2023-10-26 08:43
The Australian dollar reached a roughly two-week high after Australia’s inflation report. There is a 66% probability of a quarter-point increase to 4.35%. Business activity in the US improved significantly. After an unexpectedly robust inflation report, the AUD/USD price analysis took a bullish turn. The Australian dollar strengthened due to expectations of interest rate hikes. It surged to 0.7%, reaching a roughly two-week high of $0.6400 on Wednesday. Notably, Australia’s consumer price index increased by 1.2% in the third quarter. It surpassed the market expectations of 1.1% and was up from a 0.8% rise in the previous quarter. Consequently, traders began seeing higher chances of a potential interest rate hike by the RBA following four rate pauses next month. Futures markets are now placing a 66% probability of a quarter-point increase to 4.35%, up from 35% before the data release. Meanwhile, two major Australian banks, the Commonwealth Bank of Australia and ANZ, shifted their stance on Wednesday. They abandoned their previous view of a rate pause. Both now anticipate a quarter-point hike in November. Such a move would position the RBA as one of the few central banks in the developed world still pursuing a tightening policy. Meanwhile, markets believe the US Federal Reserve and the European Central Bank have completed their rate hikes. Elsewhere, business activity in the US improved significantly. S&P Global reported on Tuesday that its flash US Composite Purchasing Managers Index reached its highest level since July. This development might give the US Federal Reserve more flexibility to maintain elevated interest rates. AUD/USD key events today Investors are expecting several important reports from the US, including: The building permits report. The new home sales report. A speech from Fed Chair Jerome Powell. AUD/USD technical price analysis: Bulls’ key to uptrend lies at 0.6400. AUD/USD 4-hour chart On the charts, Aussie is bullish as the price shot up from the 0.6350 support level to the 0.6400 resistance. A strong move occurred above the 30-SMA, showing that the bulls are in control. Additionally, there is support from the RSI, which trades in bullish territory. However, on a larger scale, the price has been stuck in a sideways move, chopping through the SMA. Therefore, this may continue if bears take over at 0.6400 resistance. For the price to start trending up, bulls must break above the 0.6400 resistance. https://www.forexcrunch.com/aud-usd-price-analysis-surprising-inflation-bolsters-aussie/
2023-10-26 08:43
There is anticipation ahead of a Bank of Canada policy decision. US economic data revealed an increase in business output in October. Canadian new home prices fell by 0.2% in September. Wednesday’s USD/CAD forecast shines with optimism as the Canadian dollar continues its collapse against the US dollar. This decline comes amid a growing interest rate advantage for the US dollar, fueled by improved US economic data. Moreover, there is anticipation ahead of a Bank of Canada policy decision. Aaron Hurd from State Street Global Advisors noted, “We are a little bit frozen going into the BoC meeting. However, since July, there has been a consistent weakening trend for the CAD against the US dollar.” Furthermore, he said, “I think the US will maintain that rate advantage for at least the next several quarters over Canada. The US economy is not showing the slowing we’ve seen in the Canadian economy.” On Tuesday, US economic data revealed an increase in business output in October. Manufacturing emerged from a five-month decline, boosting the US dollar against a basket of major currencies. Meanwhile, the spread between Canada’s 2-year yield and its US equivalent widened to 36.8 basis points, the widest gap since April 28. The Canadian yield fell further by 2.3 basis points. Additionally, Canadian new home prices fell by 0.2% in September compared to August and were down 1% annually, according to Statistics Canada. USD/CAD key events today It is a big day for USD/CAD as investors will watch the Bank of Canada policy meeting. Moreover, there will be key reports from the US, including: Building permits. New home sales. Crude oil inventories. A speech from Fed Chair Powell. USD/CAD technical forecast: Bulls secure their position above 1.3701. USD/CAD 4-hour chart The USD/CAD pair has finally made a new high on the 4-hour chart. This move signals a continuation of the bullish trend and strengthens the bullish bias. Moreover, bulls have now found their footing above the 1.3701 key level. The first time the price broke above this level, it struggled to continue higher. Consequently, there was consolidation around the level until the price found support at 30-SMA. At the moment, bulls are making stronger candles above the 1.3701 level. Therefore, the uptrend will likely soon reach the 1.3800 resistance level. https://www.forexcrunch.com/usd-cad-forecast-bulls-picking-up-amid-rate-differential/
2023-10-26 08:42
The bias remains bearish despite the last rebound. The BOC could have a big impact on the USD today. Taking out the pivot point activates further drop. The EUR/USD price pared gains on Wednesday, continuing yesterday’s momentum. The pair is trading at 1.0575 versus yesterday’s high of 1.0694. The dollar’s dominance forces risky assets to depreciate. The price maintains a bearish bias despite temporary rebounds. Fundamentally, the greenback took the lead after the United States Flash Manufacturing PMI and Flash Services PMI confirmed expansion yesterday. On the other hand, the Eurozone, German, and French services and manufacturing sectors remained deep in contraction territory. Today, the German ifo Business Climate came in at 86.9 points, versus 85.9 points expected and compared to 85.8 points in the previous reporting period. In addition, the M3 Money Supply reported better than expected data, while Private Loans disappointed. Later, the BOC is seen as a high-impact event that could really shake the markets. The overnight rate is expected to remain at 5.00%. Still, the BOC Press Conference could bring sharp movements. Furthermore, Fed Chair Powell Speaks, ECB President Lagarde Speaks, and US New Home Sales should have an impact on the greenback. EUR/USD Price Technical Analysis: Rebound Ended EUR/USD price hourly chart From the technical point of view, the EUR/USD pair found resistance at the confluence area formed at the intersection between the lower median line (LML) of the ascending pitchfork with the R2 (1.0680). Now, it has dropped below the warning line (WL), which represents dynamic support. Staying on this obstacle announced an imminent breakdown. It challenges the weekly pivot point of 1.0570. Taking out this downside obstacle announces more declines. The 1.0600 psychological level represents a supply zone. Retesting it may result in a new sell-off. https://www.forexcrunch.com/eur-usd-price-corrects-further-as-greenback-leads-the-market/
2023-10-26 08:41
The Japanese yen surpassed 150 per dollar. Japanese Finance Minister Shunichi Suzuki cautioned traders against selling the yen. The yen has depreciated by over 20% since the Fed initiated rapid rate hikes. Thursday’s USD/JPY forecast points to bullish sentiments as the greenback stands tall, lingering near a two-week peak, powered by the surge in Treasury yields. Simultaneously, the Japanese yen surpassed 150 per dollar, leaving traders apprehensive about potential intervention. Notably, the Japanese yen hit a new one-year low of 150.48 per dollar. The level is not far from the 32-year low of 151.94 per dollar recorded in October last year, which prompted Japanese authorities to intervene in the currency market. On Thursday, Japanese Finance Minister Shunichi Suzuki cautioned traders against selling the yen again. Additionally, he emphasized that authorities were closely monitoring market movements. He stated, “I’m closely observing market developments with a sense of urgency.” However, he did not directly comment on the possibility of intervention. Meanwhile, the interest rate gap between Japan and the United States has widened, leading to continuous yen weakness. Furthermore, the yen has depreciated by over 20% since the US Federal Reserve initiated rapid rate hikes in March 2022 to combat inflation. Meanwhile, the Bank of Japan remains an outlier among central banks, adhering to its ultra-loose monetary policy. Carol Kong from the Commonwealth Bank of Australia highlighted that US GDP data is a significant event for the dollar/yen exchange rate. A robust report may exert upward pressure on US yields and lead to the yen testing new lows. USD/JPY key events today Traders are expecting major releases from the US, including: Core durable goods orders. Gross Domestic Product. Initial jobless claims. Pending home sales. USD/JPY technical forecast: 150.00 resistance broken USD/JPY 4-hour chart The USD/JPY price has finally punctured the 150.00 key resistance level in a sharp, bullish move. The price was trading between the 149.50 support and the 150.00 resistance levels for a long time. However, it stayed mostly above the 30-SMA, a sign that bulls held control. One false breakout below the SMA led to a resurgence in bullish momentum that saw the RSI push to the overbought region. Moreover, the price broke above the 150.00 and 150.51 resistance levels. Bulls look set to take out higher resistance levels as the price pushes farther above the 30-SMA. https://www.forexcrunch.com/usd-jpy-forecast-marks-fresh-2-week-high-amid-rising-yields/
2023-10-05 10:10
US private payrolls rose significantly less than expected in September. Longer-term US Treasury yields fell following the US employment report. Data from the Bank of Japan’s money market showed that Japan did not intervene in the FX market. Thursday’s USD/JPY forecast is bearish as the yen found much-needed relief as the dollar weakened in response to mixed US economic data. The data caused investors to dial back their expectations of the Fed raising interest rates again this year. The greenback relinquished some of its recent gains after Wednesday’s ADP National Employment Report revealed that US private payrolls had increased significantly less than anticipated in September. However, analysts cautioned that more evidence was required to determine the speed at which the labor market was cooling. Moreover, following the release of this data, longer-term US Treasury yields, which had reached 16-year highs, eased and remained lower. Moh Siong Sim, a currency strategist at Bank of Singapore, noted, “There are some indications that the US labor market is cooling down further,” However, he emphasized that it was still too early to draw definitive conclusions. Furthermore, he highlighted the significance of closely monitoring Friday’s non-farm payrolls report. Additionally, he noted, “The bigger picture is that overall US growth has been slowing. However, it’s been slowing at a pace slower than expected.” Dollar/yen, a currency pair sensitive to US yields, was last seen trading around 148.53, reflecting a decrease of approximately 0.4%. Notably, the yen had reached 150.165 on Tuesday, its weakest level since October 2022. Speculation had arisen earlier that Japanese authorities might have intervened to support the yen’s sharp recovery after it breached the 150-line. However, data from the Bank of Japan’s money market indicated on Wednesday that Japan had likely not intervened. USD/JPY key events today Investors will receive one major report from the US. The initial jobless claims report. USD/JPY technical forecast: Price revisits 148.51 support level. USD/JPY 4-hour chart On the technical side, the USD/JPY price has retested the 148.51 support level, where bulls have resurfaced. Still, bears are now in control as the price has settled below the 30-SMA and the RSI below 50. Therefore, the pause at the 148.51 level might only be temporary. As long as the price stays below the 30-SMA, bears will keep control, likely breaking below 148.51. A break below this level would clear the path for a drop to the 147.51 support. https://www.forexcrunch.com/usd-jpy-forecast-yen-finds-relief-as-dollar-weakens/
2023-10-05 10:09
Mixed economic data pointed to pockets of weakness within the world’s largest economy. US factory orders showed a 1.2% increase in August, surpassing the anticipated 0.2% rise. The Eurozone reported a much steeper decline in retail sales than expected for August. On Thursday, the EUR/USD outlook was bullish as the euro rose with the dollar’s decline in response to the retreating US Treasury yields. The decline reflected mixed economic data that pointed to pockets of weakness within the world’s largest economy. Consequently, it reduced the likelihood of the Federal Reserve implementing another interest rate hike before the end of the year. On Wednesday, the dollar index, which gauges the greenback’s performance against six major currencies, registered a 0.3% drop to 106.69, relinquishing some of its recent gains. This decrease followed disappointing US private payroll data from the ADP National Employment Report. Nevertheless, the index remained close to its nearly 11-month high of 107.34, achieved in the previous session. However, the dollar managed to recover partially from its losses when US factory orders showed a 1.2% increase in August, surpassing the anticipated 0.2% rise. Meanwhile, the euro gained, although it remained relatively close to its Tuesday low of $1.0448, which marked its weakest level since December. This decline in the euro sparked discussions of a potential further drop to $1. Still, the euro rose on Thursday despite the Eurozone reporting a much steeper decline in retail sales than expected for August. Moreover, there is a higher likelihood of the bloc’s economy contracting in the previous quarter. EUR/USD key events today Although the Eurozone will not release any major reports today, the US will release one important one. The initial jobless claims report. Get FREE Forex Signals Now! EUR/USD technical outlook: Bulls challenge prevailing bearish bias. EUR/USD 4-hour chart On the charts, the EUR/USD price trades at a pivotal level slightly below the 30-SMA. At the same time, the RSI trades near the pivotal 50 line, separating bullish from bearish territory. Therefore, although the bias is down, bulls are challenging the downtrend. Currently, the price is trading in a tight consolidation between the 30-SMA resistance and the 1.0500 support level. A breakout above the resistance would signal a bullish takeover, allowing the price to retest the 1.0600 resistance. On the other hand, a breakout below the support level would see bears retesting the 1.0450 support level. https://www.forexcrunch.com/eur-usd-outlook-soft-treasury-yields-weigh-on-the-dollar/
