2024-01-04 08:44
The FOMC meeting minutes showed confidence that inflation is under control. There are no clear indications of when the Fed might initiate rate cuts. A third consecutive monthly decline in US job openings in November indicated a softening labor market. Thursday’s EUR/USD forecast points to a bearish trend as investors reassess their predictions for this year’s Federal Reserve rate cuts. Consequently, there is an air of caution in the markets after a strong risk rally just last month. If you are interested in automated forex trading, check our detailed guide- The minutes of the Fed’s December policy meeting on Wednesday indicated officials’ confidence in easing inflation. However, policymakers still perceived the need to keep rates restrictive for a while. Still, they raised concerns about the potential adverse effects of an “overly restrictive” monetary policy on the economy. Moreover, there were no clear indications of when the Fed might initiate rate cuts. Christopher Wong, a currency strategist at OCBC, noted, “The messaging that rates will stay elevated raises a second look at the aggressive cut expectations markets are pricing.” Meanwhile, data on Wednesday revealed a further contraction in US manufacturing in December. Additionally, a third consecutive monthly decline in US job openings in November indicated a softening labor market. Ongoing signs of a cooling US economy have reinforced expectations of Fed rate cuts this year, as inflation is easing. However, traders remain divided on the timing and extent of easing by the central bank. Current market pricing suggests a roughly 72% chance of the Fed initiating rate cuts in March, down from 87% a week ago. EUR/USD key events today German preliminary CPI m/m The US ADP non-farm employment change US unemployment claims EUR/USD technical forecast: Price action sinks below 30-SMA threshold The bias for EUR/USD is bearish on the charts as the price is now trading on the lower side of the 30-SMA. Initially, the price had been ascending, making higher highs. However, it was overbought at the reversal point, and sellers made a bearish engulfing candle, the first sign of a looming shift in sentiment. This shift came when the price finally broke below the 30-SMA, and the RSI dipped below the pivotal 50 level. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Currently, sellers have paused near a strong support zone comprising the 1.0900 key level and 0.618 fib retracement level. This support might trigger a pullback to retest the 30-SMA before the decline continues. The next target for the downtrend is at the 1.0750 support. https://www.forexcrunch.com/blog/2024/01/04/eur-usd-forecast-dollar-soars-amid-revised-rate-cut-outlook/
2024-01-03 12:18
Validating its breakout activates an upside continuation. Taking out the median line (ml), validates a larger growth. The FOMC Meeting Minutes should be decisive today. The USD/JPY price is trading at 142.64 at the time of writing and is fighting hard to resume its leg higher. The Japanese banks were also closed today in observance of the 4-day Bank Holiday. If you are interested in automated forex trading, check our detailed guide- The greenback took the lead even though the US Final Manufacturing PMI and Construction Spending came in worse than expected in the last trading session. Today, the US economic figures should bring high action. The JOLTS Job Openings could be reported at 8.84M versus 8.73M in the previous reporting period, ISM Manufacturing PMI could jump to 47.2 points from 46.7, while ISM Manufacturing Prices may drop to 49.5 points from 49.9 points. In addition, the Wards Total Vehicle Sales data should be released as well. Still, the traders are focused on the FOMC Meeting Minutes. The report represents a high-impact event, so the volatility should be huge. A dovish speech could punish the USD again, and the sentiment could change. From the technical point of view, the USD/JPY price jumped above the downtrend line, and now it challenges the supply zone from right below 142.83, which was previously high. Validating its breakout through the downtrend line and making a new higher high activates further growth towards the median line (ml) of the ascending pitchfork. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Still, a larger swing higher should be triggered after making a valid breakout through the median line (ml). On the contrary, invalidating its breakout may announce a new sell-off towards 141.00 psychological level. https://www.forexcrunch.com/blog/2024/01/03/usd-jpy-price-challenges-key-supply-zone-ahead-of-fomc/
2024-01-03 09:58
Prices at British store chains increased at the slowest rate in a year and a half. Food price inflation in Britain fell to 6.7%. There was a sharp decline in Britain’s output and employment in December. On Wednesday, the GBP/USD forecast leans towards a bearish outlook, propelled by the dollar’s resurgence and promising indications of inflation easing in Britain. Moreover, the decline in the currency is a reversal from the recent rally in December when it soared to a near 5-month high due to dollar weakness. If you are interested in automated forex trading, check our detailed guide- Meanwhile, in 2023 it rose by almost 6% as economic data came in better than expected. Notably, markets expected the BOE to hold on to high interest rates for longer. However, the economy is weakening, and a looming election means uncertainty. Therefore, the pair might not rally as much this year. Meanwhile, in December, prices at British store chains increased at the slowest rate in a year and a half, as reported on Tuesday. On the other hand, food price inflation fell to 6.7%. However, the Monex analysts sounded a note of caution for pound bears. “Although the data is disinflationary at the margin, market expectations for rate cuts in the UK continue to look aggressive,” they said. Notably, markets are fully pricing a 25 basis BoE rate cut in May and nearly 140 bps of cuts this year. Additionally, investors processed global factory activity data on Tuesday. Britain’s manufacturing sector faced setbacks in its efforts to return to growth. There was a sharper decline in output and employment in December compared to the previous month. GBP/USD key events today US ISM manufacturing PMI US JOLTs job openings FOMC meeting minutes GBP/USD technical forecast: Breaking below key support triggers reversal On the charts, the pound has broken below a key support zone, signaling a reversal in the trend to bearish. Consequently, the bearish divergence in the RSI has played out. Sellers took over by breaking below the 30-SMA, support trendline, and the 1.2700 key level. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Furthermore, the price made a strong bearish candle with barely any wicks, showing solid bearish momentum. The decline has paused at the 1.2625 key level, with bears preparing to make lower lows. There is a high chance the decline will continue to the 1.2500 support level, as the RSI shows the price is not yet oversold. https://www.forexcrunch.com/blog/2024/01/03/gbp-usd-forecast-uk-inflation-pressure-subsides-dollar-up/
2024-01-03 08:56
The loonie weakened due to weak factory activity in Canada. Market expectations for Fed rate cuts in 2024 have reduced. Oil prices declined due to interest rate fears and reduced tensions in the Red Sea. The USD/CAD price analysis paints a bullish picture as we launch into the 2024 trading landscape. The Canadian dollar’s descent against the dollar continues due to weak factory activity in Canada. If you are interested in automated forex trading, check our detailed guide- Notably, the Canadian S&P Global Manufacturing Purchasing Managers’ Index worsened on Tuesday, reaching a 43-month low. It reflects the ongoing deterioration in the Canadian economic outlook. Simultaneously, the US Manufacturing PMI component fell below expectations. As such, it kept market risk appetite low and supported the dollar due to risk aversion. In December, the Canadian Manufacturing PMI hit a multi-year low of 45.4, down from November’s 47.7. Similarly, the US Manufacturing PMI for December recorded a four-month low of 47.9. It missed the market’s expectation of a steady reading from November’s 48.2. Moreover, US Construction Spending experienced a decline in November, growing by 0.4% compared to the market forecast of 0.5%. However, October’s Month-over-Month Construction Spending print saw a substantial late revision from 0.6% to 1.2%. At the same time, market expectations for Fed rate cuts in 2024 have reduced. Money markets are now pricing in a median of 150 basis points of rate cuts by the year’s end. Additionally, the currency fell as oil prices declined due to interest rate fears and reduced tensions in the Red Sea. Canada is a significant exporter of oil. Therefore, a decline in oil prices hurts the Canadian dollar. USD/CAD key events today The US ISM manufacturing PMI The US JOLTs job openings The FOMC meeting minutes USD/CAD technical price analysis: Bulls rally from the depths of 1.3200 support On the technical side, USD/CAD has recovered from its lows near the 1.3200 key support level. The bias is bullish as the price sits far above the 30-SMA, with RSI nearly overbought. The bearish trend reversed when the price got oversold, and bulls pushed the price above the 30-SMA. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Currently, the bullish move is nearing the 1.3350 key resistance level. Additionally, there is resistance from the 0.382 fib retracement level. This makes a strong resistance zone that might lead to a pause in the bullish move. However, if the new bias holds firm, the price will only pull back before breaking above the resistance to continue the ascent. https://www.forexcrunch.com/blog/2024/01/03/usd-cad-price-analysis-cad-slips-on-weak-factory-activity/
2024-01-02 14:20
The bias is bullish as long as it stays above the lower median line. The US data could be decisive tomorrow. A new higher high activates further growth. The gold price is trading in the red at $2,067 when writing. The precious metal has turned to the downside after reaching today’s high of $2,078. Probably, XAU/USD slipped lower as the US dollar edged higher. Today, the Eurozone reported mixed data, but the traders wait for the US figures before taking action. If you are interested in automated forex trading, check our detailed guide- The Final Manufacturing PMI could jump from 48.2 to 48.4 points, which could be good for the greenback, while Construction Spending may announce a 0.6% growth again. Positive US data should lift the USD. This situation may punish the price of gold. Tomorrow, the US data could be decisive. The ISM Manufacturing PMI could be reported at 47.2 points, which is above 46.7 points in the previous reporting period. The JOLTS Job Openings indicator is expected to be 8.85M in November, above 8.73M in October, while the ISM Manufacturing Prices indicator may be reported at 50.0 points. Still, the most important event is represented by the FOMC Meeting Minutes. As you already know, the FED is expected to deliver a 75 bps cut in 2024, so a dovish report could weaken the USD. Technically, the bias remains bullish as long as it stays above the lower median line (LML) of ascending pitchfork. As you can see on the hourly chart, the price broke out of a flag pattern, signaling an upside continuation. Still, after the last rally, a retreat was somehow expected. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- The metal could retest the demand zone from right above the lower median line (LML) to attract more buyers before jumping higher. False breakdowns below this dynamic support may announce a new bullish momentum. A new higher high, taking out the 2,081 high, activates further growth. https://www.forexcrunch.com/blog/2024/01/02/gold-price-retraces-to-demand-zone-as-dollar-probes-recovery/
2024-01-02 11:44
Last year, the pound had its strongest performance since 2017, with a 5% gain. Sticky inflation compelled the Bank of England to delay monetary easing compared to its counterparts. Markets expect a 25 basis point BOE rate cut as soon as May. This Tuesday, the GBP/USD price analysis reveals a subtle bearish undertone, a surprising shift following the currency’s stellar 5% surge last year, marking its most robust performance since 2017. If you are interested in automated forex trading, check our detailed guide- However, the likelihood of another rally this year is low due to a weakening economy and election uncertainty. Notably, sticky inflation forced the Bank of England to delay monetary easing compared to its counterparts. Moreover, the dollar fell amid expectations of an early US rate cut. Last year’s gains position the pound favorably in an anticipated election year. However, the driving forces behind the rally are losing momentum. One factor is the weakening impact of interest-rate differentials. The idea that the Bank of England would lag behind the ECB and Fed in policy easing had initially boosted the pound. However, recent economic data has changed this. In November, UK consumer price inflation sharply eased to 3.9%. At the same time, British gross domestic product was revised downward, revealing a 0.1% contraction in the third quarter. Consequently, traders adjusted their expectations, bringing forward predictions of a first Bank of England rate cut. Currently, markets expect a 25 basis point cut as soon as May, a shift from the previous expectation of August. GBP/USD key events today No significant events are scheduled for the day, making for a quiet trading session. Investors will look forward to key data coming out tomorrow. GBP/USD technical price analysis: Bears strengthen as RSI points to a possible reversal The pound is bullish on the charts as the price is making higher highs and lows and respecting a support trendline. Moreover, the price mainly trades above the 30-SMA with the RSI over 50, supporting the bullish bias. However, this shallow, bullish move has paused near the 1.2800 level. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Furthermore, the new high is weaker than the previous one, as seen in the RSI. A bearish divergence in the RSI suggests that bears might soon push the price below the 30-SMA and the support trendline. Additionally, the trend might reverse if the price makes a lower low below the 1.2700 key level. However, the bullish bias will remain if bulls keep the price above the SMA. https://www.forexcrunch.com/blog/2024/01/02/gbp-usd-price-analysis-pound-weakens-after-2023s-5-surge/
