2024-09-27 12:56

Japan announced a new prime minister on Friday after a tight race. Japan’s new prime minister, Ishiba, supports the current monetary policy moves. US inflation rose by 0.1%, which is smaller than the forecast of 0.2%. The USD/JPY price analysis supports further downside as the yen rallies after Japan’s former defense minister, Shigeru Ishiba, won the seat for the next prime minister. Meanwhile, cooler-than-expected US inflation data weighed on the dollar. Japan announced a new prime minister on Friday after a tight race. The outcome boosted the yen since Ishiba supports the current monetary policy moves. Therefore, he might continue supporting the Bank of Japan as it raises borrowing costs. Although the last meeting was slightly cautious, economists expect at least one BoJ rate hike before the end of the year. Higher borrowing costs reduce the gap in rates between Japan and the US. Elsewhere, market focus remained trained on the US core PCE report. The Federal Reserve recently cut interest rates by a massive 50-bps. It was a clear indication of confidence that inflation was under control. Therefore, policymakers expect price pressure to continue declining to the target. Consequently, an unexpected figure could shift the outlook for future moves. Currently, there is a 50% chance of another massive reduction in November. Data on Friday revealed that inflation rose by 0.1%, smaller than the forecast of 0.2%. Therefore, the Fed has every reason to continue lowering borrowing costs. Moreover, a soft landing is more likely since the economy remains resilient. Notably, data on Thursday showed that US unemployment claims dropped to 218,000 compared to expectations of 225,000. Another report revealed that corporate profits increased at a faster-than-expected rate. USD/JPY key events today US Core PCE Price Index m/m USD/JPY technical price analysis: Bearish engulfing candle signals reversal On the technical side, the USD/JPY price has broken out of its bullish channel with a bearish engulfing candle. At the same time, the price has broken below the 30-SMA, indicating a shift in sentiment. Meanwhile, the RSI has dropped below 50, into bearish territory. -Are you looking for the best CFD broker? Check our detailed guide- However, the decline has reached the 143.01 support level and might pause here before continuing lower. A pause could allow the price to retest the recently broken channel support. If bears remain in control, the price will likely break below 143.01 support to retest the 141.01 level. https://www.forexcrunch.com/blog/2024/09/27/usd-jpy-price-analysis-yen-gains-following-ishibas-victory/

2024-09-27 09:15

Saudi Arabia plans to increase production after abandoning its $100 price target for oil. Market participants are focused on Canada’s GDP data. Initial US unemployment claims fell to 218,000, below forecasts of 225,000. The USD/CAD outlook shows a recovery from lows hit earlier in the week. The Canadian dollar fell as oil prices declined, while the dollar was steady after upbeat economic data in the previous session. Oil prices fell on Thursday due to worries of oversupply. The Financial Times reported that Saudi Arabia planned to increase production after abandoning its $100 price target for oil. Increased output will likely loosen the market and weigh on prices. At the same time, oil was weak as the conflict in Libya was partly resolved. The conflict had initially reduced production in the country, tightening the market. Market participants are now focused on Canada’s GDP data, which is due later in the day. Economists expect 0.1% GDP growth in July. The actual figure will guide the outlook on Bank of Canada rate cuts. Currently, traders are expecting 67-bps of rate cuts before the year ends. Furthermore, there is a chance the central bank will implement a massive cut after the Fed’s 50-bps reduction. Meanwhile, the US dollar was firm after data in the previous session revealed a steady economy. Initial unemployment claims fell to 218,000, below forecasts of 225,000, indicating steady demand for labor. Low claims could translate to a low unemployment rate, allowing the Fed to achieve a soft landing. A separate report showed that the economy grew by 3.0%, holding steady from the last reading. Steady growth indicates that the Fed will likely avoid a recession. USD/CAD key events today Canada GDP m/m US core PCE Price Index m/m USD/CAD technical outlook: Rebound meets solid resistance On the technical side, the USD/CAD price has rebounded to retest the 30-SMA resistance after making a new low near the 1.3425 level. Bears broke out of a strong, bullish channel with an impulsive move that broke below several major support levels. -Are you looking for the best CFD broker? Check our detailed guide- The price is now revisiting the 30-SMA and the 1.3500 key resistance level. However, bears might soon return since it still trades below the SMA, with the RSI below 50. If the price bounces lower, it might break below the 1.3425 support to make a new low and continue the downtrend. https://www.forexcrunch.com/blog/2024/09/27/usd-cad-outlook-oil-slump-gathers-buying-traction/

2024-09-26 10:10

Initially, the greenback rallied due to escalating Middle East tensions. Markets are pricing a higher 59% chance of a massive November Fed cut. All eyes are on the US core PCE price index, due on Friday. The AUD/USD outlook indicates increased bullish optimism as the dollar loses ground due to increased Fed rate cut expectations. Meanwhile, the Australian dollar rose despite data showing weaker labor demand. Initially, the greenback rallied as escalating Middle East tensions drove investors to buy the safe-haven currency. The conflict between Hezbollah and Israel in Lebanon has escalated, raising fears of a wider war. The two groups fired missiles at each other on Wednesday, dampening risk appetite. However, market participants still paid attention to Fed rate cut bets. According to futures markets, there is a higher 59% chance that the US central bank will cut interest rates by 50-bps at the November meeting. Such a dovish outlook is bearish for the dollar, allowing the AUD/USD pair to climb. All eyes are now on the US core PCE price index due on Friday. It is a key measure of inflation for the Fed and might impact future policy moves. Economists expect inflation to increase by 0.2%, as in the previous month. A smaller-than-expected number will boost rate-cut bets. On the other hand, a jump could reduce expectations for a massive cut and increase those for a smaller one. Meanwhile, in Australia, job openings in the three months to August fell as demand for labor cooled. Vacancies fell by 5.2% after the last reading showed a 3.5% decline. The report might add pressure on the RBA to consider near-term rate cuts. AUD/USD key events today US final GDP q/q US unemployment claims Fed Chair Powell Speaks AUD/USD technical outlook: RSI pauses while bulls make higher highs On the technical side, the AUD/USD price is climbing after failing to trade below the 30-SMA. The bullish bias remains strong with the price above the SMA and the RSI above 50. -Are you looking for the best CFD broker? Check our detailed guide- However, while the price is making higher highs, the RSI has stalled. This is a sign that bulls might be tired. Therefore, they might fail to push the price above the 0.6900 resistance. That would create a double top that could lead to a reversal. However, if there is a surge in momentum, the price will likely make a new high above0.6900. https://www.forexcrunch.com/blog/2024/09/26/aud-usd-outlook-dollar-reverses-on-dovish-fed-outlook/

2024-09-26 09:14

The dollar recovered as investors sought safety amid rising Middle East tensions. Market participants are pricing a 59% chance of another 50-bps rate cut in November. Sterling has gained about 5.4% against the dollar this year. The GBP/USD forecast shows a sudden shift in sentiment to bearish as the dollar recovers from a 14-month low. At the same time, the pound was weak as recent economic data pointed to a dimmer outlook. The dollar recovered against most currencies on Wednesday and Thursday as investors sought safety amid rising Middle East tensions. The conflict between Hezbollah and Israel in Lebanon has escalated, with the two groups exchanging missiles. The US and other partners announced they were working tirelessly to avoid a full-blown war between the two. Despite the dollar’s rebound, fundamentals point to more downside. The Fed recently cut interest rates by a massive 50-bps, starting a long-awaited easing cycle. The rate cut sent the greenback to fresh lows before it recovered. However, the US central bank flagged more rate cuts to come. As a result, market participants are pricing a 59% chance of another 50-bps rate cut in November. Nevertheless, incoming data will continue to shape this outlook. The next major report is the core PCE index, which will show the state of inflation. Market participants will also watch GDP data later today. On the other hand, the pound fell after data in the previous session revealed a significant drop in UK consumer sentiment. The figure fell from -8 to -21 in September. Moreover, it came after soft business activity data showed a slowdown in the economy. Still, sterling has gained about 5.4% against the dollar this year as the Bank of England delays rate cuts. GBP/USD key events today US final GDP q/q US unemployment claims Fed Chair Powell Speaks GBP/USD technical forecast: Solid bearish momentum On the technical side, the GBP/USD price is trading in a tight, bullish channel with clear support and resistance lines. The price recently fell to the channel support after failing to sustain a move above the 1.3400 key level. -Are you looking for the best CFD broker? Check our detailed guide- The decline has paused at the support line, which coincides with the 30-SMA. Therefore, it might bounce higher to make a new high above 1.3400. However, if bears are strong enough to break below the support zone, the price might revisit the 1.3200 support level. https://www.forexcrunch.com/blog/2024/09/26/gbp-usd-forecast-dollar-rebounds-from-14-month-low/

2024-09-25 10:19

The People’s Bank of China announced plans to cut lending costs by 50-bps. Bank of Canada governor Tiff Macklem delivered a dovish speech. The dollar fell after data showed weaker-than-expected consumer confidence. The USD/CAD forecast shows a new low for the pair this year after the loonie soared on improved risk sentiment. On Tuesday, China announced a stimulus package to support the economy, boosting commodity currencies like the Canadian dollar. The People’s Bank of China announced plans to cut lending costs by 50-bps among other measures to support the economy. China is a major consumer of most major commodities, including oil. Meanwhile, Canada is a net exporter of oil and benefits from higher global demand. Consequently, oil prices rose together with the Canadian dollar. Furthermore, oil gained due to supply worries from tensions in the Middle East and a hurricane threat in the US. Elsewhere, Bank of Canada governor Tiff Macklem delivered a dovish speech, increasing bets for BoC rate cuts. He noted that the central bank had made a lot of progress in lowering inflation. Notably, Canada’s inflation reached the 2% target in August. Therefore, market participants should expect more rate cuts in the future. Meanwhile, the dollar fell after data showed weaker-than-expected consumer confidence. The CB’s consumer confidence number fell sharply from 105.6 in August to 98.7. Moreover, it revealed that people were finding it harder to get jobs. Worries about the labor market dented the greenback since it could mean a more dovish Fed. After last week’s massive rate cut, market participants are expecting more data for clue on the next move. The main economic indicator is the core PCE due on Friday. USD/CAD key events today There won’t be any high-impact events in the US or Canada. Therefore, the pair might extend yesterday’s move. USD/CAD technical forecast: Channel breakout triggers sharp fall On the technical side, the USD/CAD price has dropped sharply after breaking out of its bullish channel. The decline has broken several key support levels, including 1.3450. Moreover, the price has fallen far below the 30-SMA, with the RSI dipping into the oversold region. -Are you looking for the best CFD broker? Check our detailed guide- Bears are in charge, and they are enthusiastic to push prices lower. However, USD/CAD might rebound to retest the recently broken 1.3450 level before continuing lower. The next major hurdle for the downtrend is at the 1.3400 level. https://www.forexcrunch.com/blog/2024/09/25/usd-cad-forecast-loonie-jumps-on-improved-risk-appetite/

2024-09-25 09:16

Australia’s Consumer Price Index report showed inflation increasing by 2.7%. RBA policymakers said they would look beyond a decline in headline inflation. Data on Tuesday showed an unexpected decline in US consumer confidence. The AUD/USD price analysis shows a slight retreat in the bullish trend after a drop in Australia’s inflation raised the probability of an RBA rate cut. Meanwhile, the US dollar was weak after data in the previous session revealed increasing worries about the labor market. Australia’s Consumer Price Index report showed inflation increasing by 2.7%, a three-year low, in August. Moreover, it was a significant drop from the previous month’s reading of 3.5%. However, the Australian dollar barely fell since economists had expected the drop. Still, it improved the chances of an RBA rate cut in December to 75%. The Reserve Bank of Australia recently held rates unchanged and noted it was too early to consider rate cuts. Furthermore, policymakers said they would look beyond a decline in headline inflation, which was only temporary. Therefore, more is needed to prompt a more dovish outlook since underlying inflation remains high. Notably, price pressures eased in August due to electricity subsidies by the federal government. The RBA will be under more pressure to lower borrowing costs if underlying inflation drops. Meanwhile, the greenback remained weak after data on Tuesday showed an unexpected decline in consumer confidence. The Conference Board consumer confidence figure plunged from 105.6 to 98.7in September. More consumers expressed worries about the labor market, noting it was harder to get jobs. Furthermore, market participants are eagerly awaiting the core PCE figures due on Friday. Coller-than-expected inflation could boost expectations for a massive November Fed rate cut. AUD/USD key events today Market participants do not expect any key reports from the US. Therefore, they will keep digesting Australia’s CPI report. AUD/USD technical price analysis: Bulls pause for breather at 0.6900 On the technical side, the AUD/USD price has paused its rally near the 0.6900 key level. Although it is retreating, the bullish bias remains strong. The price still trades well above the 30-SMA, and the RSI is near the overbought region. -Are you looking for the best CFD broker? Check our detailed guide- However, after such a strong rally, bulls seem exhausted. The RSI has made a bearish divergence, showing weaker bullish momentum. Therefore, the price might pull back to retest the 30-SMA before making new highs. However, if bears challenge the SMA support and win, AUD/USD will likely start trending lower. https://www.forexcrunch.com/blog/2024/09/25/aud-usd-price-analysis-australias-cpi-eases-as-expected/