The Tiger Forex Report – Week of 4/17 – 4/21/2023

DXY set a Bullish Engulfing Line Buy Signal on Friday. Many FX crosses planted complimentary signals.

Crude Oil Bulls are in heaven. OPEC has a floor for Crude in place. Guess that Biden should not have blown off the Saudi Prince’s invitation for two years. Add the Green New Deal to this, and $100 Oil is right around the corner. Then $150. Can you say More Inflation by design???

30yr T-Bonds are falling back on Support. Yields are going up. Inflation is not stopping, and the Fed is unlikely to either. And yes…Inflation will continue much, much, much longer.

EURUSD Weekly Outlook:

The Bears have had a tough time with the EURUSD as of late. Friday generated yet another sell signal. This is a counter trend signal that has strong momentum against it. However, with the DXY Buy signal and higher yields, it is likely that the market will trade lower. Dark Cloud Sell signals are usually very strong, and complimentary signals are lining up in tandem. A follow through break is set to make a play for the downside target zone. If USD strength is returning, then this FX pair should spark a decent correction lower. If the market slips below the 1.0730 level, then the longer-term outlook will become neutral to bearish.

Only a violation of Friday’s high negates the Dark Cloud Cover sell signal. Trading above here is likely to build targeting the 1.1100 and 1.1160 levels. For this situation to manifest it would most likely require another pull back in Yields. This will be hard to do with the May 2nd Fed meeting ahead of us. CPI and PPI are not as nice as the media touted last week. A close above 1.1160 is needed to confirm any long-term Bullish trend.

GBPUSD Weekly Outlook:

A Bearish Engulfing Line Sell signal was generated on Friday. This lines up with the Buy signal in the DXY. Put these two together, and it spells “Lower Trading Market.” Key off the upper range trade resistance level. Below here the Bears should be chomping at the bit to hammer support. The downside correction zone is a very viable objective. The indicators and fundamentals are pointing to this type of move. A sideways trade is likely to develop in this area, so be careful holding Shorts if the market falls back to these levels. If the GBPUSD falls under 1.2086 then it would be unwise to try and fade a falling market. Downside momentum is very likely to build and set the market up to make a play for the lower range trade support level.

The trend seems to be turning for the short-term. Only a rally above last Friday’s high negates the Bearish outlook. New move highs target the 1.2625 and 1.2702 levels. Trading at these levels is not likely unless the USD unwinds again. Use the DXY as an indicator for any strong Bullish surge. If the Dollar Index reversed to make new move lows, then the GBPUSD Bulls should spark another strong rally.

USDCHF Weekly Outlook:

Divergence is the name of the game when viewing the Swissie. Short-term USD strength may not be seen in this currency. The trend is bearish, and a test of the downside breakout level is the call. Use caution buying into ta lower trading market. A failure from 0.8859 is a negative indication that the USDCHF is not through making newer move lows. 0.8775 is the extended sell off target. Last week the market hit new weekly and monthly lows hard, and a sideways to lower trade is the outlook.

If the market can sustain a trade above 0.8859, then it will be a struggle to recapture lost ground. The USDCHF is ripe for a turn, but do not expect any strong surges. A correction back into the upside target zone is all that is expected out of a rally. Global economic splits are causing a demand for the CHF, and decrease in USD demand. Unless this changes it is doubtful the Bulls can sustain any long-term correction higher. Only a close above 0.9218 would confirm a change in the outlook to Neutral. If this does occur, then an extended wave higher targeting the upside breakout level may occur.

USDJPY Weekly Outlook:

The short-term bounce in the USD is helping to drive the USDJPY into the upside correction zone. Trading in this area has the market butting up against strong downside resistance. A sustained trade above 133.75 is not to be taken lightly. If the Bulls hold this area, it is likely that fresh buying will enter the market and lift the trend up towards the upside breakout level. With the Fed meeting on the horizon and Crude Oil in rally mode, it is hard to fight the Bulls in this market.

If the USDJPY holds below the 133.75 level, then it will be back to falling on support. Be careful if the market starts to look bearish. It is unlikely that the market will start a fresh trend lower. What is likely, is that the currency will settle into a sideways range trade. It would take a failure from the downside breakout level to confirm any long-term weakness in this currency pair.

AUDUSD Weekly Outlook:

Many signals gave the USD a lift on Friday, and the AUDUSD was no exception. There was a Bearish Engulfing Line Sell signal that was touched off. Normally this would be a bearish indication that the currency would be set for a good sell off. However, this signal has occurred within just a few sessions of the last swing low. This means there was not enough of a trend to make this counter trend signal to be valid. It just sets the market up for a sideways to lower trade. A failure from the downside breakout level is needed to have any longer-term bearish scenario unfold.

If the market can sustain a trade above the 0.6783 level, then a rally up into the upside target zone is on the agenda. This is all that should occur out of a show of fresh strength in the AUDUSD. With short-term USD strength creeping into the global FX market, it is not likely that any strong Bull trend will develop any time soon. It would take a change in the Fed’s policy to set the market up for any longer-term bull trend.

NZDUSD Weekly Outlook:

This market is in a big range trade. Friday the market set a Bearish Engulfing Line Sell signal, but there was not enough of a trend to validate the Bearish sign. It will be hard for a real trend move to develop. A failure from the 0.6179 level is needed to confirm weakness. Trading under here would be a negative sign that the NZDUSD bears intend to make a test of the downside breakout level. If a bounce does not occur here, then look out below. 0.5795 is the long-term extended downside target.

A rally above 0.6280 changes the sideways outlook, and should spark fresh buying. If new buying enters the market then the Bulls should return to the upside target zone. Not much more is likely out of an upside breakout. The fundamentals and technical indicators should hold the NZDUSD from gaining any big move against the USD. Unless the USD falls off sharply, the NZDUSD is not very likely to establish a strong wave higher.

USDCAD Weekly Outlook:

The Bulls put the breaks on the violent sell off in the USDCAD on Friday, but did not yield a strong buy signal like other USD crosses. Key off the downside breakout level. Trading above here keeps the short-term bounce in play for a correction higher. If the USD strength carries over into the week, then a rally in this market is likely. Do not expect a major move. It will be a fight up towards the upside target zone. With the Fed meeting in a couple of weeks, and the Bonds in sell mode, this currency should stay firm. However, a firm market is only expected to be short lived.

Trading below 1.3299 confirms the trend is in place, and weakness should drive the USDCAD back down towards the 1.3170 level. The trend is bearish, and it is unlikely that even a surge in USD strength will change the overall direction of the market. Economic fundamentals are mixed between the U.S. and Canada. Overall, this currency is in a wide range trade that is leaning on Monthly support. Be mindful of this. If the Bears take out the 1.3170 level, then the Bears could confirm a shift in the long-term trend from Neutral to Bear. 1.2750 is the extended monthly downside target if the trend really starts to fall apart. Remember there is divergence in the USD crosses, and USD strength will have less of an impact in many currency pairs like the USDCAD.