2024-11-22 10:03
UK retail sales fell by 0.7% in October, compared to estimates of a 0.3% drop. The UK economy only expanded by 0.1% in the third quarter. US initial jobless claims unexpectedly fell last week from 219,000 to 213,000. The GBP/USD price analysis shows weaker consumer spending in the UK, which has pushed the pound to a six-month low. On the other hand, the US labor market remains resilient, reducing Fed rate cut expectations. Data on Friday revealed that retail sales in the UK fell by 0.7% in October, compared to estimates of a 0.3% drop. The decline in sales is a clear indication that consumer spending is weak. This follows other economic reports showing a slowdown in the UK economy. Notably, GDP data showed that the economy only expanded by 0.1% in the third quarter. Adding fuel to the fire, the UK PMI reading for both services and manufacturing missed the estimates. The negative figures may keep lasting pressure on the pound throughout the current trading session. If this trend continues, the Bank of England might be forced to change the timing for rate cuts. Initially, experts believed the new government budget would boost economic performance. However, so far, economic data has shown the opposite. On the other hand, the US economy has remained resilient despite high interest rates, keeping policymakers cautious. Data on Thursday revealed that initial jobless claims unexpectedly fell last week from 219,000 to 213,000. Meanwhile, economists had expected 220,000 claims. Labor market resilience has kept the Fed from rushing to lower borrowing costs. At the same time, Trump’s recent win has shifted the outlook for economic growth and inflation. His policy changes might boost growth and lead to a spike in inflation. High inflation will force the Fed to keep interest rates at a restrictive level, which is bullish for the dollar. GBP/USD key events today US flash manufacturing PMI US flash services PMI GBP/USD technical price analysis: Bears trigger a decline to the 1.2500 support On the technical side, the GBP/USD price has broken below the 1.2600 support level to make a new low near the 1.2500 key psychological level. The new low indicates a continuation of the downtrend after retesting the 30-SMA resistance. However, the RSI has made a slight bullish divergence. While the price has made a lower low, the indicator has made a higher one. This is a sign that bearish momentum is fading and could lead to a reversal. However, if the price stays below the 30-SMA, bears might eventually breach the 1.2500 support level. https://www.forexcrunch.com/blog/2024/11/22/gbp-usd-price-analysis-hits-6-month-low-as-uk-sales-slump/
2024-11-22 09:28
Japan’s core consumer inflation increased by 2.3% in October. 56% of economists expect the Bank of Japan to hike rates in December. US jobless claims unexpectedly fell to 213,000. The USD/JPY outlook shows a stronger yen amid increasing bets for a December rate hike by the Bank of Japan. However, the pair fluctuated on Friday after mixed economic data from Japan. Meanwhile, the dollar remained strong after data in the previous session revealed a still-tight US labor market. Japan released mixed reports on Friday, which initially boosted the yen before it gave up its gains. Core consumer inflation in the country increased by 2.3% in October, above forecasts of 2.2%. At the same time, services inflation increased by 1.5% after a previous reading of 1.3%. Increasing price pressures give the Bank of Japan enough room to hike interest rates. As a result, traders raised the likelihood of a December rate hike. At the same time, a Reuters poll revealed that 56% of economists expect the Bank of Japan to hike rates in December. This increased from the previous month when only 49% expected such a move; hence, the yen gained. However, a separate report revealed that manufacturing activity in Japan fell in November amid weak demand in China. On the other hand, data from the US on Thursday revealed that jobless claims unexpectedly fell to 213,000, compared to forecasts of 220,000 claims. Few claims indicate a low unemployment rate and a robust labor market, boosting the dollar. At the same time, a strong labor market lowers the likelihood of a Fed rate cut in December. Market participants are now awaiting US business activity data for more clues on whether policymakers will vote to cut rates in December. USD/JPY key events today US flash manufacturing PMI US flash services PMI USD/JPY technical outlook: Bears meet strong hurdle at 154.51 On the technical side, the USD/JPY price trades below the 30-SMA with the RSI below 50, supporting a bearish bias. However, the decline has paused to consolidate near the 154.51 key support level. Price action shows many wicks as bears and bulls battle for control between the support level and the 30-SMA resistance. If bears win, the price will make a lower low and target the next support at 151.74. On the other hand, if bulls win, USD/JPY will breach the SMA to retest the 156.51 resistance level. https://www.forexcrunch.com/blog/2024/11/22/usd-jpy-outlook-rising-bets-for-rate-hike-boost-yen/
2024-11-21 12:16
The euro collapsed on Wednesday after reports that Ukraine had hit Russia with missiles. Traders fear Trump’s looming tariffs on Eurozone goods. Economists expect the Fed to lower borrowing costs in December. The EUR/USD forecast shows a fragile euro as investors worry about the escalating Ukraine war and Trump’s looming tariffs. Meanwhile, the greenback paused its rally as traders took profits after the Trump trade. The euro collapsed on Wednesday after reports that Ukraine had hit Russia with missiles. The conflict between Russia and Ukraine has escalated in recent days, with Putin threatening to use nuclear power. Consequently, there is an ever-increasing risk that the war will hurt the Eurozone economy. At the same time, traders fear Trump’s looming tariffs on Eurozone goods, which might weaken the economy. Trump has promised to impose taxes on European cars, reducing demand. This looming threat to Eurozone exports has clouded the outlook for the euro. Elsewhere, the dollar paused its Trump rally as markets awaited new developments after the election. Currently, the president-elect is forming his cabinet, which has put a pause on policy speculations. The greenback has rallied to a one-year high against the euro amid optimism that Trump’s presidency will bring robust economic growth and higher inflation. As a result, markets have gradually lowered expectations for Fed rate cuts. A Reuters poll revealed that economists expect the Fed to lower borrowing costs in December. However, market participants have lowered bets to slightly below 60%. Meanwhile, the outlook for 2025 has also shifted, with experts forecasting fewer rate cuts. Traders will now watch economic reports to gauge whether the Fed will cut in December. At the same time, policymaker remarks might give more insight into future policy moves. EUR/USD key events today US unemployment claims EUR/USD technical forecast: Downtrend resumes after brief pause On the technical side, the EUR/USD price has dropped back below the 30-SMA after recently pausing its decline. The downtrend halted near the 1.0501 key level before bulls took charge and broke above the SMA. However, despite two attempts, they failed to go beyond the 1.0600 key level. As a result, bears resurfaced and broke below the SMA. The price has now retested the SMA as resistance and is bouncing lower to challenge the 1.0501 support level. A break below this support will signal a continuation of the previous downtrend. https://www.forexcrunch.com/blog/2024/11/21/eur-usd-forecast-geopolitical-trade-tensions-weaken-euro/
2024-11-21 12:12
Recent Bank of Japan remarks have shown a growing urgency to strengthen the weak yen. BoJ’s Ueda said the central bank would focus on incoming data before the December meeting. The dollar eased as market participants awaited new developments in the US. The USD/JPY outlook indicates growing enthusiasm among yen bulls after recent hawkish remarks from BoJ policymakers. Meanwhile, the dollar eased from recent peaks as traders awaited new US politics and monetary policy developments. Recent Bank of Japan remarks have shown a growing urgency to strengthen the weak yen. BoJ governor Kazuo Ueda noted that rising wage growth would drive inflation, allowing the central bank to continue hiking interest rates. On Thursday, he said the central bank would focus on incoming data before the December meeting to decide whether to hike interest rates. Moreover, policymakers will focus on the impacts of a weak yen on Japan’s economy. These comments have boosted the yen as markets see a growing likelihood that interest rates in Japan will rise in December. Before the US election, a Reuters poll had shown that most economists expected the Bank of Japan to pause in December and hike in March next year. However, Trump’s win has shifted the outlook for US monetary policy. Markets expect fewer rate cuts by the Fed, which will keep the greenback strong. Consequently, further weakness for the yen is piling more pressure on Japan to hike interest rates. Meanwhile, after a solid Trump rally, the dollar eased as market participants awaited new developments in the US. On the other hand, Fed policymakers have assumed a more hawkish tone, lowering rate cut expectations. Nevertheless, economists still believe the central bank will cut rates in December. USD/JPY key events today US unemployment claims USD/JPY technical outlook: Lower high signals bearish resurgence On the technical side, the USD/JPY price has broken well below the 30-SMA, showing control has shifted from bulls to bears. At the same time, the price has punctured the 154.51 support level. Meanwhile, the RSI has dipped into bearish territory below 50. Initially, the price broke below its bullish trendline after a surge in bearish momentum. However, bulls managed to retake control. Unfortunately, they only made a lower high, indicating weaker momentum. Consequently, bears returned and are ready to break below 154.51. Such an outcome would allow USD/JPY to revisit the 151.74 support level. https://www.forexcrunch.com/blog/2024/11/21/usd-jpy-outlook-yen-bulls-roar-as-boj-signals-rate-hike/
2024-11-20 10:32
Inflation in the UK rose by 2.3%, above estimates of a 2.2% increase. The Bank of England will likely take a less aggressive approach to rate cuts. The US dollar remained steady after a rally on Tuesday due to safe-haven inflows. The GBP/USD forecast shows a better-than-expected reading for UK inflation, which has briefly boosted the pound. Meanwhile, the dollar remained steady after rallying in the previous session amid fears of an escalation in the Russia-Ukraine war. Data on Wednesday revealed that inflation in the UK rose by 2.3%, above estimates of a 2.2% increase. Moreover, it was higher than the previous month when prices increased by 1.7%. On the other hand, services inflation rose by 5.0%, lowering expectations for Bank of England rate cuts. As a result, the pound jumped. Markets are pricing fewer rate cuts in the UK in 2025 than other major economies. The new government recently read a budget that will likely increase inflation and economic growth. Therefore, the Bank of England will likely take a less aggressive approach to rate cuts. Meanwhile, the US dollar remained steady after a rally on Tuesday due to safe-haven inflows. A nuclear scare from Russia raised fears of an escalation in the Ukraine war. As a result, traders sought safety in currencies like the dollar and the yen. Meanwhile, risky currencies like the pound collapsed. The risk of an escalation in Ukraine and Trump’s policy changes will likely keep the dollar on solid ground. Trump’s policy proposals have changed the outlook for the US economy and inflation. Experts expect robust growth, increasing consumer prices and complicating the Fed’s rate-cutting cycle. Furthermore, incoming data will shape the outlook for future rate cuts. Currently, markets are pricing a 60% chance of a Fed rate cut in December. GBP/USD key events today US unemployment claims GBP/USD technical forecast: Bulls fail to show strength above 30-SMA On the technical side, the GBP/USD price trades slightly above the 30-SMA, a sign that bulls have challenged the downtrend. However, the price made a weak break above the SMA and bears seem ready to take back control. At the same time, the RSI trades below 50, indicating strong bearish momentum. The price broke above the SMA after the RSI made a bullish divergence. However, if bulls cannot sustain an uptrend, the price will likely break below the SMA to retest the 1.2600 support level. https://www.forexcrunch.com/blog/2024/11/20/gbp-usd-forecast-uk-inflation-surprise-briefly-lifts-pound/
2024-11-20 09:00
Canada’s inflation prices increased by 2.0% in October. The greenback eased after a rally early on Tuesday due to safe-haven demand. Markets await more clues on the outlook for Fed rate cuts. The USD/CAD price analysis shows a bearish shift in sentiment after data revealed that inflation in Canada was higher than expected. Meanwhile, the dollar eased as safe-haven demand caused by Putin’s nuclear announcement faded. Data on Tuesday revealed that Canada’s inflation prices increased by 2.0% in October, above estimates of 1.9%. Moreover, it was well above the previous reading of 1.6%. Consequently, traders lowered bets for another super-sized rate cut in December. Initially, low inflation and poor growth in Canada pushed the Bank of Canada to cut rates by 50-bps in October. Furthermore, markets were pricing a 38% chance of another such move in December. However, after the inflation report, this likelihood fell to 23%. As a result, the Canadian dollar rallied against the dollar. On the other hand, the greenback eased after a rally early on Tuesday due to safe-haven demand. Traders rushed for safety after Putin announced a lower threshold for using nuclear power against Ukraine. This change came after Ukraine used US missiles to attack Russia. However, the US made no response, easing fears of a nuclear war and an escalation in the Russia-Ukraine war. Meanwhile, markets await more clues on the outlook for Fed rate cuts. Policymakers have maintained a slightly hawkish tone, leading to a decline in bets for a December rate cut. Moreover, looming policy changes under Trump’s administration have changed the outlook for future Fed moves. Upbeat economic data will further support a pause in December. On the other hand, if data comes in line with forecasts or is slightly below, the Fed will cut rates by 25-bps in December. USD/CAD key events today US unemployment claims USD/CAD technical price analysis: Bears plunge to 1.3951 support On the technical side, the USD/CAD price has broken below its bullish trendline, indicating a shift in sentiment. At the same time, the price trades far below the 30-SMA, showing a solid lead by bears. Meanwhile, the RSI trades near the oversold region, suggesting solid bearish momentum. However, bears are facing the 1.3951 support level. A break below this level will allow bears to revisit the 1.3850 level. However, before that, the price might retest the recently broken trendline. https://www.forexcrunch.com/blog/2024/11/20/usd-cad-price-analysis-canada-inflation-exceeds-projections/
