2024-04-23 09:59
There is a bigger chance of intervention after Japan meets with the US and South Korea. The BoJ is ready to hike rates to support the yen. The yen’s decline is closely tied to the recent shift in the outlook for Fed rate cuts. The USD/JPY outlook leans slightly bearish as the yen responds to stern warnings against its decline. Japanese authorities made clear on Tuesday their readiness to intervene. They signaled a determined stance to halt any further depreciation of their currency. Japan’s finance minister, Shunichi Suzuki, noted a greater likelihood of intervening in the market after the US and South Korea meeting. Notably, the three countries met last week to discuss their currencies’ weakening and find a way forward. At the same time, Bank of Japan governor Kazuo Ueda said on Tuesday that the central bank will be ready to hike interest rates if trend inflation reaches its 2% target. The governor has repeatedly said that a weaker yen increases the cost of living by hiking import prices. Therefore, any further weakness in the currency could trigger an intervention. The last time Japan intervened in the market was in 2022. Markets are again on the edge, expecting an intervention since the yen has weakened to a 34-year low. Moreover, policymakers insist that the recent weakness does not reflect fundamentals in the market. However, the yen’s decline is closely tied to the recent shift in the outlook for Fed rate cuts. Therefore, although an intervention might support the yen, it will likely only be temporary. A more significant reversal in the pair can only come from a sudden shift in the policy outlook in Japan or the US. USD/JPY key events today Flash Manufacturing PMI Flash Services PMI USD/JPY technical outlook: Bulls show signs of fatigue below the 155.02 On the technical side, USD/JPY has reached a new high, slightly below the 155.02 critical level. However, it is clear that bullish momentum has weakened. Notably, the price sticks closer to the 30-SMA, indicating a much shallower move. At the same time, the RSI has made a bearish divergence, signalling weaker bullish momentum. -Are you looking for automated trading? Check our detailed guide- Therefore, there is a chance the trend might soon reverse. Bears must break below the 30-SMA and the bullish trendline to confirm a reversal. If this happens, the price will likely drop to the 153.00 key support level. https://www.forexcrunch.com/blog/2024/04/23/usd-jpy-outlook-intervention-warnings-mildly-lift-yen/
2024-04-22 10:09
On Friday, oil prices temporarily increased after the initial shock that Israel had attacked Iran. Economic data points to more upside potential for the USD/CAD pair. Markets expect the Bank of Canada to cut interest rates before the Fed. With the Canadian dollar extending its rally from last week, the USD/CAD outlook remains bearish despite a dip in oil prices. On Friday, oil prices temporarily increased after an initial shock that Israel had attacked Iran, boosting the loonie. However, the move pulled back significantly after Iran downplayed the attack. Although the USD/CAD pair has pulled back from recent peaks, economic data points to more upside potential. Therefore, the bullish trend could still be intact. Data last week revealed that Canada’s inflation eased more than expected. This put the Bank of Canada’s rate-cut outlook slightly at odds with the Federal Reserve’s. Inflation in the US has remained stubborn, beating forecasts for the past few months. As a result, policymakers have shifted their stance and are ready to keep higher interest rates for longer. Consequently, markets expect the Bank of Canada to cut interest rates before the Fed. This outlook puts the Canadian dollar in a weaker position than the US dollar. The only other thing that can strengthen the loonie is a rise in oil prices. However, at the moment, the tensions between Israel and Iran have gone down. With such calm, oil traders can focus on the demand side. Unfortunately, the outlook for demand, especially in China, remains poor and would weigh on oil prices. USD/CAD key events today Investors will watch developments in the Middle East war as neither the US nor Canada will release major reports today. USD/CAD technical outlook: Price meets support at bullish trendline On the technical side, the USD/CAD price has fallen below the 30-SMA to retest its bullish trendline. Previously, the price had traded in a steep bullish trend above the SMA that paused at the 1.3840 key level. Although sentiment has shifted to bearish, bears can only confirm a reversal if the price breaks below the trendline. Otherwise, it might act as support to push the price to new highs. -Are you looking for automated trading? Check our detailed guide- A break below the trendline and the 1.3700 key support level would allow the price to retest the 1.3550 key support level. On the other hand, if it acts as support, the price will likely break above the 1.3840 resistance level. https://www.forexcrunch.com/blog/2024/04/22/usd-cad-outlook-canadian-dollar-surges-despite-falling-oil/
2024-04-22 08:22
The risk of UK inflation stalling above the central bank’s target has dropped. UK inflation fell to 3.2% in March from 3.4% the previous month. Services inflation in the UK remained relatively high at 6.0% in March. Expectations for the GBP/USD forecast are bearish as the pound continues to decline following last week’s dovish remarks from the Bank of England. At the same time, the recent drop in Fed rate cut delays kept the dollar on the front foot. -Are you looking for automated trading? Check our detailed guide- On Friday, the BoE deputy governor noted that the risk of UK inflation stalling above the central bank’s target had dropped. Moreover, inflation might ease more than the central bank forecasted in February. Notably, these remarks followed the recent release of UK inflation data. According to the report, inflation fell to 3.2% in March from 3.4% the previous month. Although the decline was smaller than expected, policymakers welcomed it. BoE governor Andrew Bailey said that inflation in the country was falling as expected. However, service inflation in the UK remained relatively high at 6.0% in March. This might cause some policymakers to hesitate before calling for rate cuts. Another thing that might hold the Bank of England back is the outlook for Fed rate cuts. Last week, Fed Chair Powell confirmed that the central bank might need to keep a restrictive policy in place for longer. These remarks came after a series of better-than-expected economic reports from the US. Now, markets expect the Fed to start cutting interest rates in the fourth quarter. Consequently, this has led to declining expectations for rate cuts for other major central banks. GBP/USD key events today No high-impact economic reports are coming from the UK or the US today. Therefore, the pair might extend its move from Friday. GBP/USD technical forecast: Weakening below the 1.2400 barrier On the technical side, the GBP/USD price is making new lows after bears broke through the 1.2400 barrier. This decline indicates a continuation of the downtrend. However, as the price makes lower lows, the RSI has remained above its previous low, indicating a bullish divergence. This is a sign that bearish momentum has weakened. Therefore, there is a chance bulls will resurface to reverse the trend. A break above the 30-SMA would allow the price to retest the 1.2550 critical level. However, if bears regain momentum, the decline will continue to the next key support level. https://www.forexcrunch.com/blog/2024/04/22/gbp-usd-forecast-1-23-broken-following-boes-remarks/
2024-04-21 08:42
US retail sales beat forecasts, rising 0.7% in March. Fed officials became more cautious about the timing of rate cuts. Ueda said the BoJ would hike rates if yen weakness leads to high inflation. The USD/JPY weekly forecast charts a bullish course, fueled by positive US data and fading expectations for Fed rate cuts. Ups and downs of USD/JPY The USD/JPY pair had a bullish week characterized by dollar strength. The dollar had another strong week as rate cut expectations fell on upbeat data and hawkish Fed remarks. Notably, US retail sales beat forecasts, rising 0.7% in March. This followed the hot inflation and jobs figures, indicating a robust economy. As a result, Fed officials became more cautious about the timing of rate cuts. Powell avoided giving guidance, noting the high rates might stay longer. -Are you looking for automated trading? Check our detailed guide- Meanwhile, Japanese authorities continued their verbal warnings against the yen’s decline. Ueda even said the BoJ would hike rates if yen weakness leads to higher inflation. Notably, the yen briefly strengthened on Friday due to safe-haven demand amid escalating Middle East tensions. Next week’s key events for USD/JPY Next week, the US will release data on durable goods and economic growth. At the same time, investors will focus on the Bank of Japan monetary policy meeting. The core durable goods orders from the US will show the state of demand in the economy, which impacts the Fed’s rate cut outlook. High demand will keep the Fed cautious about cutting rates too soon. Moreover, the GDP report will show whether the economy has expanded. Given the economy’s resilience, there is a high chance the figures will be positive. Finally, traders eagerly await the BoJ policy meeting after Kazuo Ueda signaled a possible rate hike. USD/JPY weekly technical forecast: Bulls target 156.00 level, channel resistance On the technical side, the USD/JPY price is rising steeply after breaking above the 152.00 key level. The price was caught in a tight consolidation below this level for a long time. However, bullish momentum surged when it finally broke above. At the same time, the price is approaching the resistance line of its bullish channel, where it might reverse. This could mean retesting the 156.00 critical resistance level. However, the RSI is in overbought territory, indicating near-maximum bullish momentum. If bulls get exhausted soon, the price might reverse, break below the 22-SMA and target the channel’s support line. https://www.forexcrunch.com/blog/2024/04/21/usd-jpy-weekly-forecast-dollar-bid-amid-hawkish-fed/
2024-04-20 10:42
The AUD/USD weekly forecast is overshadowed by strong US retail sales data and deteriorating risk sentiment. Poor employment data from Australia and Middle East tensions weakened the Aussie. Australia will release its CPI report next week. The AUD/USD weekly forecast unveils a bearish trend due to the dual forces of dollar resilience and escalating geopolitical tensions. Ups and downs of AUD/USD The Aussie ended the week with a bearish candle amid economic data from the US and Australia. When the week began, the US released higher-than-expected retail sales data, which indicated robust consumer spending in the economy. As a result, rate-cut bets fell, and the dollar rose. Moreover, Powell’s speech on Tuesday confirmed that the Fed would hold higher interest rates for longer to tackle inflation. -Are you looking for automated trading? Check our detailed guide- Meanwhile, poor employment data from Australia and Middle East tensions weakened the Aussie. Australians lost jobs in March, indicating a slowing labor market. Next week’s key events for AUD/USD Australia will release its CPI report next week, while the US will release durable goods orders and GDP data. The CPI report will play a significant role in shaping the outlook for RBA rate cuts. At the moment, there is a 65% chance that the RBA will cut rates in December. Therefore, if the report shows further easing in inflation, bets for the December cut might increase. Meanwhile, the RBA might cut rates next year if inflation remains stubborn. The Fed’s rate cut outlook might change with next week’s data. Higher-than-expected durable goods orders and economic growth would lead to a decline in rate-cut expectations. The opposite is also true. AUD/USD Weekly technical forecast: Bears eye 0.6851 support after range breakout On the daily chart, the AUD/USD price is declining after breaking out of consolidation. Initially, the price started a steep downtrend at the 0.6625 key level. However, it paused and moved sideways below the 0.6300 key resistance level. Moreover, it respected a support trendline and bounced higher every time it retested the level. At the same time, the price kept breaking through the 22-SMA, showing a lack of direction. However, bears have confirmed the continuation of the previous downtrend with a break below the support trendline. Additionally, the price has fallen well below the 30-SMA and the RSI far below 50, indicating strong bearish momentum. This move might continue next week, with bears targeting the 0.6851 key support level. https://www.forexcrunch.com/blog/2024/04/20/aud-usd-weekly-forecast-geopolitics-take-toll-on-aussie/
2024-04-19 08:46
XAU/USD is bullish despite temporary drops. A new lower low activates a corrective phase. Escaping from the up channel pattern announced exhausted buyers. The gold price pared gains after reaching today’s high of $2,417. The metal is trading at $2,381 at the time of writing. Despite the temporary correction, the bias is still bullish in the medium to long term. -Are you looking for the best AI Trading Brokers? Check our detailed guide- After its strong upward movement, minor drops may occur due to profit-taking. Yesterday, the US reported mixed economic data. The Unemployment Claims remained at 212K in the last week, even if the traders expected a potential growth to 215K. At the same time, the Philly Fed Manufacturing Index came in at 15.5 points versus 1.5 points in the previous reporting period. On the other hand, the Existing Home Sales and CB Leading Index report poor data. Today, the yellow metal rallied on geopolitical tensions in the Middle East. However, the XAU/USD seems overbought in the short term, posing a risk of downside correction. Fundamentally, the MPC members, Breeden, Rasmsden, and Mann speeches could bring some action later today. Right now, Gold is fighting hard to rebound and recover after the last sell-off because UK retail sales rose by 0.0%, less than the estimated 0.3% growth and 0.1% growth in the previous reporting period. As you can see on the hourly chart, the XAU/USD extended its growth within an ascending channel, reaching a new all-time high of $2,431. Now, it has escaped from this pattern, signaling buyers’ exhaustion. -Are you looking for the best MT5 Brokers? Check our detailed guide- However, the prices returned higher, and the broken uptrend line was tested. It has found resistance at the weekly R1 of 2,416. The false breakouts with great separation through this static resistance and above the uptrend line reveal an overbought situation. It’s trapped between R1 (2,416) and the pivot point $2,359. Escaping from this range could bring us new opportunities. If it closes below the pivot point, a corrective phase could be activated after making a new lower low. However, a larger correction will be confirmed only after taking out the 2,318 downside obstacle. https://www.forexcrunch.com/blog/2024/04/19/gold-price-retreats-as-tensions-ease-following-israel-attack/
