2024-01-02 09:44
Markets are waiting for data from the US this week. Home prices in Australia increased last year, recovering significantly from the 5% drop in 2022. The RBA lifted rates in November last year by a quarter point to 4.35%. The AUD/USD outlook took a bearish turn on Tuesday as the dollar surged on the first day of the year. Traders focused on economic data, anticipating crucial insights into the Fed’s policy outlook. Data from the US this week will include job vacancies and employment change. If you are interested in automated forex trading, check our detailed guide- Additionally, traders will go over minutes from the Fed meeting in December, coming out on Thursday. Meanwhile, home prices in Australia increased last year, recovering significantly from the 5% drop in 2022. However, RBA rate hikes and the high cost of living in the country have negatively impacted growth in the last part of 2023. Property consultant CoreLogic released figures on Tuesday showing prices rose by 8.1% in 2023. However, this increase was far below the 24.5% rise reported in 2021. Meanwhile, prices in December recorded the smallest increase since February, coming in at 0.4%. Notably, the RBA lifted rates in November last year by a quarter point to 4.35%. This hike came due to worries inflation expectations might increase. Consequently, interest rates in the country have risen by a significant 425 basis points starting May last year. Australian households are suffering as high inflation increases financial pressures. Notably, inflation hit a high of 7.8% last December and then fell to 5.4% in the third quarter. Still, the RBA believes that most borrowers in the country can service their mortgages. AUD/USD key events today No high-impact releases are coming from the US or Australia today. Therefore, the pair will likely pause ahead of data coming out tomorrow. AUD/USD technical outlook: Bears puncture SMA after bearish RSI divergence On the technical side, AUD/USD bears have strengthened enough to puncture the 30-SMA support. This move comes after the RSI made a bearish divergence with the price as bullish momentum weakened. Notably, the bullish trend started weakening at the 0.6725 key level as the slope of the trend became shallow. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Finally, the trend stopped at the 0.6850 key level. Although bulls tried to push above this resistance, bears soon took over, sending the price below the SMA. At the same time, the RSI punctured the pivotal 50 mark. Still, the price is retesting 0.6850 before likely dropping further. https://www.forexcrunch.com/blog/2024/01/02/aud-usd-outlook-dollar-strengthens-ahead-of-key-data/
2023-12-23 19:02
The Canadian economy experienced its third consecutive month of sluggish performance. Canada’s annual inflation rate stayed at 3.1% in November. US prices experienced their first decline in over 3 1/2 years in November. The outlook takes a bearish turn in the USD/CAD weekly forecast as the Bank of Canada urges caution, deeming it premature to anticipate rate cuts. Meanwhile, in the US, traders expect rate cuts in 2024 against the backdrop of softer inflation. –Are you interested to learn more about forex options trading? Check our detailed guide- Ups and downs of USD/CAD The pair had a bearish week as the Canadian dollar strengthened with oil prices amid supply concerns. Moreover, the currency weakened due to a decline in the dollar after the core PCE index report. In November, US prices experienced their first decline in over 31/2 years. This downturn increased expectations of an interest rate cut by the Federal Reserve in March. Meanwhile, the Canadian economy experienced its third consecutive month of sluggish performance in October. Moreover, economists predict a modest growth outlook for November. The central bank asserts that it’s premature to anticipate rate cuts. However, financial markets expect a decline in interest rates starting in April. Elsewhere, Canada’s annual inflation rate stayed at 3.1% in November, surpassing the central bank’s 2% target. Next week’s key events for USD/CAD There are no key events next week as markets will be closed for Christmas. Therefore, investors will prepare for next year. The new year will start with major reports from the US, including the FOMC meeting minutes and the monthly employment report. Similarly, Canada will release data on employment change. Traders will be keen on the FOMC meeting minutes as they might contain clues on the Fed’s policy outlook. Meanwhile, the employment reports from the US and Canada will influence decisions at the next Fed and BoC policy meetings. USD/CAD weekly technical forecast: Decline pauses at the 1.27 fib extension level The USD/CAD price has broken below major support levels, strengthening the bearish bias. After respecting the 22-SMA as resistance, the price fell through the 1.3500 and 1.3350 support levels. At the same time, it fell well below the SMA, showing a steep and robust bearish move. Meanwhile, the RSI dipped into oversold territory, supporting solid bearish momentum. –Are you interested to learn more about forex tools? Check our detailed guide- However, the price has also extended to a strong fib support level at 1.27. Therefore, bulls might get the chance to push the price off this support level to retest the 1.3350 key level or the 22-SMA. However, the price will then likely continue lower with the next target at the 1.3100 support. https://www.forexcrunch.com/blog/2023/12/23/usd-cad-weekly-forecast-boc-fed-divergence-favors-bears/
2023-12-23 19:01
Data showed that annual US inflation fell further below 3% in November. Figures on Thursday revealed a worsening UK budget situation. Inflation in the UK was lower than anticipated in November. The dollar is caught in the sway of softer inflation signals and continues its decline, casting a favorable glow on the GBP/USD weekly forecast. –Are you interested to learn more about forex options trading? Check our detailed guide- Ups and downs of GBP/USD The pound ended the week slightly high, although it was nearly flat after fluctuating. It remained stable against the dollar, with traders absorbing the latest information on the UK budget deficit. Moreover, the impact of Wednesday’s November inflation data, which was lower than anticipated, continued to resonate in the market. Thursday’s figures revealed a worsening budget situation for British Prime Minister Rishi Sunak, as the November deficit exceeded expectations. Notably, the pair fell on Wednesday to the lowest point in almost two months following the key inflation reading. Meanwhile, the dollar index declined on Friday, reaching a nearly five-month low. This decline came after data showed that annual US inflation had further slowed below 3% in November. Consequently, it strengthened market expectations for a US interest rate cut in March. Next week’s key events for GBP/USD The markets will be closed for the Christmas holiday next week, so investors will look out for major events in the first week of 2024. In the first week of 2024, traders will focus on data from the UK and the US, showing business activity in the manufacturing sectors. Additionally, the US will release the FOMC meeting minutes, which will show what policymakers discussed at the last meeting in 2023. Lastly, the US employment report will show the state of the labor market. A higher-than-expected reading could reduce Fed rate cut bets, while the opposite is true. GBP/USD weekly technical forecast: Bullish trend shows signs of a slowdown The bullish trend on the 4-hour chart has slowed down after reaching the 1.2803 resistance level. Moreover, the slope of the 22-SMA has become shallower, and the price is not making big swings from the SMA. At the same time, bears are showing some strength as they keep challenging the SMA support. –Are you interested to learn more about forex tools? Check our detailed guide- Meanwhile, the RSI has made a bearish divergence. While the price has made a new higher high, the RSI has made a lower high, pointing to weaker bullish momentum. Since the price is already trading close to the SMA support, the bearish divergence might lead to a reversal in the trend. However, bears must break below the 22-SMA and the 1.2501 support level to confirm a reversal. https://www.forexcrunch.com/blog/2023/12/23/gbp-usd-weekly-forecast-dollar-falls-as-inflation-eases/
2023-12-22 13:22
The US inflation scenario is now leaning towards lower levels. The dollar index is poised for a weekly loss of approximately 0.73%. Data revealed a 2.5% year-on-year increase in Japan’s core consumer prices for November. Friday’s USD/JPY price analysis was bearish, with the dollar weak and investors on the edge as they eagerly anticipated US inflation data. According to Chris Weston, the head of research at Pepperstone, the US inflation scenario is now unbalanced and leaning towards lower levels. Moreover, the dollar index is poised for a weekly loss of approximately 0.73%, extending the previous week’s 1.3% decline. Meanwhile, the yen held steady, unaffected by Friday’s data revealing a 2.5% year-on-year increase in Japan’s core consumer prices for November. It marked the slowest growth over a year. Moreover, this eases pressure on the Bank of Japan to scale back its substantial stimulus. Notably, the core consumer price index decelerated from the 2.9% gain in October. Furthermore, the Japanese currency appears poised to end the week flat. Earlier in the week, the BoJ maintained its ultra-loose policy settings and provided few indications of when it might shift away from negative interest rates. Elsewhere, the minutes of the Bank of Japan’s October meeting revealed ongoing divisions among board members regarding the timeline for Japan to meet conditions for an exit. Meanwhile, a Reuters poll conducted in November showed that over 80% of economists expected that the BoJ would conclude its negative rate policy next year. USD/JPY key events today US Core PCE Price Index m/m Revised UoM US Consumer Sentiment USD/JPY technical price analysis: Price returns to crucial 142.01 support level On the charts, USD/JPY is back at the 142.01 support level. This comes after a failed attempt to reverse the trend. Initially, buyers threatened to take control when sellers challenged the 142.01 level a second time and failed to break below. However, the price stopped at the resistance trendline and the 145.01 key level. –Are you interested to learn more about forex tools? Check our detailed guide- Therefore, sellers reversed the bullish move and pushed the price back below the 30-SMA. Sellers are challenging the 142.01 support level for a third time. If they are strong enough, the price will break below and fall to the 140.51 level and lower. However, if the support is firm, bulls might resurface. https://www.forexcrunch.com/blog/2023/12/22/usd-jpy-price-analysis-investors-on-edge-ahead-of-us-inflation/
2023-12-22 08:32
Investors are preparing for the US core personal consumption expenditures data. A rebound in US stocks supported the Canadian dollar on Thursday. Canadian retail sales rose by 0.7% in October compared to September. A bearish tone set in for the USD/CAD outlook as Friday unfolded. The dollar, perched near a four-month low, held its breath ahead of a game-changing US inflation measure. The core PCE report will provide valuable insights into the Fed’s considerations for potential interest rate cuts in the upcoming year. –Are you interested to learn more about forex options trading? Check our detailed guide- Notably, the US core personal consumption expenditures data is the Federal Reserve’s favored underlying inflation gauge. Anticipations suggest a 3.3% annualized growth in the core measure, a slight decrease from October’s 3.5% upswing. Meanwhile, the Canadian dollar continued its recent rise against the US dollar, spurred by a Wall Street rally on Thursday. As a result, there is pressure on speculators with significant short positions in the Canadian dollar. “A rebound in US stocks prompted the USD to relinquish yesterday’s gains. Therefore, it pushed USD-CAD lower in the process,” noted George Davis from RBC Capital Markets. Notably, Wall Street recovered much of the previous day’s losses as economic data increased optimism about potential Fed rate cuts. At the same time, speculators scaled back their bearish bets on the Canadian dollar, reducing positions that had reached a six-year high in November. Elsewhere, Canadian retail sales rose by 0.7% in October compared to September, with even more substantial growth in volume terms. However, a preliminary estimate for November showed no growth. USD/CAD key events today Canada GDP m/m US Core PCE Price Index m/m US Consumer Sentiment USD/CAD technical outlook: Downtrend extends to the key 2.414 fib level Despite weakness in the downtrend, USD/CAD has made a new low, extending the price down to the key 2.414 fib level. However, the price is staying close to the 30-SMA, a sign that bears are not as strong as they were when the move began. Moreover, the RSI has made a bigger bullish divergence, showing bearish momentum has weakened. –Are you interested to learn more about forex tools? Check our detailed guide- Since bears are weaker and the price has met strong support at the 2.414 fib level, bulls might resurface for a pullback or reversal. Therefore, the price will likely soon retest the 1.3350 level and the 30-SMA. A break above the SMA would confirm a bullish takeover. https://www.forexcrunch.com/blog/2023/12/22/usd-cad-outlook-dollar-near-4-month-low-ahead-of-inflation/
2023-12-21 13:25
The US and Canadian data should move the rate today. A new higher high activates further growth. The bias remains bullish as long as it stays above the lower median line (LML). The gold price is trading in the green at $2,037 at the time of writing. The precious metal tries to resume its upside movement. The US dollar remains bearish, so a deeper drop can be expected. –Are you interested to learn more about forex options trading? Check our detailed guide- This scenario helps the XAU/USD buyers to take it higher. Still, the fundamentals could shake the price today. In the short term, the yellow metal dropped a little only because the US CB Consumer Confidence and Existing Home Sales came in better than expected in the last trading session. Today, the US is to release high-impact data, such as the Final GDP, which may announce a 5.2% growth again, and the Unemployment Claims indicator, which is expected at 214K in the last week, above 202K in the previous reporting period. Also, the Final GDP Price Index, Philly Fed Manufacturing Index, and CB Leading Index data will be released. The yellow metal remains under strong upside pressure despite temporary retreats. The Canadian retail sales data could significantly impact the XAU/USD later. Tomorrow, the US publishes the Revised UoM Consumer Sentiment, New Home Sales, Durable Goods Orders, Core Durable Goods Orders, and the Core PCE Price Index. From a technical point of view, the XAU/USD retreated a little after failing to reach the $2,047 mark on the last attempt. Still, the short-term correction seems over. The price developed a flag pattern, seen as an upside continuation formation. –Are you interested to learn more about forex tools? Check our detailed guide- It challenges the flag’s resistance, so we must wait for confirmation before taking action. Also, from my previous analysis, you knew that the yellow metal is trapped between $2,015 and $2,047 levels. The bias remains bullish as long as it stays above the lower median line (LML). Activating the flag formation and making a new higher high, a valid breakout through 2,047 validates further growth. https://www.forexcrunch.com/blog/2023/12/21/gold-price-forms-a-bullish-flag-all-eyes-on-us-gdp-data/
