2024-04-10 08:59
The US will release inflation data later today. UK data showed slower growth in starting salaries for permanent workers in March. Monetary policies in the UK and the US are converging. Excitement brews in GBP/USD price analysis as the pound gains ground in anticipation of pivotal US data. Investors are on the edge, awaiting the imminent US Consumer Price Index report. This eagerly anticipated release holds the potential to reshape perceptions regarding rate cuts in the US. The US will release inflation data later today that will give a clear picture of the state of price growth in the economy. Fed policymakers have monitored inflation over the past few months to see if it is on the path to 2%. A downtrend will give them enough confidence to settle on the first-rate cut’s timing. However, the last inflation report revealed that price growth had stalled. As a result, there is uncertainty about the outlook for interest rate cuts. Another unexpectedly hot report would likely further delay rate cuts and increase uncertainty. However, a decline would help policymakers decide the best time to start rate cuts. Meanwhile, in the UK, data on Monday showed slower growth in starting salaries for permanent workers in March. A drop in wage increases would allow inflation to drop to the 2% target. Consequently, the Bank of England would be more willing to cut interest rates. At the same time, investors are awaiting UK GDP data on Friday. Currently, monetary policies in the UK and the US are converging. This indicates that the Fed has become less dovish while the BoE is less hawkish. However, this might change with the incoming US inflation data. GBP/USD key events today US Core CPI m/m US CPI m/m US CPI y/y FOMC Meeting Minutes GBP/USD technical price analysis: Higher high solidifies bullish sentiment On the technical side, the GBP/USD price has fully confirmed the new bullish direction by making a higher high. Moreover, the price has broken above the 1.2650 key resistance level. The bullish bias is strong, with the 30-SMA facing up and the RSI above 50. Therefore, bulls will likely target the next resistance at the 1.2800 key level. However, the trend might be shallow because the price stays close to the 30-SMA. Still, bulls will maintain control if the price remains above the SMA. https://www.forexcrunch.com/blog/2024/04/10/gbp-usd-price-analysis-pound-edges-up-ahead-of-key-us-data/
2024-04-09 10:34
The bias remains bullish, so further growth is natural. Taking out the resistance levels activates further growth. The US data should bring sharp movements tomorrow. The EUR/USD price is struggling hard to resume its rally. The pair is trading at 1.0859 at the time of writing, below today’s high of 1.0865. The bias is overall bullish, so further upside remains possible as the US dollar is under downside pressure. Yesterday, the German Industrial Production and the Eurozone Sentix Investor Confidence came in better than expected, while the German Trade Balance was disappointed. Today, the US will release the RCM/TIPP Economic Optimism and the NFIB Small Business Index, but these are low-impact events. Still, the price could print strong moves ahead of the US inflation figures. The CPI m/m may report a 0.3% growth in March. CPI y/y is expected to register a 3.4% growth, while the Core CPI could announce a 0.3% growth. Stronger data should boost the USD as the FED could maintain the monetary policy unchanged in the next meetings. On the contrary, lower inflation may weaken the greenback. Also, the US will release the FOMC Meeting Minutes report, representing a high-impact event. Due to uncertainty, the EUR/USD pair could experience sharp movements in both directions. Technically, the EUR/USD price ended its temporary retreat. Now, it challenges the descending pitchfork’s upper median line (uml). This represents a dynamic resistance, so staying near indicates an imminent breakout. The former high of 1.0865 stands as a static resistance. Taking out the immediate resistance levels and making a new higher high may activate more declines. On the other hand, new false breakouts should precede a new sell-off, at least towards the weekly pivot point of 1.0812. https://www.forexcrunch.com/blog/2024/04/09/eur-usd-price-gains-lacking-momentum-ahead-of-us-cpi/
2024-04-09 10:30
Australia’s business conditions barely changed in March. Investors have scaled back Fed rate-cut expectations since the March employment report. Economists expect a decline in US inflation in March. The AUD/USD outlook looks up as the Aussie stands its ground following the latest data unveiling steady Australian business conditions in March. Meanwhile, the dollar was weak despite rising Treasury yields as investors cautiously awaited the US inflation report. Australia’s business conditions barely changed in March as higher interest rates pressured the economy. Moreover, sales and employment held steady. However, companies remained concerned about the economic outlook as the Reserve Bank of Australia is not looking to cut rates soon. At the moment, markets are expecting the first cut around November. Meanwhile, in the US, investors have scaled back rate-cut expectations since the March employment report revealed a still-hot labor market. Demand in the economy is still high. Therefore, any interest rate cuts by the Fed have to be timed well to avoid a spike in inflation. Consequently, there is doubt in the market whether the Fed will start cutting interest rates in June. Moreover, markets now only expect 60 basis points of rate cuts in 2024. The next major economic event in the US is the release of consumer inflation data. Economists expect a decline in inflation in March. However, these figures might also surprise to the upside. In such a case, rate-cut bets would decline further. Furthermore, investors would expect the first cut in July. AUD/USD key events today There are no key events from Australia or the US today. As a result, investors will keep speculating ahead of the US inflation report. AUD/USD technical outlook: Bulls aim for a higher high to confirm recent breakout On the technical side, the AUD/USD price is bullish as it trades above a recently broken trendline. The trend recently reversed to bullish when the price broke above a resistance trendline. Moreover, it pulled back to retest the trendline and is now climbing. Bulls must make a higher high above the 0.6620 critical resistance level to complete confirmation of the breakout. There is a high chance this will happen because the bullish bias is strong. The price sits far above the 30-SMA, and the RSI is in bullish territory above 50. Therefore, bulls might soon retest the 0.6660 key level. https://www.forexcrunch.com/blog/2024/04/09/aud-usd-outlook-aus-business-conditions-hold-ground-in-march/
2024-04-09 09:35
US Treasury yields rose due to a decline in rate cut expectations. The likelihood of a Fed rate cut in June fell to around 54%. Japan’s Finance Minister, Shunichi Suzuki, repeated his warning against sharp currency moves. In a tight move, the USD/JPY price analysis leaned bullish as the yen weakened due to a rise in US Treasury yields. However, warnings of a possible intervention kept the USD/JPY pair from breaching the $152 level. Meanwhile, the dollar was steady ahead of the US inflation report. US Treasury yields rose on Tuesday due to a decline in rate cut expectations. The likelihood of a Fed rate cut in June fell to around 54% after Friday’s jobs report. An unexpected increase in employment in March had markets shifting their outlook on US interest rates. Currently, investors expect 60bps of cuts in 2024, a smaller figure than the Fed’s forecast of 75bps. Consequently, short-term yields, which reflect rate-cut expectations, have rallied. Ideally, a rally in yields would have pushed the USD/JPY pair higher. However, Japanese authorities have kept a lid on price increases with their repeated warnings about a possible intervention. On Tuesday, Japan’s Finance Minister Shunichi Suzuki repeated his usual statement that authorities would do whatever it takes to deal with excessive currency moves. At the same time, Bank of Japan governor Kazuo Ueda hinted at possibly reducing economic stimulus if inflation continues to trend higher. However, a catalyst for the dollar would likely bring back sharp moves. Notably, investors are awaiting the US inflation report. Hotter-than-expected figures could push the USD/JPY price beyond $152, prompting an intervention. USD/JPY key events today Traders will likely remain on the sidelines, as no high-impact reports are coming from the US or Japan. USD/JPY technical price analysis: Bullish momentum wanes near a solid barrier On the technical side, the USD/JPY price is above the 30-SMA, showing bulls are back in the lead. The previous sharp bearish move has reversed, and now the price is approaching the pivotal 152.00 key resistance level. Although the RSI is above 50, the bullish momentum has gradually faded. As a result, there is a bearish RSI divergence that might allow bears to take control. If bulls fail to regain enough momentum to breach the 152 level, bears might break below the 30-SMA to target 150.00. Such a move would allow the price to retrace 38.2% of the previous trend. https://www.forexcrunch.com/blog/2024/04/09/usd-jpy-price-analysis-soaring-us-treasury-yields-weaken-yen/
2024-04-08 15:51
The USD/CHF pair seems overbought after failing to hit the upper median line. The fundamentals could change the sentiment on Wednesday. Failing to take out the 0.9 psychological level announced exhausted sellers. The USD/CHF price rallied mildly on Monday, trading near 0.9050, versus Friday’s low of 0.8998. The pair climbed as high as 0.9065 today. However, the buyers could be exhausted after the upside. The greenback received a helping hand from the US economy on Friday. The Non-Farm Payrolls came in at 303K, versus 212K expected and 270K in the previous reporting period. The Unemployment Rate dropped unexpectedly from 3.9% to 3.8%, while Average Hourly Earnings reported 0.3% growth, matching expectations. Today, the unemployment rate in Switzerland jumped from 2.2% to 2.3%, even if traders expected the rate to remain at 2.2%. The US will release the NFIB Small Business Index and RCM/TIPP Economic Optimism tomorrow, but these won’t affect the markets a lot. The fundamentals should have a major impact on Wednesday when the US will publish the inflation figures. The Consumer Price Index is expected to report a 0.3% growth in March, after a 0.4% growth in February, CPI y/y may announce a 3.4% growth versus 3.2% in the previous month, while Core CPI could register a 0.3% growth, after a 0.4% growth in February. Higher-than-expected inflation should boost the US dollar as the Fed’s rate cut speculation may fade. Technically, the currency pair rallied after failing to take out the 0.9000 psychological level. It has registered only a false breakdown below this downside obstacle. Now it has turned to the upside. Also, its failure to stay below the median line (ml) revealed exhausted sellers. Now, it was about to hit the upper median line (uml), representing a dynamic resistance. However, the sellers took the lead again, retreating from the daily highs. Failing to hit the upper median line showed an overbought situation. Still, staying near the dynamic resistance may announce an imminent breakout and continuation. https://www.forexcrunch.com/blog/2024/04/08/usd-chf-price-recovers-above-0-90-focus-on-us-cpi/
2024-04-08 09:59
The dollar rose on Friday due to a positive employment report. The US reported an additional 303K jobs in March and a drop in the unemployment rate. The European Central Bank will meet on Thursday this week. An early session downturn pointed to a bearish tilt in the EUR/USD outlook, with the dollar standing resolute in anticipation of this week’s inflation data. At the same time, investors were gearing up for the European Central Bank meeting later in the week. The dollar surged on Friday due to a positive employment report. However, it ended last week lower after a mixed set of data. Meanwhile, rate-cut bets fluctuated as investors kept readjusting according to incoming data. US service activity data at the start of last week gave the impression that the economy was slowing down. Consequently, traders thought this would also lower inflation. However, this view changed when the US reported an additional 303K jobs in March and a drop in the unemployment rate. This was a sign that demand in the labor market was still high. Therefore, there is a higher risk that inflation will spike if the Fed starts cutting interest rates too soon. Investors will now focus on inflation figures coming on Wednesday. A hotter-than-expected report would likely lead to a more hawkish outlook for the Fed. The European Central Bank will meet on Thursday this week. Traders expect the central bank to hold rates and signal the first cut in June. Unlike the Fed, ECB policymakers are more confident that inflation is heading for the 2% target. This increases the chance that the ECB will cut rates before the Fed. EUR/USD key events today It will be a slow start to the week for the EUR/USD pair as neither the Eurozone nor the US will release any key reports. EUR/USD technical outlook: Price retreats from trendline barrier On the charts, the EUR/USD price is falling after meeting a strong resistance trendline at the 1.0875 level. However, indicators on the chart point to a bullish bias. The 30-SMA is pointing upward and sits below the price, showing an uptrend. At the same time, the RSI trades above 50 in bullish territory. Therefore, if the price respects the SMA as support, it will rise to retest the resistance trendline. On the other hand, if bears are ready to take over, the price will break below the SMA and the 1.0800 key support. https://www.forexcrunch.com/blog/2024/04/08/eur-usd-outlook-dollar-holds-firm-ahead-of-inflation-numbers/
