stay nimble.

USDJPY Weekly Outlook:

The USDJPY has fallen on hard support. Under normal conditions a bounce would be expected. However, the banking scandals are showing their depth more each day. This should keep this currency under pressure for a few more sessions at least. Key off the downside levels. Trading in this area keeps Bearish momentum in full gear. A test of the downside breakout level is on the menu for this week. If the market dips under here, then new move lows target the 125.40 level.

Up to 137.91 the USDJPY will be in limbo as it digests recent action. As of now the market is expected to be contained, and no extended Bullish show of strength is likely. Only a rally above the upside breakout level confirms the markets intentions to make another power move through resistance. The upside target level is the objective for the Bulls if there is a big turn in direction. If this is to occur it would likely be because of a strong move by the Fed. Due to the banking debacle, it is unlikely that the Fed will act in this manner though.

AUDUSD Weekly Outlook:

The Aussie is drifting in a range trade. In between the breakout levels it will be a sloppy range trade. Wait for a valid Buy or Sell signal. A breach of 0.6783 is likely to touch off stops and fuel a rally. The upside target zone is about all that the Bulls should pull out of a fresh leg higher. If the banks are disrupting the world markets, then the AUDUSD will not be immune. Keep your money management rules in check to the upside.

Below the downside breakout level, the Bears should have no problem reaching the downside target zone. Trading in this area confirms the Bear trend is intact, and a sell rally forecast will remain. Banking system aside, the AUDUSD has troubles of its own, and it favors the Bears. If there is a major trend move to the downside it may hit the 0.6125 level before there is any slow down in momentum.

NZDUSD Weekly Outlook:

The NZDUSD is poised to press resistance early this week. A sustained trade above the upside breakout level confirms the Bullish resolve to press new move highs up towards the upside correction zone. With global pressures impacting global yields it will be interesting to see how much this currency can hold onto gains. A close above the 0.6437 level is needed to confirm any long-term strength to support a neutral to higher trend.

Below the upside breakout level it will be a grind of a trade back down to the downside breakout level. If the market falls below here then the downside target level should be an easy target to reach. The 0.5976 area is expected to hold in the short-term, but trading back at these levels would confirm the markets intentions to sustain a Bear trend into the Second Quarter. Yes, we are already near the end of the first quarter of the year.

USDCAD Weekly Outlook:

Global news is hitting all the markets, but this one may be the sleeper. The Bulls have rejected the new move highs, and are now in a consolidation pattern. It is interesting how the other FX pairs are moving, and this one is winding its coil. However, this market is not likely to pop anytime soon. USDCAD traders will have a tough time while the market seeks direction between the upside breakout level and the last critical swing low. A failure from 1.3651 sets the Bears up for an extended sell off into the downside target zone. Remember that this currency has been in a range trade for months. A few months from now it would not be a surprise to look back and see that the range trade is still in place.

USDCAD Bulls are going to have trouble lifting this market. A sustained trade above 1.3862 is required to confirm fresh buying, and a new leg higher. 1.3988 is the first target on a move that has the potential to press new monthly highs up towards the 1.4110 level. This scenario is only likely if the Fed really gets aggressive with rates, and the other central banks back off. With the looming banking crisis, and yes, it is a crisis. U.S. banks have been running with zero reserves, and double leveraged products. And to top it off… The geniuses at the top bought Bonds for a year when they knew the Fed was on an aggressive interest rate rising campaign. The level of stupidity is beyond words. And to top it off one of the SVB guys was one of the top Lehman execs when they collapsed. If guys like Milliken and Boesky went to jail, and can no longer trade markets (They made people money, and did not lose money. By the way. They were just not compliant.) Why can bankers steal and ruin banks? Get a golden parachute? And then get hired to do it all over again? Should not all bankers be jailed and banned from the financial system so there are no Repeats? Just a though for your next coffee clutch. See you next week.