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/
2023-12-21 10:04
ECB policymakers tried to discourage traders from speculating on impending rate cuts. Traders raised their bets on lower ECB rates after Britain’s lower inflation figures. Investors are awaiting the final estimates of US third-quarter GDP. ECB policymakers fell short in reducing rate-cut expectations, resulting in a bearish EUR/USD outlook on Thursday. Two influential ECB hawks tried to discourage traders from speculating on impending rate cuts on Wednesday. However, their efforts failed to yield any results. Moreover, investors remained cautious ahead of the US GDP report. –Are you interested to learn more about forex options trading? Check our detailed guide- Bundesbank President Joachim Nagel and his Dutch counterpart Klaas Knot emphasized the need for the ECB to take time before signaling victory over historically high inflation. Nagel stated, “We must initially remain at the current interest rate plateau so that monetary policy can fully develop its inflation-dampening effect.” Additionally, he warned speculators about expecting an imminent interest rate cut, advising them to be careful as some have already miscalculated. However, Nagel admitted that rates had likely reached their peak. This sentiment was echoed by Knot. Still, traders maintained their expectations. Notably, after a weaker-than-expected inflation print in Britain, they raised their bets on lower ECB rates. Moreover, money markets fully expect 150 basis points of cuts for the next year. It would take the ECB’s deposit rate to 2.5%. Moreover, there is a slight risk ECB rates will end the year at 2.25%. At the same time, investors eagerly awaited more US economic data for additional insights into the global interest rate trajectory. The final estimates of US third-quarter GDP and the weekly jobless claims report will give clues on Fed rate cuts. EUR/USD key events today The US Gross Domestic Product report The US initial jobless claims report EUR/USD technical outlook: Price consolidates after hitting strong resistance On the charts, the EUR/USD uptrend has paused to consolidate after meeting strong resistance at the 1.1000 key level. The price now trades between the 1.1000 resistance and the 1.0900 support levels. Moreover, the price respects clear trendline support and resistance levels, forming a wedge pattern. –Are you interested to learn more about forex tools? Check our detailed guide- Looking at the indicators, the RSI is above 50, while the 30-SMA sits below the price, pointing to a bullish bias. Therefore, bulls might get another chance to retest the 1.1000 key resistance level. However, if the price breaks below the SMA, it might continue consolidating between the 1.1000 and 1.0900 key levels. https://www.forexcrunch.com/blog/2023/12/21/eur-usd-outlook-ecb-fails-to-suppress-rate-cut-bets/
2023-12-21 08:37
British inflation hit an annual rate of 3.9% in October, marking a two-year low. Investors have fully priced in a Bank of England rate cut by May 2024. Analysts anticipate an easing in Friday’s US core personal consumption expenditure. The GBP/USD forecast maintained its bearish outlook on Thursday as the pair grappled with losses ahead of highly anticipated US GDP figures. Wednesday witnessed a notable plunge in the currency, marking its most substantial drop in two months. This downturn resulted from British inflation figures, which fell below expectations. –Are you interested to learn more about forex options trading? Check our detailed guide- British inflation hit an annual rate of 3.9% in October, marking a two-year low. Consequently, traders factored in potential Bank of England rate cuts as early as May. Notably, the annual increase in consumer prices dropped, reaching its lowest level since September 2021. Moreover, investors have fully priced in a Bank of England rate cut by May 2024 and now perceive a nearly 50% likelihood of a cut by March. Vassili Serebriakov from UBS noted that several banks had observed a front-loading of pricing for interest rate cuts. Furthermore, he mentioned that the Bank of England was slightly lagging due to higher inflation but is now aligning its direction with others. Serebriakov also noted that the pound had experienced positive momentum recently. Therefore, the current trend represents a reversal of some of those previous movements. Meanwhile, analysts anticipate a similar easing in Friday’s US core personal consumption expenditure data. They believe the annual inflation rate will slow to 3.3%, its lowest since 2021. There were also expectations of further dollar weakening amid projections of 150 basis points of Federal Reserve cuts in 2024. However, investors remained cautious, temporarily preventing additional dollar selling. GBP/USD key events today Final US GDP q/q US unemployment claims GBP/USD technical forecast: Price is poised for a lower low On the technical side, the pound is on the verge of breaking below strong support to make a lower low. This would further confirm the new bearish direction. The trend recently changed when the price broke below the 30-SMA, and the RSI dipped into bearish territory below 50. –Are you interested to learn more about forex tools? Check our detailed guide- This came after bulls weakened and failed to make a higher high. Instead, the price made a lower high and could soon make a lower low. Furthermore, a continuation of the downtrend would likely lead to a break below the 1.2601 support level. The target for bears is at the 1.618 fib extension level. https://www.forexcrunch.com/blog/2023/12/21/gbp-usd-forecast-pound-nurses-losses-ahead-of-us-gdp/
2023-12-20 12:23
Gold could jump higher as long as it stays above the lower median line. A new higher high activates further growth. The US CB Consumer Confidence should bring high action. The gold price is trading in the red at $2,036 at the time of writing. However, the outlook is neutral in the short-term canvas. The precious metal has changed slightly despite the high-impact data release. –Are you interested to learn more about scalping brokers? Check our detailed guide- It has retreated a little from the yesterday’s top of $2,047 but the upside pressure remains high. The US Housing Starts came in at 1.56M versus 1.36M expected. However, the Building Permits were disappointing in the last session. Furthermore, Canada revealed higher than expected inflation, while the BoJ maintained the monetary policy. Today, the United Kingdom Consumer Price Index reported 3.9% growth, less compared to the 4.3% growth estimated and versus the 4.6% growth in the previous reporting period. In addition, the Core CPI increased only by 5.1% versus 5.6% growth forecasted, while HPI reported a 1.2% drop compared to the 0.0% growth estimated. Later, the US data should impact the markets. The CB Consumer Confidence represents a high-impact event and is expected at 104.6 points above 102.0 points in the previous reporting period. Moreover, the Existing Home Sales and Current Account data should be released as well. Gold Price Technical Analysis: Strong Upside Pressure Gold price is trapped between the $2,047 and $2,015 in the short-term. Its failure to reach the range resistance triggered buyers’ exhaustion. As indicated in the previous analysis that the XAU/USD could extend its growth if it stays above the lower median line (lml) of the ascending pitchfork. –Are you interested to learn about forex robots? Check our detailed guide- Still, only a new higher high, a valid breakout through the range’s resistance of $2,047 can activate an upside continuation. Coming back to test the lower median line (lml) and the $2,015 could bring us new long opportunities. https://www.forexcrunch.com/blog/2023/12/20/gold-price-turns-soft-after-downbeat-uk-inflation-figures/
2023-12-20 09:59
November’s British inflation data fell well below expectations. Markets fully anticipate a 25 basis point Bank of England rate cut in June 2024. Market participants are now pricing in a 69% chance of the first Fed cut in March. Disappointing November British inflation data led to a bearish GBP/USD forecast on Wednesday. The figures, significantly below expectations, have strengthened the perception that Bank of England rate cuts could be on the horizon, leading to a decline in the currency. –Are you interested to learn more about forex options trading? Check our detailed guide- Notably, British annual consumer price inflation dropped to 3.9% from October’s 4.6%, marking the lowest rate since September 2021. Moreover, this figure fell below all forecasts in a poll of economists, which had anticipated 4.4%. Additionally, core inflation unexpectedly cooled, decreasing to 5.1% from 5.7%. Inflation measures remain above the Bank of England’s 2% target. Therefore, the data supports the argument that it is too early to consider interest rate cuts, particularly with core inflation significantly exceeding levels consistent with the target. Currently, markets fully anticipate a 25 basis point Bank of England rate cut in June 2024. At the same time, there is over a 50% chance of a cut in May. On another front, the US dollar held strong on Wednesday as traders assessed the likelihood of Fed rate cuts. The dollar fell following last week’s Federal Open Market Committee meeting, where policymakers projected three rate cuts for 2024. Furthermore, market participants are now pricing in a 69% chance of the first cut occurring at the Fed’s March meeting, followed by a 63.3% probability of another in May. On Tuesday, Richmond Fed President Thomas Barkin stated that the central bank’s ability to fulfill projections of rate cuts depends on the economy’s performance. GBP/USD key events today US CB Consumer Confidence GBP/USD technical forecast: Bears seize control following lower high On the technical side, GBP/USD has broken below the 30-SMA support line after making a lower high. Bulls initially respected the 30-SMA as support but failed to make a higher high to continue the uptrend. Consequently, the price fell back below the 1.2700 key level. Moreover, the RSI broke below 50 and currently supports solid bearish momentum. –Are you interested to learn more about forex tools? Check our detailed guide- However, to confirm this new direction, bears must break below the previous low to make a lower low. If this happens, the price will likely cross below the 1.2601 key support, allowing bears to target the 1.2501 support level. https://www.forexcrunch.com/blog/2023/12/20/gbp-usd-forecast-pound-dips-after-subpar-november-cpi/
