2023-12-20 08:37
Data revealed that Canada’s inflation held steady in November. The likelihood of a BoC cut next month fell to 16.0% from 21.4%. Raphael Bostic restated on Tuesday that he anticipated two Fed rate cuts in the latter half of the year. Wednesday’s USD/CAD price analysis revealed a bearish sentiment as investors adjusted their expectations, stepping back from expecting interest rate cuts by the Bank of Canada in the upcoming months. This expectation shift came after domestic data revealed that Canada’s inflation held steady in November. –Are you interested to learn more about forex options trading? Check our detailed guide- Meanwhile, analysts anticipated a decline to 2.9%. Therefore, they were surprised as Canada’s annual inflation rate was 3.1%. Moreover, the core inflation measures, CPI-median and CPI-trim, maintained their levels at 3.4% and 3.5%, respectively. As a result, money markets now indicate a reduced 40% chance of the BoC easing in March, down from the previous 50% before the data release. At the same time, the likelihood of a cut next month dropped to 16.0% from 21.4%. Despite these adjustments, markets still anticipate the central bank to start easing, possibly in April. Additionally, contributing to the rise in the Canadian dollar was the 1.3% increase in the price of oil due to worries about supply disruptions. Meanwhile, the US dollar maintained its stability on Wednesday as traders assessed the likelihood of the US Federal Reserve starting interest rate cuts. Raphael Bostic, the president of the Atlanta Federal Reserve, restated on Tuesday that he anticipated two rate cuts in the latter half of the year. However, he emphasized that there is currently no “urgency” for such actions. USD/CAD key events today The US CB Consumer Confidence report USD/CAD technical price analysis: New low signals exhaustion in the market On the charts, USD/CAD has made a new low below the 1.3301 level, showing the downtrend has progressed. The price is far below the 30-SMA, further supporting bears. However, although the RSI is below 50, showing solid bearish momentum, it has made a bullish divergence. This means that the new low is weaker, and bears are exhausted. –Are you interested to learn more about forex tools? Check our detailed guide- Therefore, bulls might get a chance to retrace the recent decline. Still, since the pullback might come amid a downtrend, it will likely pause at the 30-SMA resistance. The trend can only reverse if bulls are strong enough to break above the SMA. https://www.forexcrunch.com/blog/2023/12/20/usd-cad-price-analysis-investors-reevaluate-boc-rate-cuts/
2023-12-19 13:53
The correction ended above the median line (ml). The upper median line (uml) stands as a major target. The Canadian CPI should bring some action later today. The GBP/USD price edged higher in the short term after reaching yesterday’s low of 1.2628. Now, the pair is trading at 1.2713 at the time of writing. It looks probable to hit new highs as the US dollar is overbought for now. –Are you interested to learn more about forex options trading? Check our detailed guide- Fundamentally, the British pound received a helping hand from the UK CBI Industrial Order Expectations indicator, which came in at -23 points versus -28 points expected and was far above -35 points in the previous reporting period. Later, the US will release the Building Permits and the Housing Starts data. The indicators are expected to report worse data than the previous reporting period. Still, the most important event is the US inflation data. The Consumer Price Index could reveal a 0.1% drop versus the 0.1% growth in the previous reporting period. Tomorrow, the United Kingdom inflation figures could shake the price. The CPI may announce a 4.3% growth versus the 4.6% growth in the previous reporting period, while Core CPI could announce a 5.6% growth in November, less than the 5.7% in October. Also, the US publishes the CB Consumer Confidence as a high-impact event. From a technical point of view, the GBP/USD price was in a short-term corrective phase. It was about to hit the descending pitchfork’s median line (ml), representing a major dynamic support and target. –Are you interested to learn more about forex tools? Check our detailed guide- Coming back above the weekly pivot point of 1.2660 shows sellers’ exhaustion. Now, it is targeting the 1.2748 level (support turned into resistance). Also, the upper median line (uml) represents a major dynamic resistance. So, it remains to see how it reacts around these obstacles. False breakouts may announce a new sell-off. https://www.forexcrunch.com/blog/2023/12/19/gbp-usd-price-recovers-above-1-27-eyes-on-uk-inflation/
2023-12-19 12:03
The Bank of Japan maintained its ultra-loose monetary policy on Tuesday. Some investors were waiting for indications of a potential shift away from negative interest rates. Some Fed officials are pushing back against market expectations of an imminent rate cut. The USD/JPY price analysis turned bullish on Tuesday after the Bank of Japan upheld its ultra-loose monetary policy at the end of a two-day meeting. Moreover, the central bank retained its forward guidance, keeping its dovish stance. –Are you interested to learn more about forex options trading? Check our detailed guide- Consequently, the yen dropped over 0.6% against the US dollar after the decision. Notably, this outcome aligned with market expectations. However, some investors were waiting for indications of a potential shift away from negative interest rates by the dovish central bank. SMBC’s Chief FX Strategist, Hirofumi Suzuki, remarked that there were pre-meeting expectations for policy changes, including modifications in the statement’s wording. Moreover, he noted that the likelihood of a sustained weakening trend in the yen is low. This is due to ongoing expectations for a policy revision between January and March next year. Meanwhile, the BoJ said it was ready to implement additional easing measures if necessary, citing extremely high economic uncertainty. Elsewhere, the US dollar remained largely unchanged at 102.53. Some Fed officials are pushing back against market expectations of an imminent rate cut by the Fed. However, such comments have had minimal impact on market pricing and have not stopped the dollar’s decline. Chicago Fed President Austan Goolsbee emphasized on Monday that the Fed is not pre-committing to an imminent rate cut. Moreover, the surge in market expectations is inconsistent with the usual functioning of the US central bank. USD/JPY key events today Traders will keep absorbing the outcome of the BoJ policy meeting as there won’t be any more major events. USD/JPY technical price analysis: Bullish sentiment emerges as price clears 30-SMA hurdle On the technical side, sentiment has shifted from bearish to bullish as USD/JPY has broken above the 30-SMA. Additionally, the shift can be seen in the RSI, which has crossed well above the pivotal 50 mark. –Are you interested to learn more about forex tools? Check our detailed guide- Notably, the reversal comes after a bullish divergence in the RSI. Sellers weakened when the price reached the 142.02 support level, allowing buyers to push the price above the SMA. However, buyers must break above the resistance trendline for the downtrend to confirm a trend reversal. Moreover, they must make a higher high above the 146.03 key resistance level. Otherwise, sellers might return. https://www.forexcrunch.com/blog/2023/12/19/usd-jpy-price-analysis-boj-maintains-policy-yen-plummets/
2023-12-19 08:39
The Canadian dollar strengthened after the Fed signaled looming rate cuts. Economists predict a slowdown in Canada’s inflation to an annual rate of 2.9%. Oil rose due to attacks by the Iran-aligned Yemeni Houthi militant group on ships in the Red Sea. Tuesday’s USD/CAD outlook was bearish as the resilient Canadian dollar took the spotlight, outshining the declining dollar. The dollar weakened due to expectations of potential rate cuts by the US Federal Reserve in the coming year. Meanwhile, the Canadian dollar got support from rising oil prices. –Are you interested to learn more about forex options trading? Check our detailed guide- On Monday, the Canadian dollar dipped slightly against the US dollar. However, it held near its four-month peak, supported by rising oil prices and anticipation of domestic inflation data. On Friday, the loonie reached its highest level since August 4th at 1.3347. The rise resulted from the Federal Reserve’s signaling of potential interest rate cuts in the coming year, which weighed on the US dollar. Meanwhile, economists predict a slowdown in Canada’s inflation to an annual rate of 2.9% in November from October’s 3.1%. Notably, a higher inflation figure could lead the Bank of Canada to maintain current interest rates for an extended period, further strengthening the Canadian dollar. Despite growing optimism about reaching its 2% inflation target, the Canadian central bank has kept the door open for additional tightening. Elsewhere, oil, a significant Canadian export, saw a 1.5% increase, settling at $72.47 per barrel. This rise was attributed to attacks by the Iran-aligned Yemeni Houthi militant group on ships in the Red Sea, disrupting maritime trade and raising supply costs. USD/CAD key events today Canada’s CPI m/m Canada’s median CPI y/y Canada’s trimmed CPI y/y USD/CAD technical outlook: Bearish momentum weakens in the oversold region On the charts, USD/CAD is recovering after pausing its steep decline at the 1.3350 key support level. However, the bearish bias is still strong because the 30-SMA is above the price and is facing down. At the same time, the RSI is below 50, supporting a bearish trend. –Are you interested to learn more about forex tools? Check our detailed guide- Nevertheless, there is a chance the bullish move will continue higher. The RSI has made a small bullish divergence in the oversold region. Therefore, bears are exhausted, allowing bulls to retrace the recent move. However, the rebound will likely pause at the resistance zone consisting of the 30-SMA and the 0.382 fib retracement level. https://www.forexcrunch.com/blog/2023/12/19/usd-cad-outlook-dollar-weakens-amid-fed-rate-cut-bets/
2023-12-18 13:48
XAU/USD retreated after registering only false breakouts through the immediate resistance levels. The lower median line (LML) stands as a major support. The Canadian CPI could change the sentiment tomorrow. The gold price turned to the downside as the US dollar struggled to resume its current swing higher. The metal is trading at $2,022 at the time of writing. It has changed little today, so we must wait for fresh opportunities. –Are you interested to learn more about forex options trading? Check our detailed guide- The price dropped even though the US reported mixed economic data on Friday. Flash Services PMI came in better than expected, confirming further expansion. Meanwhile, Flash Manufacturing PMI, Capacity Utilization Rate, Industrial Production, and Empire State Manufacturing Index came in worse than expected. Today, only the US NAHB Housing Market Index and the New Zealand Trade Balance could bring some action. Still, the traders for tomorrow’s economic data and high-impact events before taking action. The Australian Monetary Policy Meeting Minutes and the BOJ could shake the markets in the morning. The BoJ Policy Rate is expected to remain steady at -0.10%. Furthermore, the Canadian inflation data could change the sentiment in the short term. The Consumer Price Index is expected to report a 0.2% drop after the 0.1% growth in the previous reporting period. Also, the US will release the Building Permits and the Housing Starts data. As you can see on the hourly chart, the price found resistance right above the $2,041 static resistance and beyond the 50% Fibonacci line of the ascending pitchfork. The false breakouts revealed buyers’ exhaustion, and the price turned to the downside, escaping from the range between $2,047 and $2,027. –Are you interested to learn more about forex tools? Check our detailed guide- Now, it has retested the broken range’s support and it could resume its downside movement. The weekly pivot point of $2,013 stands as the immediate downside obstacle. The major support is represented by the lower median line (lml). Technically, the retreat could be temporary after the last rally. It could test the near-term support levels before developing a new leg higher. As long as it stays above the lower median line (LML), the XAU/USD could give birth to a larger leg higher. https://www.forexcrunch.com/blog/2023/12/18/gold-price-aiming-for-2000-as-selling-intensifies/
2023-12-18 10:10
Fed’s Williams challenged the market consensus for rate cuts. Britain’s services sector experienced increased growth this month. On Thursday, the Bank of England affirmed its stance on keeping interest rates high. The GBP/USD outlook takes a subtly bearish turn on Monday. The pair is retracing its steps from recent peaks due to comments by Federal Reserve Bank of New York President John Williams. On Friday, Williams challenged the market consensus for rate cuts, emphasizing that the Fed wasn’t currently deliberating on them and deeming speculation premature. –Are you interested to learn more about forex options trading? Check our detailed guide- However, there is still bullish support for the currency. Notably, data on Friday revealed that Britain’s services sector experienced increased growth this month. The PMI showed that the business activity gauge climbed to 52.7 from 50.9 in the services sector, marking its highest reading since June. This is only the second time since July that the index exceeded the 50.0 growth threshold. Therefore, the economy, for the time being at least, can steer clear of a recession. Moreover, this came a day after the Bank of England affirmed its stance on keeping interest rates high. On Thursday, the Bank of England kept borrowing costs unchanged, emphasizing the need to keep rates elevated to mitigate risks from persistently high inflation. However, financial markets are pricing in rate cuts for the coming year. Economists pointed out that the data supported the Bank of England’s decision not to discuss reducing borrowing costs. GBP/USD key events today The currency might end up moving sideways today as no key events are coming from the UK or the US today. GBP/USD technical outlook: Price takes a step back from recent highs The price is pulling back on the charts after making new highs above the 1.2700 key level. Initially, the bullish trend paused around the 1.2700 key level, allowing bears to reverse the trend. –Are you interested to learn more about forex tools? Check our detailed guide- Although the price traded below the 30-SMA, the move was shallow, meaning bears were not much stronger than bulls. Moreover, the RSI never got oversold. The weak downtrend stopped at the 1.2501 key support level, where bulls took charge with a bullish engulfing candle that broke above the 30-SMA. The Bulls have made a strong move that has extended to the 1.272 key fib level. Moreover, this level has acted as strong resistance, leading to a pullback. However, the uptrend will likely soon resume, given the strong bullish bias. https://www.forexcrunch.com/blog/2023/12/18/gbp-usd-outlook-williams-challenges-fed-rate-cut-expectations/
