The Tiger Forex Report – Week of 6/19 – 6/23/2023

DXY took a hit from the Fed’s pause on rate hikes. More weakness may be on the horizon.

Crude Oil continues to drift aimlessly, but gas prices are rallying. Bullish momentum is expected to build.

30yr T-Bond remain in a holding pattern despite the Fed’s pause on rate hikes.

EURUSD Weekly Outlook:

The Bulls took advantage of the Fed’s pause, and this may keep the market poised for higher. Key off Friday’s high. A breach of this level is a positive indication that the EURUSD is on a mission for new monthly highs. 1.1220 is the first stop on a rally that has the potential to hit 1.1300 before there is a turn. USD weakness is the goal of the Fed now. Remember they want a recession.

Sustained trading below the upside breakout level will have the market flirting with a pull back. The downside correction zone is the objective, and not much more is likely. With the Fed on hold for rate hikes, and potential ECB hikes ahead, the EURUSD is likely to maintain a neutral to higher trend. If the ECB follows the Feds lead, then the downside forecast will change. In this case the Bears will have a very good opportunity to retake control of the trend, and produce a fresh leg lower.

GBPUSD Weekly Outlook:

GBPUSD Bulls are on a mission to press newer highs up into the 1.3040 area. The BOE is likely to hike again, and this may help to add more buying pressure in the short run. High inflation and a looming mortgage crisis have the BOE in a bit of a sticky wicket situation. As U.S. Yields stay flat, the Bulls in this market will remain in a buy dip posture. Just be mindful of what the BOE is doing over the next couple of weeks. Any change in direction would put the breaks on the Bullish forecast.

Sustained trading below the upside breakout level sets the Bears up for a short-term slide back towards the downside correction zone. This is all that is expected from a sell off under the current fundamental situation. Only a reversal by the BOE’s outlook would change this. If they start to pause their rate hikes, then an extended leg lower targets the 1.2200 – 1.2145 support band.

USDCHF Weekly Outlook:

USDCHF Bears are salivating over the Feds change in direction. Expect more action as fresh selling is on the agenda for this market. A test of the downside breakout level is very likely. Be careful in this area. Overall, the long-term trend is a Bear for this market. 0.8680 is the first stop on a slide that has the potential to reach 0.8600 before there is a bounce.

Between the breakout levels the USDCHF is set for range trade conditions. Only a rally above the upside breakout level confirms strength for a challenge of the upside target level. This is all that the market is expected to achieve from a rally. The fundamentals are just not lining up to support a Bullish trend for very long. It would take a change of attitude by the Fed to alter this outlook, and that is not likely for at least a few weeks.

USDJPY Weekly Outlook:

USDJPY Bulls did not get the memo that the Fed is off the rate hike path. The trend is very strong, and it is expected to remain in a buy break posture. With the current momentum in the market, it is likely that the Bulls will press new move highs up into the 142.65 – 142.80 resistance band. This is one of the FX pairs that the USD seems to remain very firm against. This outlook is likely to remain in place unless there is a change in the BOJ’s cautious stance.

Above the critical monthly directional pivot level the market remains a strong Bull. Only a failure from here confirms the markets intentions to press support back into the downside correction zone. Overall, the trend is expected to remain a Bull unless the BOJ begins to develop a hawkish stance. In the event that the BOJ reverses gears the Bears will have a chance to press a fresh downside trend that has the potential to fall back towards the 132.00 area.

AUDUSD Weekly Outlook:

AUDUSD Bulls took advantage of the Feds new position on rates. Use caution selling into this rally. The market remains in Bullish posture set for a challenge of the 0.6899 upside breakout level. Trading above here is expected to build extending the upside objective to 0.6990 before there is a pause. Fundamentals are not good for this market, but the Fed reaction is overtaking those variables. Bulls have this going for them, and any break is viewed as a short-term buying opportunity.

Sustained trading below the upside breakout level sets the AUDUSD up for a correction. The downside correction zone is the objective for any Bearish turn of events. With the new Fed stance, it is unlikely that the market will get below this area. Only a close below 0.6627 confirms the intentions of the Bears to continue pressing a new trend lower.

NZDUSD Weekly Outlook:

NZDUSD Bulls got a boost last week from the Fed rate hiking pause. The upside correction zone is likely to put a cap on the current rally. The fundamentals and technical are not looking very good for this currency pair. Only a sustained trade above the .06231 level confirms the markets resolve to press new move highs up towards the upside breakout level. This is the key area to cross if the market is truly turning the long-term trend around.

A slip below the 0.6184 level is a positive indication that the market is running out of gas. The trend is an overall Bear. Down to the downside breakout level the market is set for a tough trade. If the NZDUSD gets under this area it would confirm that the overall trend is back in full swing. 0.5885 is the extended downside target.

USDCAD Weekly Outlook:

The Bears love the Fed’s new stance on interest rates. This has helped the USDCAD traders get a downside breakout that confirms weakness in this FX pair for a while. An early test of the downside target zone is expected. This is the area supporting the market. All trading under here confirms the intentions of the Bears to press newer move low downs towards the 1.2975 level.

Only a rally above the long-term directional pivot level reverses the negative outlook as the market returns to the wide range trade area. This market has been in limbo for months, and trading back up in this area sets the Bulls up for a tough trade back up towards the 1.3600 level. With the Fed now on a pausing stance for interest rates it is unlikely that the Bulls will have the strength to maintain any sustained leg higher. Make sure to work only very strong Buy signals for the next few weeks.