2023-06-27 09:48

The Japanese yen weakened beyond 143 yen against the dollar. Monetary policy divergence between Japan and the US keeps growing. Japan will consider all available options to respond to excessive currency movements. Today’s USD/JPY forecast is bullish. The Japanese yen weakened beyond 143 yen against the dollar, reaching a seven-month low. There has been renewed selling pressure on the Japanese currency, often considered a safe-haven asset. Consequently, it poses a threat of increased import costs that could negatively impact consumers. Notably, the divergence in monetary policies between the Bank of Japan and the US Federal Reserve is seen as a driving force behind the strengthening of the dollar. While Japan continues implementing easing measures, the Fed has adopted an aggressive tightening policy. Elsewhere, Masato Kanda, Japan’s top currency diplomat, stated that Japan would consider all available options to appropriately respond to excessive currency movements. Furthermore, he intensified warnings against the yen’s recent rapid and one-sided weakening. While speaking to reporters, the vice finance minister for international affairs emphasized the importance of currencies moving in a stable manner. Moreover, they should reflect their underlying fundamentals. In October, Japan conducted a rare intervention by buying the yen to curb its weakening. The currency had reached a 32-year low of nearly 152 yen against the dollar. When asked about the possibility of currency intervention, Kanda said he would not disregard any options. Investors have been selling yen following the BOJ’s decision to maintain ultra-low interest rates on June 16. Furthermore, the BOJ committed to sustaining significant stimulus. in contrast, other central banks are tightening monetary policy to address rising inflation. USD/JPY Key Events Today Investors will not get any key economic releases from Japan or the US today. Therefore, the pair will likely consolidate. USD/JPY Technical Forecast: Bullish Trend Eyes The Next Resistance At 144.00. USD/JPY 4-hour chart On the 4-hour chart, USD/JPY is on a strong bullish trend, breaking above resistance levels and making new highs. The price has also stayed above the 30-SMA for a long time, respecting it as support. Additionally, the RSI has not gone below 50 in all that time, supporting bullish momentum. With a strong bullish candle, the price broke above the 143.00 resistance and is currently retracing the move. However, bears have not shown any strength. This will likely allow bulls to retest and take out the 144.00 resistance. https://www.forexcrunch.com/usd-jpy-forecast-yen-hits-7-month-low-as-trend-intensifies/

2023-06-27 09:47

The ECB will likely continue raising interest rates even as the economy slows. The ECB raised interest rates to their highest level in 22 years. ECB’s Kazaks pushed back against market speculations about ECB rate cuts. Today’s EUR/USD outlook is bullish. On Tuesday, ECB policymaker Martins Kazaks stated that the European Central Bank would likely continue raising interest rates even as the economy slows down, citing persistently high inflation. Notably, economic surveys for the Eurozone and Germany have shown weakness. This is due to increased borrowing costs and China’s underwhelming economic performance after the relaxation of COVID restrictions. Still, Kazaks, the Latvian central bank governor, expressed his belief that the Eurozone economy would experience a slowdown or stagnation rather than a contraction. According to him, this should not deter the ECB from its efforts to combat high inflation. Earlier this month, the ECB raised interest rates to their highest level in 22 years. Furthermore, it indicated that another rate hike in July, the ninth consecutive one, was almost certain. This is because inflation is expected to remain above the 2% target until 2025. Kazaks joined a growing faction of policy hawks who anticipate the upcoming rate hike in July will not be the final one. Additionally, he argued that the risks associated with taking insufficient action outweighed the risks of being too aggressive. Moreover, Kazaks pushed back against market speculations about rate cuts by the ECB in the first half of next year. He emphasized that the first rate cut would occur “much later” than the market anticipated. EUR/USD Key Events Today Investors are awaiting several major economic releases from the US. These include building permits, core durable goods orders, CB consumer confidence, and new home sales. These releases will show the state of the US economy. EUR/USD Technical Outlook: Bulls Fight To Resume The Bullish Trend. EUR/USD 4-hour chart On the charts, the EUR/USD is on the brink of a break above the 30-SMA. This comes after the price bounced off the 1.0851 support level and broke above the 1.0900 resistance level. Additionally, the price is currently at a pivotal level, where the bias could go either way. Therefore, if bulls break above the SMA and the RSI is above 50, the bias will turn bullish, allowing the price to retest 1.1000. However, if the price respects the 30-SMA as resistance, the bearish bias will continue with a break below the 1.0851 support. https://www.forexcrunch.com/eur-usd-outlook-more-hawkish-ecb-remarks-support-the-euro/

2023-06-23 04:02

The bias remains bearish as long as it stays below the upper median line (uml). The BOE should bring sharp movements. The median line (ml) represents a major target. The gold price is trading at $1,926 at the time of writing, with a solid bearish trend. The bias remains bearish, so more declines are highly probable. Greenback’s corrective upside forced the gold to slip from yesterday’s gains. Last day, the United Kingdom reported higher inflation. The CPI came in at 8.7% versus 8.4% estimated, while Core CPI reported a 7.1% growth, exceeding the 6.8% growth forecasted. Gold turned to the downside again as Fed Chair Powell announced potential new hikes till the end of the year. Today, the Swiss National Bank increased the SNB Policy Rate from 1.50% to 1.75%, as expected, so the price of gold could slip lower. Further hikes are expected, so XAU/USD could hit new lows in the short term after this announcement. Later, the Bank of England delivered a 50-bps hike. The Official Bank Rate increased to 5.00% from 4.50%. The MPC members voted by a majority of 7 to 2 for this decision. Furthermore, the Unemployment Claims could drop from 262K to 261K in the previous reporting period. The current account is expected at -214B. Existing Home Sales may drop to 4.25M from 4.28M. At the same time, the CB Leading Index could report a 0.8% drop. Poor US data should weaken the USD and could lift the XAU/USD. On the contrary, better-than-expected US data should push the yellow metal toward new lows. Gold price technical analysis: Bears keeping charge Gold price hourly chart Technically, the price of gold retested the 50% ($1,935) retracement level, and now it has turned to the downside. Now, it has retested the weekly pivot point of $1,931, signaling more declines. The bias is bearish as long as it stays below the upper median line (uml). Testing this dynamic resistance and registering false breakouts may announce a new sell-off. As long as it stays within the pitchfork’s body, the rate could approach and reach the median line (ml). https://www.forexcrunch.com/gold-price-slips-below-1930-despite-dollar-weakness/

2023-06-23 03:59

Fed Chair Powell adhered to his customary messaging during his testimony. The BoE will likely raise interest rates for the 13th consecutive time on Thursday. British inflation persisted in May, holding steady at 8.7%. Today’s GBP/USD forecast is bullish. On Thursday, the dollar remained close to a one-month low against various currencies. Fed Chair Jerome Powell adhered to his customary messaging during his semi-annual testimony, leaving little room for surprises. Notably, Powell stated that if the economy continues on its current trajectory, it is “a pretty good guess” that the Fed will pursue further rate hikes. These remarks align with the central bank’s statements from its recent policy meeting. On the other hand, the pound hovered near a one-year high, ahead of the Bank of England’s interest rate decision later in the day. The recent inflation report showed higher-than-expected figures and will likely keep policymakers alert. Consequently, the BoE will likely raise interest rates for the 13th consecutive time on Thursday. However, traders hold differing views regarding the magnitude of the hike. While some lean towards a 25-basis-point increase, others consider a 50-basis-point hike. Notably, British inflation persisted in May and did not ease, holding steady at 8.7%. It defied market expectations and surpassed the inflation rates of other major economies. Economists at ANZ stated that the robust UK inflation figure had heightened the likelihood of a rate hike larger than 25 basis points. Furthermore, it raised the potential for a higher terminal rate and a prolonged period of elevated rates. GBP/USD Key Events Today Investors have a big day ahead as they await the Bank of England monetary policy meeting. A hawkish tone could see GBP/USD rise. Additionally, they will continue listening to Fed Chair Jerome Powell’s testimony to Congress. GBP/USD Technical Forecast: Capped By The 30-SMA As Resistance GBP/USD 4-hour chart After breaking below the 30-SMA on the 4-hour chart, GBP/USD has risen to retest the SMA. It is now looking to resume the bearish move and retest the 1.2700 support level. With the price below the 30-SMA and the RSI slightly under 50, the bias for GBP/USD is slightly bearish. Bears must break below 1.2700 and start making lower lows and highs to strengthen the bias. However, if they fail to do this, the price will likely resume the uptrend by breaking above the 30-SMA and the 1.2800 resistance. https://www.forexcrunch.com/gbp-usd-forecast-gaining-back-to-1-28-ahead-of-boe-meeting/

2023-06-23 03:54

ECB policymakers expressed concerns about the persistent inflation in the Eurozone. The ECB has raised rates by four percentage points, indicating another increase in July. Isabel Schnabel stressed the risk of continued price growth. Today’s EUR/USD outlook is bullish. On Wednesday, two German policymakers of the European Central Bank expressed concerns about the persistent inflation in the Eurozone. Consequently, they suggested that an extended period of elevated interest rates might be necessary to control it. They attributed this situation partly to the remarkably tight labor market in the region. Notably, the ECB has raised rates by four percentage points over the past year, indicating another increase in July. Furthermore, the bank anticipates it could take until 2025 to bring price growth back to the desired level of 2%. Joachim Nagel, the chief of Germany’s Bundesbank, compared inflation to a voracious creature and emphasized the need for resolute action against it. Additionally, he stated that inflation fighters must exhibit strong determination due to inflation’s stubborn nature. Moreover, Nagel argued that while headline inflation may decline rapidly in the upcoming months, the ECB’s task is incomplete. This is because underlying pressures could remain concealed. His French counterpart, Francois Villeroy de Galhau, took a more nuanced stance. He highlighted the importance of maintaining high rates for an extended period, with any additional hikes being limited. Elsewhere, market expectations reflect a July rate hike, given the ECB’s implicit commitment. Moreover, they have factored in another move in September or October, projecting a peak rate of 4%. Isabel Schnabel, another German ECB board member, also stressed the risk of continued price growth. She highlighted the potential of a challenging wage-price spiral. EUR/USD Key Events Today Investors expect data from the US on initial jobless claims and existing home sales. Furthermore, Fed Chair Jerome Powell will continue with his testimony to Congress. EUR/USD Technical Outlook: 1.1000 Resistance Might Trigger A Pullback. EUR/USD 4-hour chart EUR/USD has made a new high above the 1.0950 resistance level, strengthening the bullish bias. This comes after the price pushed off the 30-SMA support. Moreover, the RSI has entered the overbought region, suggesting solid bullish momentum. However, this is also an extreme level for bulls and might allow bears to return and retrace the recent move. Bears will return if the bulls cannot break above the 1.1000 key resistance level. A pullback would likely retest the 1.0950 key level. https://www.forexcrunch.com/eur-usd-outlook-ecb-hawks-stress-need-for-more-rate-hikes/

2023-06-16 04:50

The European Central Bank will likely raise borrowing costs on Thursday. The US Federal Reserve recently halted a series of 10 consecutive rate hikes. Inflation in the Eurozone remains unacceptably high for the ECB. Today’s EUR/USD forecast is slightly bullish. The European Central Bank will likely raise borrowing costs on Thursday, reaching their highest level in 22 years. Moreover, the bank intends to leave room for additional rate hikes as it continues to combat high inflation. This is despite a weakening Eurozone economy. In contrast, the US Federal Reserve recently halted a series of 10 consecutive rate hikes. Consequently, global investors understood that the tightening cycle in developed economies is nearing its end. However, further rate hikes in the US is still possible. On the other hand, inflation in the Eurozone remains unacceptably high for the ECB, standing at 6.1%, more than three times the target of 2%. However, underlying price growth, excluding food and energy, is only beginning to slow down. These factors will likely keep the ECB on its current path of tightening. This is because it failed to predict the current bout of high inflation and initiated rate hikes later than many other global counterparts last year. The ECB will likely raise the deposit rate for the eighth consecutive time by 25 basis points to 3.5%, reaching the highest level since 2001. Economists surveyed by Reuters expect another rate increase of the same magnitude in July, a move that several policymakers have already indicated. EUR/USD Key Events Today Investors await the ECB monetary policy meeting, where the central bank will likely lift rates by 25bps. At the same time, they expect a retail sales report from the US that will show the state of consumer spending in the country. EUR/USD Technical Forecast: Bulls Post Fresh Highs Above 1.0850. EUR/USD 4-hour chart The EUR/USD has made a new high on the 4-hour chart, indicating a continuation of the bullish trend. Bears came in for a pullback when the price reached the 1.0850 resistance level. However, the pullback is approaching the 30-SMA and the 1.0785 support level, where it will likely find strong support. If bulls are still strong enough to make new highs, the price will bounce higher to break above the 1.0850 resistance. However, bears have also gotten stronger, as seen in the big-bodied candles. This could see the price break below the 30-SMA. https://www.forexcrunch.com/eur-usd-forecast-economists-expect-ecb-to-hike-by-25bps/