2024-06-11 11:57
Investors have shifted their focus to the upcoming consumer inflation numbers. Economists are expecting softer US inflation figures this month. Japan’s service sector sentiment fell in May. The USD/JPY price analysis shows strong bullish sentiment as the dollar strengthens ahead of crucial inflation data. Investors are also gearing up for the Fed policy meeting, where there will be clues on the outlook for interest rate cuts. Meanwhile, the yen remained vulnerable as data revealed poor consumption in Japan due to the weak currency. After Friday’s blockbuster US jobs report, investors have shifted their focus to the upcoming consumer inflation numbers. However, the mood ahead of these figures shows that the Fed might delay cuts to November, given the strength of the US labor market. Therefore, the CPI report will either reinforce this view or revive bets for a cut in September. Economists are expecting softer figures this month after inflation fell the previous month. However, the report may surprise. Policymakers will then conclude their policy meeting, during which they will likely hold rates. Traders will look for clues on the future path of policy, which will be guided by the inflation figures. On the other hand, the yen remained fragile after Friday’s decline amid a rally in US Treasury yields. Moreover, data on Monday revealed that Japan’s service sector sentiment fell in May as the weak yen increased the cost of living. This indicates that consumption is fragile, complicating the outlook for BoJ rate hikes. However, a separate report revealed that Japan’s economy contracted at a milder rate than previously reported, relieving the BoJ. Japan’s GDP declined by 1.8% compared to estimates of a 2.0% decline. Still, the weak yen continues to cloud the economy’s outlook. USD/JPY key events today Neither Japan nor the US will release high-impact reports. As a result, the pair might consolidate. USD/JPY technical price analysis: Bulls approaching 157.50 On the technical side, the USD/JPY price is approaching the 157.50 resistance level after finding support near the 155.00 level. Moreover, it has made a series of higher highs and lows that confirm a bullish trend. Bullish momentum recently surged, allowing the price to break above the 30-SMA and the RSI above 50. Given the solid bullish bias, the price might soon break above 157.50 to make a new high and retest its bullish channel resistance. https://www.forexcrunch.com/blog/2024/06/11/usd-jpy-price-analysis-bulls-cheer-as-us-inflation-data-looms/
2024-06-11 08:33
The dollar remained strong after the recent surge in Treasury yields. All eyes are on the Consumer Price Index report and the Fed meeting. Data from Australia on Tuesday revealed weaker business conditions in May. The AUD/USD outlook points south as the dollar holds firm ahead of US consumer inflation data and the FOMC policy meeting. Meanwhile, the Australian dollar was frail after data revealed weaker business conditions in May. The dollar remained strong after the recent surge in Treasury yields due to better-than-expected job numbers. The US employment report on Friday renewed doubts about a slowdown in the US economy that would allow the Fed to start cutting rates. All eyes are now on the Consumer Price Index report and the Fed meeting for more clues on when the Fed might start lowering interest rates. Inflation forecasts show the headline figure easing to 0.1% from 0.3% the previous month. The inflation report will determine the tone policymakers will adopt at the FOMC meeting. A higher number will reduce policymakers’ confidence that inflation will reach the 2% target, leading to a hawkish stance. On the other hand, a slower inflation rate could allow policymakers to adopt a more dovish stance. Meanwhile, data from Australia on Tuesday revealed weaker business conditions in May as profits and sales growth declined. However, there were signs that cost pressures were accelerating, creating a mixed picture for the RBA. Nonetheless, investors are only fully pricing in the first RBA rate cut in July next year. AUD/USD key events today There are no key events scheduled for today from Australia or the US. Therefore, investors will keep speculating ahead of the US inflation report. AUD/USD technical outlook: Bears intensify within bearish channel On the technical side, the AUD/USD price is trading well below the 30-SMA, with the RSI in bearish territory below 50. Therefore, the bias is bearish. At the same time, the price trades within a bearish channel, respecting the solid support and resistance. The recent decline hit the 0.6580 support level, where the price paused, and bulls took over. However, the bullish move seems a lot weaker than the decline. Therefore, there is a chance it will pause at the 30-SMA, where bears will resume control. If this happens, the price will likely take out the 0.6580 support for a new low. https://www.forexcrunch.com/blog/2024/06/11/aud-usd-outlook-dollar-steadies-ahead-of-cpi-fomc/
2024-06-10 10:53
There was political tension after French President Emmanuel Macron called for a snap election. The euro suffered as the dollar rallied after Friday’s nonfarm payrolls report. Markets scaled back expectations for Fed rate cuts in 2024 from 50 to 35 basis points. The EUR/USD outlook remains bearish as the euro hovers near a one-month low, weighed down by political uncertainty. Compounding the euro’s woes, the currency has weakened further against a robust dollar, which surged following an upbeat employment report. There was political tension after French President Emmanuel Macron called for a snap election. This came after the European parliamentary elections, where the right-wing parties took most of the seats. This left major powers like Germany and France in a weak position, making it more challenging to drive policy in the bloc. Furthermore, the euro suffered as the dollar rallied after Friday’s nonfarm payrolls report. US employers hired more people than expected in May, raising doubts about a slowdown in the labor market. 272,000 more jobs were created in the US last month, well above expectations for 185,000. This was a confirmation that labor market resilience remained. The previous report had raised expectations that the Fed would cut rates as it showed a massive miss in job growth. However, in May, the economy returned to creating many jobs that drive price increases. As a result, markets scaled back expectations for rate cuts in 2024 from 50 to 35 basis points. At the same time, the chances of a cut in September fell from 70% to 50%. EUR/USD key events today Investors do not expect key events today. Consequently, they will keep absorbing recent economic and political developments in the US and the Eurozone. EUR/USD technical outlook: Bears confirm new direction with a gap below 1.0800 On the technical side, the EUR/USD price has confirmed a new direction after breaking out of consolidation. The previous bullish trend paused, and the price started trading sideways, with support at 1.0800 and resistance at 1.0900. Throughout this consolidation period, the price chopped through the 30-SMA while the RSI kept breaking the pivotal 50 mark. Moreover, the RSI made a slight bearish divergence with the price, showing weaker bullish momentum. This allowed bears to take control with solid momentum, leading to a gap below the 1.0800 support level. Bears are now targeting the 1.0725 support level. https://www.forexcrunch.com/blog/2024/06/10/eur-usd-outlook-breaks-1-08-amid-political-uncertainty/
2024-06-10 08:41
The US added more jobs in May than economists had forecast. The US unemployment rate rose from 3.9% to 4.0%. The total Fed cuts expected this year fell from 50 to 35 basis points. The USD/CAD forecast looks promisingly bullish as the dollar surges following Friday’s unexpectedly strong jobs report. The US nonfarm payrolls overshadowed Canada’s increase in employment and weighed on the Canadian dollar. Data on Friday showed that the US added more jobs in May than economists had forecast. Employment rose 272,000 compared to expectations of an 185,000 increase. Consequently, the labor market remains robust despite high interest rates. The Fed will likely push back the timing for the first cut as it awaits more evidence of a slowdown in the economy. However, there were some signs of weakness in the sector, as seen in the unemployment rate, which rose from 3.9% to 4.0%. Still, it was not enough to keep rate cut expectations from falling. Before the report, there was nearly a 70% chance that the Fed would cut rates in September. However, this dropped to 50% when market participants realized that demand in the labor market remained relatively high. Moreover, the total cuts expected this year fell from 50 to 35 basis points. At the same time, Canada released its monthly employment report, which showed a marginal increase in employment, beating forecasts. Meanwhile, the unemployment rate increased from 6.1% to 6.2% in April. The result was a decline in the likelihood of a Bank of Canada rate cut in July from 50% to 44%. However, the rising US dollar overshadowed any strength in the Canadian dollar. USD/CAD key events today There won’t be any high-impact releases from the US or Canada today. As a result, the price will likely consolidate. USD/CAD technical forecast: Bulls eye 1.3780 after channel breakout On the technical side, the USD/CAD price has made a bold, bullish move and broken out of its shallow bearish channel. Initially, bulls attempted to break out of the channel resistance but failed, making a large wick. The price then pulled back to retest the 30-SMA support, which held firm. The pair made another strong surge from here that breached the channel resistance and the 1.3720 level. The bulls are now eyeing the 1.3780 level. Here, the rally might pause for a break before continuing higher or retesting the 30-SMA. https://www.forexcrunch.com/blog/2024/06/10/usd-cad-forecast-robust-nfp-report-sends-dollar-higher/
2024-06-09 09:11
US job vacancies dropped, and private firms employed fewer people in May. The US services sector remained robust despite high borrowing costs. The nonfarm payrolls showed stronger-than-expected performance in the labor market. The AUD/USD weekly forecast is bearish as an upbeat US employment report raises uncertainty about the outlook for Fed rate cuts. Ups and downs of AUD/USD The AUD/USD pair had a bearish week as the dollar ended strong due to upbeat employment data. However, Aussie was on the front foot when the week started due to increased Fed rate cut expectations. Most of the reports this week indicated a slowdown in the US economy. Business activity in the manufacturing sector fell, job vacancies dropped, and private firms employed fewer people in May. However, the services sector remained robust despite high borrowing costs. In Australia, GDP data revealed a smaller-than-expected growth but had little impact on rate cut expectations. The primary catalyst came at the end of the week when the nonfarm payrolls showed stronger-than-expected performance in the labor market. This led to a rally in the dollar as rate-cut bets fell. Next week’s key events for AUD/USD Next week, investors will focus on US inflation data and the FOMC policy meeting. Meanwhile, Australia will release its employment figures, impacting the outlook for RBA rate cuts. The last CPI report showed easing inflation in the US, which gave policymakers and traders confidence that the downtrend is intact. However, it has been up and down since then, with some reports showing continued economic strength. Another downbeat report would boost expectations for Fed rate cuts in the US. However, if inflation remains stubborn, policymakers will maintain a hawkish tone at the FOMC meeting. This would mean a decline in rate-cut bets that would strengthen the dollar against the Aussie. AUD/USD weekly technical forecast: Market turns bearish with price below 22-SMA On the technical side, the AUD/USD price has broken below the 22-SMA, confirming a bearish sentiment shift. This move comes after bulls retested and failed to break above the 0.6700 resistance level. Moreover, this sentiment shift can be seen in the RSI, which has crossed below 50 into bearish territory. As a result, the price will likely retest the 0.6501 support level. If bears are ready to start a new downtrend, the decline will continue below the 0.6401 support level to make lower highs and lows. https://www.forexcrunch.com/blog/2024/06/09/aud-usd-weekly-forecast-bears-takeover-focus-on-us-cpi/
2024-06-08 10:11
The NFP report showed bigger-than-expected job growth in May. Traders scaled back rate cut expectations, leading to a rally in the dollar. Economists expect the headline CPI to hold steady at 3.4%. The USD/JPY weekly forecast shows renewed bullish momentum as the US labor market’s resilience clouds the outlook for Fed rate cuts. Ups and downs of USD/JPY USD/JPY closed well above its lows as the dollar rallied after better-than-expected economic data. This week, the yen was mainly at the mercy of the dollar, as Japan had no high-impact events. Meanwhile, the US released several reports at the start of the week that gave the impression that the economy was deteriorating amid high borrowing costs. Consequently, investors raised the chances of a Fed rate cut in September to 69%. However, this reversed on Friday when the NFP report showed bigger-than-expected job growth. The US added 272,000 jobs in May, well above expectations of 182,000. As a result, traders scaled back rate cut expectations, leading to a rally in the dollar. Next week’s key events for USD/JPY Next week will be packed with high-impact economic events from the US and Japan, which will likely cause a lot of volatility. The US will release consumer and wholesale inflation data, shaping the Fed’s rate-cut outlook. Economists expect the headline CPI to hold steady at 3.4%. A higher number would indicate persistent inflation and lower the chances of a rate cut in September. On the other hand, a lower number would strengthen the case for a rate cut. Moreover, investors will focus on the FOMC policy meeting for clues on whether policymakers are gaining confidence in the fight against inflation. The messaging during and after the meeting will carry much weight, especially after the CPI report. Meanwhile, the Bank of Japan will also hold its policy meeting, which will likely keep rates unchanged. USD/JPY weekly technical forecast: Price rebounds after solid support trendline On the technical side, the USD/JPY price is bouncing higher after retesting a solid support trendline. Moreover, it is on the verge of breaking back above the 22-SMA to confirm a bullish sentiment shift. Meanwhile, the RSI trades slightly above 50, supporting bullish momentum. Therefore, in the coming week, bulls will likely challenge the 158.01 key resistance level. A break above this level would confirm a continuation of the bullish trend, allowing the price to go beyond the 160.00 level to 162.51. https://www.forexcrunch.com/blog/2024/06/08/usd-jpy-weekly-forecast-fed-rate-cut-offset-by-strong-nfp/
