2023-07-12 06:58
The currency pair could extend its sell-off after taking out the near-term support levels. The fundamentals should move the price tomorrow. After its massive drop, a rebound could be natural. The USD/JPY price crashed quickly as the week started. The sellers seem determined to hit new lows. The price is at 140.22, far below Friday’s high of 145.07. The Japanese Yen took full control as the Yen Futures rallied. On the other hand, the US dollar depreciated versus all its rivals. The greenback lost significant ground versus its rivals as the NFP came in worse than expected on Friday. Surprisingly or not, the JPY appreciated even though the Economy Watchers Sentiment, Current Account, and Bank Lending came in worse than expected. Today, Japan reported mixed data, while the US NFIB Small Business Index reported positive data. Tomorrow, Japan is to release the PPI and Core Machinery Orders. The US inflation figures represent the most important event. The US Consumer Price Index is expected to report a 0.3% versus 0.1% growth in the previous reporting period, while Core CPI could register a 0.3% growth. In addition, the BOC could also have a big impact on the USD. USD/JPY Price Technical Analysis: Massive Drop USD/JPY price hourly chart The USD/JPY pair failed to reach the median line (ML) of the ascending pitchfork. Now it has turned to the downside. The pair has ignored the 23.6% (141.45) and the lower median line (LML). These represented major downside obstacles, so a larger drop is natural. It has reached the weekly S2 (140.16), which stands as static support. The 38.2% (139.19) retracement level represents a major downside target. Technically, we have a strong demand zone around the 139.00 psychological level. Still, after this massive sell-off, we cannot exclude a temporary rebound, as the price may try to retest the resistance levels before extending its sell-off. https://www.forexcrunch.com/usd-jpy-price-faces-retracement-ahead-of-us-inflation-data/
2023-07-12 06:57
The dollar hovered near a two-month low on Tuesday. Investors await US inflation data, which could influence the Fed’s decision to end rate hikes sooner. German inflation experienced an increase in June, breaking the trend of a steady decline. Today’s EUR/USD price analysis is bullish. On Tuesday, the dollar hovered near a two-month low as the market anticipated the US inflation report. This report could influence the Federal Reserve’s decision to end rate hikes sooner. Furthermore, investors will assess whether price pressures continue to decrease, offering insights into the future interest rate outlook. On Monday, investors analyzed Federal Reserve officials’ remarks emphasizing the need for additional rate hikes due to persistent inflation. However, they also said the central bank was nearing the end of its current cycle of tightening monetary policy. Notably, economists surveyed by Reuters predicted a 3.1% rise in the headline inflation for June, following a 4% increase in May. This would indicate the lowest reading since March 2021. Moreover, the core rate, expected to decline for the third consecutive month to 5% from 5.3%, still exceeds the Fed’s 2% target by more than double. Despite last week’s employment report revealing fewer-than-expected additions to non-farm payrolls, it had minimal impact on rate expectations. Elsewhere, German inflation rose in June, breaking the trend of steady decline observed since the beginning of the year. On Tuesday, the federal statistics office confirmed that German consumer prices rose by 6.8% year-on-year in June. This rebound in year-on-year inflation during the second quarter can be primarily attributed to base effects. These include the fuel discount implemented last year and a temporary reduction in rail fares. EUR/USD Key Events Today All focus is on the US inflation report coming tomorrow, as no key events from the US or the Eurozone are coming out today. EUR/USD Technical Price Analysis: Uptrend Pauses To Retest 1.1001, Targets 1.1040. EUR/USD 4-hour chart EUR/USD has made new highs above the 1.1001 key level, making strides in the new bullish trend. Moreover, it trades far above the 30-SMA, indicating a steep move. Additionally, the RSI points to stronger bullish momentum near the overbought region. The price is currently retesting the recently breached 1.1001 key level. From here, we might see bulls return to push the price to the next resistance at 1.1040. https://www.forexcrunch.com/eur-usd-price-analysis-dollar-on-back-foot-after-fed-comments/
2023-07-12 06:56
The pound surged to its highest level in 15 months against the dollar. British wages, excluding bonuses, rose 7.3% in the three months leading up to May. Fed officials suggested that the US central bank is approaching the conclusion of its hiking cycle. Today’s GBP/USD outlook is bullish. On Tuesday, the pound surged to its highest level in 15 months against the dollar following data that revealed stronger-than-expected wage growth. This increased pressure on the Bank of England (BoE) to raise interest rates. Notably, the Office for National Statistics said on Tuesday that British wages, excluding bonuses, experienced a 7.3% increase in the three months leading up to May compared to the previous year. This surpassed the 7.1% rise predicted by economists surveyed by Reuters. However, there were indications of a slight loosening in the labor market. The unemployment rate unexpectedly rose from 3.8% to 4.0% in the three months until April. Furthermore, job vacancies declined, reaching their lowest level since mid-2021. The BoE closely monitors wage growth as it evaluates the inflationary pressure remaining in the British economy. The central bank has implemented 13 consecutive interest rate increases thus far. Moreover, Governor Andrew Bailey stated on Monday that both wage increases and company prices were rising too rapidly. Additionally, he emphasized his commitment to combating the inflation rate, which stands at 8.7%—higher than in any other major developed economy. Meanwhile, the dollar fell as investors evaluated statements from Federal Reserve officials. They expressed support for two additional rate hikes while suggesting that the US central bank is approaching the conclusion of its hiking cycle. GBP/USD Key Events Today Investors are not awaiting any key events from the UK or the US. Therefore, all focus will be on the upcoming US inflation report. GBP/USD Technical Outlook: Bulls Confirm Their Dominance With A New High. GBP/USD 4-hour chart GBP/USD has made a new high on the 4-hour chart after breaking above the 1.2850 resistance level. The bulls returned after a pullback that retested the 1.2750 support level. They made an engulfing candle that kept the price above the 30-SMA, confirming the bullish bias. Furthermore, the RSI respected the pivotal 50-level as support before rising toward the overbought region. With such strong momentum, bulls will likely soon break above the 1.2900 key resistance. https://www.forexcrunch.com/gbp-usd-outlook-hits-15-month-top-as-uk-wage-growth-jumps/
2023-07-11 03:40
The US reported the smallest increase in job gains in two-and-a-half years. Investors expect a 5% annual increase in core US inflation for June. China’s factory-gate prices experienced the sharpest decline in seven-and-a-half years in June. Today’s AUD/USD forecast is bearish. On Monday, the dollar rebounded from its initial decline. Consequently, it recovered from an immediate reaction to data indicating the smallest increase in US job gains in two-and-a-half years. Meanwhile, disappointing inflation figures in China put pressure on the Australian dollar. Notably, the US employment report revealed that nonfarm payrolls only increased by 209,000 in June. This figure fell short of market expectations for the first time in 15 months. However, a closer look at the employment report indicated ongoing robust wage growth, indicating a tight labor market. The focus now shifts to US inflation data scheduled for release on Wednesday, with expectations of a 5% annual increase in core CPI for June. Elsewhere, data released on Monday revealed that China’s factory-gate prices experienced the sharpest decline in seven-and-a-half years in June. Meanwhile, consumer inflation reached its lowest point since 2021. This fueled hopes for additional support measures from Chinese authorities. China’s post-pandemic recovery, which initially showed strong progress in the first quarter, has now experienced a slowdown. The weak data negatively impacted the Australian and New Zealand dollars, often used as proxies for the Chinese yuan. OCBC currency strategist Christopher Wong stated, “The softer CPI is still reflecting weak domestic demand while PPI deflation underscores the strains on factories.” Therefore, there is a need for stimulus support in China. AUD/USD Key Events Today Today will be a quiet session for AUD/USD as no key economic report will come from Australia or the US. Therefore, investors will likely keep digesting the US jobs report. AUD/USD Technical Forecast: Bears Set Sights On Range Support As The Price Consolidates. AUD/USD 4-hour chart AUD/USD has fallen below the 30-SMA after a recent surge to the 0.6700 resistance level. The market has no clear direction as the price oscillates between the 0.6600 support and the 0.6700 resistance. At the moment, bears are in the lead as the price trades below the SMA while the RSI has gone slightly below 50. Therefore, the price will soon retest the range support at 0.6600. A break below this level would finally give direction to this market. Otherwise, it will bounce higher and continue oscillating. https://www.forexcrunch.com/aud-usd-forecast-aussie-dips-on-weak-chinese-inflation/
2023-07-11 03:38
US nonfarm payrolls report revealed an increase of 209,000 jobs in June. Previously anticipated Fed rate cuts in 2023 now appear unlikely. Speculators hold a significant short position in the yen, valued at $9.793 billion. Today’s USD/JPY outlook is bearish. The yen extended gains on Monday after surging on Friday amid dollar weakness. On Friday, the dollar experienced a decline following the release of the US nonfarm payrolls report. Notably, the report revealed an increase of 209,000 jobs in June. This figure fell short of market expectations for the first time in 15 months. However, it also highlighted persistent strong wage growth, reinforcing market expectations for an upcoming rate hike this month. Furthermore, it reassured the markets that the Fed’s rate hikes program may end soon. Still, previously anticipated rate cuts in 2023 now appear unlikely. Meanwhile, the yen surged due to concerns over the 10-year Treasury yield surpassing 4%. The pair is particularly sensitive to US yields, which declined after the release of the jobs data. As a result, the yen strengthened against the US currency, reaching a two-week high. The increase in the 10-year Treasury yield above 4% raised market concerns about potential intervention by Japan in currency markets. Elsewhere, weekly data from the US regulator showed that speculators currently maintain a significant short position in the yen, valued at $9.793 billion. This represents the largest short position since May 2022 and has nearly doubled in size within the past three months alone. With a market focus on central bank policies, particularly the US Federal Reserve, attention now shifts to the upcoming US inflation data. USD/JPY Key Events Today Investors do not expect any key economic releases today that might significantly impact USD/JPY. Therefore, the pair might extend Friday’s losses. USD/JPY Technical Outlook: Significant Bearish Momentum Points To A New Direction. USD/JPY 4-hour chart On the charts, USD/JPY recovered slightly after collapsing to the 142.01 support level. However, the rebound failed to surpass the 143.00 resistance level as bears returned to continue the collapse. The bearish bias is strong as the price is currently well below the 30-SMA. Furthermore, bearish momentum has recently increased, with the RSI getting oversold for the first time in a while. Therefore, bears are strong, and they will likely look to break below the 142.01 support level. They might soon retest the 141.25 support. https://www.forexcrunch.com/usd-jpy-outlook-yen-extends-gains-after-treasury-yields-soar/
2023-07-11 03:37
XAU/USD failed to remove the resistance levels signaling a new sell-off. A new lower low activates more declines. A valid breakout through the median line (ml) indicates an upside continuation. The gold price slumped after reaching $1,934, Friday’s high. The metal is trading at $1,921, above today’s low of $1,912. However, it seems to be struggling as the US dollar pulled out of lows. DXY’s larger rebound should force the XAU/USD to hit new lows. Fundamentally, gold jumped higher after the US data dump on Friday. However, it has failed to confirm a meaningful recovery. The US reported mixed data in the last session. The NFP figures came in at 209K in June versus 224K expected, and compared to 306K in May, Average Hourly Earnings rose by 0.4%, beating the 0.3% growth, while the Unemployment Rate dropped to 3.6% as expected. Today, the US will release the Final Wholesale Inventories indicator, which is expected to report a 0.1% drop. The Chinese and Japanese economic data came in worse than expected. Later, the BOE Gov Bailey Speaks could have an impact. The UK Claimant Count Change, Average Hourly Earnings, Unemployment Rate, Eurozone ZEW Economic Sentiment, and German ZEW Economic Sentiment could move the price tomorrow. Still, the US inflation figures, RBNZ, and BOC could shake the price on Wednesday. These represent the most important events of the current week. Gold price technical analysis: Sellers’ dominance Gold price hourly chart Technically, the gold price is fighting hard to rebound and recover after today’s massive drop. As you can see on the hourly chart, the XAU/USD found strong resistance right above $1,931 and above the median line (ml) of the ascending pitchfork. The metal has registered false breakouts again, signaling exhausted buyers and strong downside pressure. The price came back below the downtrend line. However, it remains to see if it stabilizes below it. Staying above the broken downtrend line could announce a new potential rally. On the other hand, stabilizing under this line should signal more declines. The lower median line (LML) and the weekly S1 (1,907) represent critical downside obstacles. A valid breakdown through these support levels activates a larger drop. On the contrary, a new higher high and a valid breakout above the median line (ml) can bring new longs and open the door for larger growth. https://www.forexcrunch.com/gold-price-upside-invalidated-after-rejection-us-cpi-in-focus/
