2023-07-07 07:14
The dollar made slight gains following the release of the FOMC minutes. The majority of policymakers anticipate further tightening of US monetary policy. The Canadian dollar declined to its lowest level against the US dollar in nearly three weeks. Today’s USD/CAD forecast is bullish. On Thursday, the dollar made slight gains following the release of the minutes from the US Federal Reserve’s recent policy meeting. These minutes strengthened the belief in an upcoming interest rate hike this month. Notably, the minutes revealed that most policymakers anticipate further tightening of US monetary policy. This is despite their decision to maintain interest rates at the previous meeting. As a result, the dollar experienced a slight increase in value, accompanied by higher Treasury yields. In contrast, stocks declined as market expectations grew that the Federal Reserve would resume its rate-hike campaign this month. Furthermore, it might maintain higher rates for an extended period to combat inflation. The CME FedWatch tool indicates that markets are currently pricing in an 89% probability of a 25 basis point rate increase in July. On Wednesday, the Canadian dollar declined to its lowest level against the US dollar in nearly three weeks. This was caused by a shift towards more cautious investor sentiment, which prompted the purchase of the US dollar based on technical factors. George Davis, the chief technical strategist at RBC Capital Markets, stated that the weakened US equity markets created a risk-off environment. Consequently, it led to broader gains for the US dollar. Finally, the price of oil, a significant export for Canada, narrowed the price difference with the global benchmark Brent. This occurred as a response to the supply cuts announced by Saudi Arabia and Russia on Monday. USD/CAD Key Events Today Several important economic releases from the US today might cause a lot of volatility for USD/CAD. Investors will get details on employment and business activity in the services and non-manufacturing sectors. USD/CAD Technical Forecast: Bulls Set Sights On 1.3350. USD/CAD 4-hour chart On the charts, USD/CAD has finally broken above the 1.3275 resistance level after a long period of consolidation. Consequently, the price has risen farther above the 30-SMA, strengthening the bullish bias. At the same time, the RSI has gotten closer to the overbought region, indicating strong bullish momentum. Now that the price is above 1.3275, nothing stops it from reaching 1.3350 resistance. https://www.forexcrunch.com/usd-cad-forecast-fed-minutes-boost-rate-hike-expectations/
2023-07-07 07:13
Retail sales in the Eurozone remained stable in May. Most Fed officials anticipated the eventual need for tightening monetary policy. Traders in futures linked to the Fed policy rate anticipate a rate hike in July. Today’s EUR/USD outlook is slightly bullish. The euro rose after data revealed that retail sales in the Eurozone remained stable in May. Increased expenditure on non-food items balanced out the declines observed in food and automotive fuel sales. Retail sales volumes in the 20 euro-sharing nations remained unchanged compared to April. However, they showed a 2.9% decrease compared to last year’s period. The sluggish consumption is due to declining real incomes. Notably, households allocate much of their earnings towards costly energy, credit, and mortgage repayments. This has led to a reduction in demand for other goods. Meanwhile, the June meeting minutes revealed that the US Federal Reserve, acting in unison, decided to maintain the current interest rates. While most participants anticipated the eventual need for tightening monetary policy, they agreed to uphold the current rates. Following the release of the minutes, the market experienced minimal changes. Moreover, traders in futures linked to the Fed policy rate continued to anticipate a rate hike in July. They estimated a one-in-three probability of another increase by the year’s end. Simultaneously, policymakers grappled with data indicating a persistently tight job market and modest improvements in inflation. Niels Christensen, the chief analyst at Nordea, commented that there were no significant surprises. Markets already expect the Fed’s July rate hike, which is positive for the dollar. EUR/USD Key Events Today Investors expect a slew of key economic reports from the US that will shed light on the labor market and services sector. These reports include the ADP nonfarm employment change, initial jobless claims, JOLTs job openings, and services PMI. EUR/USD Technical Outlook: Price Retests The Strong 1.0851 Support. EUR/USD 4-hour chart The bias for the EUR/USD on the charts is bearish. The price trades below the 30-SMA, showing bears are in control. Additionally, bearish momentum is strong as the RSI trades below 50. However, the downward move has paused at the 1.0851 support level. This has happened twice before, and the price bounced higher each time. Therefore, bulls might push the price above the 30-SMA and the 1.0900 resistance level. However, if bears are stronger this time, they might break below 1.0851 and retest the 1.0800 support. https://www.forexcrunch.com/eur-usd-outlook-eurozone-retail-sales-hold-steady-in-may/
2023-07-07 07:12
The XAU/USD could return higher if it stays above the weekly pivot point. The US data should bring sharp movements today. After its strong growth, a temporary retreat was natural. The gold price experienced a strong rejection after reaching yesterday’s high at $1,935. The metal is trading at $1,924 at the time of writing. Gold turned to the downside ahead of last night’s FOMC Meeting Minutes. The US Factory Orders reported a 0.3% growth versus 0.7% growth in the previous reporting period, while Wards’ Total Vehicle Sales were reported at 15.7M, beating the 15.3M forecasted. Today, the US is to release high-impact data, so the fundamentals should drive the rate. The ADP Non-Farm Employment Change could be reported at 226K versus 278K in the previous reporting period. Furthermore, the Unemployment Claims could jump to 247K the previous week. ISM Services PMI is expected to increase from 50.3 points to 51.3 points, while JOLTS Job Openings may drop from 10.10M to 9.93M. Poor US data could help the yellow metal to develop a new bullish movement. The US will release the Non-Farm Employment Change, Unemployment Rate, and Average Hourly Earnings tomorrow. The economic figures should bring high action and sharp movements. Gold price technical analysis: Strong support at $1,915 Gold price hourly chart The XAU/USD escaped from the up channel indicating exhausted buyers. The price found support on the weekly pivot point of $1,915, and it tries to push higher. As long as it stays above this level, the yellow metal could develop a new bullish movement. The median line (ML) of the descending pitchfork represents dynamic support. Escaping from the major Falling Wedge triggered a higher potential swing. After its strong growth, a minor retreat or accumulation was probable. The price could retest the near-term support levels before jumping higher. https://www.forexcrunch.com/gold-price-sees-dead-cat-bounce-ahead-of-us-adp-data/
2023-06-28 09:59
The bias is bearish, so a further drop is expected. A new lower low activates more declines. The S1 is seen as a potential target. The gold price extended its sell-off, trading at $1,908 at the time of writing. The downside pressure is high and the XAU/USD could approach new lows. Fundamentally, Canada reported lower inflation in the last month compared to the previous reporting period, while the US data came in better than expected in the last trading session. That’s why the XAU/USD crashed. The Canadian CPI registered a 0.4% growth, matching expectations, while Core CPI reported only a 0.4% growth versus the 0.5% growth forecasted. Furthermore, the US CB Consumer Confidence, New Home Sales, Richmond Manufacturing Index, HPI, S&P/CS Composite-20 HPI, Durable Goods Orders, and Core Durable Goods Orders indicators reported positive data. Today, the Australian Consumer Price Index reported a 5.6% growth versus the 6.1% growth estimated and the 6.8% growth in the previous reporting period. Later, BOE Gov Bailey Speaks, BOJ Gov Ueda Speaks, and Fed Chair Powell Speaks should really shake the markets and could change the sentiment in the short term. Tomorrow, the US Final GDP and Unemployment Claims could move the price. Gold price technical analysis: 1,910 support violated Gold price hourly chart Technically, the XAU/USD escaped from the small triangle signaling more declines. The bias remains bearish as long as it stays below the median line (ml) of the descending pitchfork. The false breakouts above the triangle’s resistance announced strong sellers. Now, it has reached the $1,910 downside obstacle, which stands as downside obstacle. Taking out this support should open the door for more declines. The next downside target could be represented by the weekly S1 (1,901). A valid breakdown should activate a larger downside movement through this obstacle. https://www.forexcrunch.com/gold-price-continues-downside-after-lower-canadian-inflation/
2023-06-28 09:58
Canada’s annual inflation rate decreased to 3.4% from April’s 4.4%. Money markets perceive a roughly 60% likelihood of a BOC rate hike in July. Oil fell amid demand worries as the ECB plans more rate hikes. Today’s USD/CAD price analysis is bullish. The Canadian dollar lost strength against the US dollar following data that revealed a slowdown in Canada’s inflation. Notably, inflation reached its lowest rate in two years. Canada’s annual inflation rate decreased to 3.4% in May from April’s 4.4%. After considering the data, money markets now perceive a roughly 60% likelihood of a rate hike during the Bank of Canada’s upcoming policy decision on July 12. This is a slight decrease from the previous 64%. Earlier this month, the central bank implemented its first tightening since January. Surprisingly, it raised its policy rate by 25 basis points to a 22-year high of 4.75%. Moreover, the Canadian currency’s decline coincided with a 2.4% drop in the price of oil, one of Canada’s key exports. This decrease was influenced by signals suggesting that the European Central Bank has further interest rate hikes planned. Elsewhere, data indicated an increase in US consumer confidence in June to its highest level in almost 1.5 years. At the same time, business spending remained steady in May, indicating a robust economic foundation. The recent influx of data reinforced the belief in the resilience of the US economy and alleviated concerns about a potential recession. However, it also suggested that the Federal Reserve may need to continue raising interest rates. USD/CAD Key Events Today Investors will be watching Powell’s speech at the European Central Bank Forum. The Fed Chair might drop some clues on future rate hikes. Furthermore, there will be a crude oil inventories report from the US that might impact the loonie. USD/CAD Technical Price Analysis: Bulls Are In The Lead After A Break Above 1.3200. USD/CAD 4-hour chart USD/CAD has experienced a shift in sentiment in the 4-hour chart. Bulls have taken control by breaking above the 30-SMA resistance. At the same time, bullish momentum has strengthened, with the RSI crossing over 50. Furthermore, the price has broken above the 1.3200 resistance level, a sign of strength in the bullish move. With this new bias, the price will likely start seeking higher highs. Therefore, we might see a retest of the 1.3301 resistance. https://www.forexcrunch.com/usd-cad-price-analysis-eased-cad-cpi-lowers-boc-hike-bets/
2023-06-28 09:57
Australia experienced a slowdown in consumer inflation in May. There is a lower chance of a June RBA rate hike. The RBA has increased interest rates by 400 basis points to 4.1% since May last year. Today’s AUD/USD forecast is bearish. Australia experienced a slowdown in consumer inflation in May, reaching a 13-month low. A significant decline primarily influenced fuel prices. Furthermore, this deceleration in inflation, coupled with a cooling of core inflation, indicates that there may not be a need for further interest rate hikes in July. According to data on Wednesday, the monthly consumer price index rose by 5.6% in the year leading up to May. This marked the smallest growth since April of the previous year. This figure is notably lower than the previous month’s 6.8% and falls well below market expectations of 6.1%. Consequently, market sentiments adjusted to reflect a reduced rate hike probability in July, now estimated at 30%. Moreover, there is speculation that interest rates are more likely to peak at 4.35% instead of the previously anticipated 4.6%. Notably, the Reserve Bank of Australia had increased interest rates by 400 basis points to 4.1% since May of the previous year. However, the potential upward risks to inflation have prompted the central bank to adopt a cautious approach in recent months, indicating the possibility of further rate increases. Despite these circumstances, some factors go against a pause in rate hikes next week. One closely monitored measure of prices, excluding volatile elements and holiday travel, only experienced a slight slowdown from 6.5% to 6.4%. AUD/USD Key Events Today Federal Reserve Chair Jerome Powell is set to speak at an ECB forum later in the day. Investors will watch this speech as it might contain hints on future monetary policy moves. AUD/USD Technical Forecast: New Lows Strengthening The Bearish Bias. AUD/USD 4-hour chart AUD/USD has hit new lows in the downtrend in the 4-hour chart. This has strengthened the bearish bias as the RSI has moved closer to the oversold region. At the same time, the price has gone farther below the 30-SMA, showing bears are in charge. Bears have broken below the 0.6650 support level, which paves the way for a retest of the 0.6600 support level. The bearish bias will stay strong if the price stays below the 30-SMA. https://www.forexcrunch.com/aud-usd-forecast-australian-inflation-hits-13-month-lows/
