Forex Weekly Outlook- 16 August to 20 August, 2021

Forex Weekly Outlook- 16 August to 20 August, 2021

Contents

Weekly Forex Outlook and Review for 16 to 20 August 2021

The US Dollar is still strong against other currencies that came from the strong rebound in the US CPI after four consecutive negative marks. Investors will see Retail sales this week, which is expected to come lower than the expectation. Moreover, among other releases, central banks are meeting RBNZ and the unemployment rate from Australia.

The US Dollar Index failed to hold above the 93.20 level and moved lower with solid bearish pressure. Although the price is facing minor support from the dynamic 20 EMA on the daily chart, we may expect a new move after the Retail sales release.

So, considering economic releases, let’s see what might happen in the coming days:

EUR/USD

EUR/USD rebounded higher from the 1.1711 support level with a strong bullish daily close. However, the price failed to move above the dynamic 20 EMA and is currently facing a minor resistance after the week.

EURUSD Analysis

This week, our approach is to open a buy position if the price shows any minor rejection from the 1.1750 intraday support level. Moreover, there are a lot of economic events waiting to come that may increase the price volatility. In that case, a break below the 1.1711 level is possible, altering the current market structure.

GBP/USD

GBP/USD showed a V-shape recovery, and if we draw a Fibonacci retracement from the 20 July low to 30 July high, we would see that the price rejected the 61.8% Fibonacci retracement with a bullish daily close. Therefore, as the price is trading within the Friday bullish candle, we may expect the bullish pattern to continue.

Therefore, any bullish daily close above the 1.3900 key resistance level may initiate the broader upside pressure that may extend towards the 1.4100 level in the coming days.

NZD/USD

NZDUSD is highly volatile as the price remains within the range between 0.7017 and 0.6942 level for a considerable time. Therefore, until a strong breakout, we will focus on traditional support-resistance-based trading, but we need to wait for the key fundamental event for this week.

NZDUSD Analysis

The trading approach for this week is to wait for a bullish breakout above the 0.7017 level with a rate hike in New Zealand. Moreover, the bullish pressure may extend towards the 0.7150 level.

XAU/USD

The Gold exhausted lower with a massive bearish candle and rebounded higher with a similar speed.

Although the price moved lower with a strong bearish candle, it rebounded, and a daily candle appeared above the 1765 level. Therefore, we may expect the bullish pressure to continue until the price breaks below the 1765 level in the coming days.

BTC/USD

BTCUSD kept the promise by breaking above the 40,000 level with an intense bullish pressure where a pending correction may happen this week.

BTCUSD Analysis

There are two possible scenarios for Bitcoin-

  • The test of 50,000 key resistance levels and a 10% drop
  • A correction from the current price and breaks above the 50,000 level

There is a hidden divergence in play, which is also a sign of a potential bearish correction in the price.

Overall, this week’s leading investors’ focus will be the RBNZ rate decision, along with US retail sales. If the US retail sales surprise investors by coming better than expected, we may see a broader USD strength in the market.

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