2023-12-23 19:01
Data showed that annual US inflation fell further below 3% in November. Figures on Thursday revealed a worsening UK budget situation. Inflation in the UK was lower than anticipated in November. The dollar is caught in the sway of softer inflation signals and continues its decline, casting a favorable glow on the GBP/USD weekly forecast. –Are you interested to learn more about forex options trading? Check our detailed guide- Ups and downs of GBP/USD The pound ended the week slightly high, although it was nearly flat after fluctuating. It remained stable against the dollar, with traders absorbing the latest information on the UK budget deficit. Moreover, the impact of Wednesday’s November inflation data, which was lower than anticipated, continued to resonate in the market. Thursday’s figures revealed a worsening budget situation for British Prime Minister Rishi Sunak, as the November deficit exceeded expectations. Notably, the pair fell on Wednesday to the lowest point in almost two months following the key inflation reading. Meanwhile, the dollar index declined on Friday, reaching a nearly five-month low. This decline came after data showed that annual US inflation had further slowed below 3% in November. Consequently, it strengthened market expectations for a US interest rate cut in March. Next week’s key events for GBP/USD The markets will be closed for the Christmas holiday next week, so investors will look out for major events in the first week of 2024. In the first week of 2024, traders will focus on data from the UK and the US, showing business activity in the manufacturing sectors. Additionally, the US will release the FOMC meeting minutes, which will show what policymakers discussed at the last meeting in 2023. Lastly, the US employment report will show the state of the labor market. A higher-than-expected reading could reduce Fed rate cut bets, while the opposite is true. GBP/USD weekly technical forecast: Bullish trend shows signs of a slowdown The bullish trend on the 4-hour chart has slowed down after reaching the 1.2803 resistance level. Moreover, the slope of the 22-SMA has become shallower, and the price is not making big swings from the SMA. At the same time, bears are showing some strength as they keep challenging the SMA support. –Are you interested to learn more about forex tools? Check our detailed guide- Meanwhile, the RSI has made a bearish divergence. While the price has made a new higher high, the RSI has made a lower high, pointing to weaker bullish momentum. Since the price is already trading close to the SMA support, the bearish divergence might lead to a reversal in the trend. However, bears must break below the 22-SMA and the 1.2501 support level to confirm a reversal. https://www.forexcrunch.com/blog/2023/12/23/gbp-usd-weekly-forecast-dollar-falls-as-inflation-eases/
2023-12-22 13:22
The US inflation scenario is now leaning towards lower levels. The dollar index is poised for a weekly loss of approximately 0.73%. Data revealed a 2.5% year-on-year increase in Japan’s core consumer prices for November. Friday’s USD/JPY price analysis was bearish, with the dollar weak and investors on the edge as they eagerly anticipated US inflation data. According to Chris Weston, the head of research at Pepperstone, the US inflation scenario is now unbalanced and leaning towards lower levels. Moreover, the dollar index is poised for a weekly loss of approximately 0.73%, extending the previous week’s 1.3% decline. Meanwhile, the yen held steady, unaffected by Friday’s data revealing a 2.5% year-on-year increase in Japan’s core consumer prices for November. It marked the slowest growth over a year. Moreover, this eases pressure on the Bank of Japan to scale back its substantial stimulus. Notably, the core consumer price index decelerated from the 2.9% gain in October. Furthermore, the Japanese currency appears poised to end the week flat. Earlier in the week, the BoJ maintained its ultra-loose policy settings and provided few indications of when it might shift away from negative interest rates. Elsewhere, the minutes of the Bank of Japan’s October meeting revealed ongoing divisions among board members regarding the timeline for Japan to meet conditions for an exit. Meanwhile, a Reuters poll conducted in November showed that over 80% of economists expected that the BoJ would conclude its negative rate policy next year. USD/JPY key events today US Core PCE Price Index m/m Revised UoM US Consumer Sentiment USD/JPY technical price analysis: Price returns to crucial 142.01 support level On the charts, USD/JPY is back at the 142.01 support level. This comes after a failed attempt to reverse the trend. Initially, buyers threatened to take control when sellers challenged the 142.01 level a second time and failed to break below. However, the price stopped at the resistance trendline and the 145.01 key level. –Are you interested to learn more about forex tools? Check our detailed guide- Therefore, sellers reversed the bullish move and pushed the price back below the 30-SMA. Sellers are challenging the 142.01 support level for a third time. If they are strong enough, the price will break below and fall to the 140.51 level and lower. However, if the support is firm, bulls might resurface. https://www.forexcrunch.com/blog/2023/12/22/usd-jpy-price-analysis-investors-on-edge-ahead-of-us-inflation/
2023-12-22 08:32
Investors are preparing for the US core personal consumption expenditures data. A rebound in US stocks supported the Canadian dollar on Thursday. Canadian retail sales rose by 0.7% in October compared to September. A bearish tone set in for the USD/CAD outlook as Friday unfolded. The dollar, perched near a four-month low, held its breath ahead of a game-changing US inflation measure. The core PCE report will provide valuable insights into the Fed’s considerations for potential interest rate cuts in the upcoming year. –Are you interested to learn more about forex options trading? Check our detailed guide- Notably, the US core personal consumption expenditures data is the Federal Reserve’s favored underlying inflation gauge. Anticipations suggest a 3.3% annualized growth in the core measure, a slight decrease from October’s 3.5% upswing. Meanwhile, the Canadian dollar continued its recent rise against the US dollar, spurred by a Wall Street rally on Thursday. As a result, there is pressure on speculators with significant short positions in the Canadian dollar. “A rebound in US stocks prompted the USD to relinquish yesterday’s gains. Therefore, it pushed USD-CAD lower in the process,” noted George Davis from RBC Capital Markets. Notably, Wall Street recovered much of the previous day’s losses as economic data increased optimism about potential Fed rate cuts. At the same time, speculators scaled back their bearish bets on the Canadian dollar, reducing positions that had reached a six-year high in November. Elsewhere, Canadian retail sales rose by 0.7% in October compared to September, with even more substantial growth in volume terms. However, a preliminary estimate for November showed no growth. USD/CAD key events today Canada GDP m/m US Core PCE Price Index m/m US Consumer Sentiment USD/CAD technical outlook: Downtrend extends to the key 2.414 fib level Despite weakness in the downtrend, USD/CAD has made a new low, extending the price down to the key 2.414 fib level. However, the price is staying close to the 30-SMA, a sign that bears are not as strong as they were when the move began. Moreover, the RSI has made a bigger bullish divergence, showing bearish momentum has weakened. –Are you interested to learn more about forex tools? Check our detailed guide- Since bears are weaker and the price has met strong support at the 2.414 fib level, bulls might resurface for a pullback or reversal. Therefore, the price will likely soon retest the 1.3350 level and the 30-SMA. A break above the SMA would confirm a bullish takeover. https://www.forexcrunch.com/blog/2023/12/22/usd-cad-outlook-dollar-near-4-month-low-ahead-of-inflation/
2023-12-21 13:25
The US and Canadian data should move the rate today. A new higher high activates further growth. The bias remains bullish as long as it stays above the lower median line (LML). The gold price is trading in the green at $2,037 at the time of writing. The precious metal tries to resume its upside movement. The US dollar remains bearish, so a deeper drop can be expected. –Are you interested to learn more about forex options trading? Check our detailed guide- This scenario helps the XAU/USD buyers to take it higher. Still, the fundamentals could shake the price today. In the short term, the yellow metal dropped a little only because the US CB Consumer Confidence and Existing Home Sales came in better than expected in the last trading session. Today, the US is to release high-impact data, such as the Final GDP, which may announce a 5.2% growth again, and the Unemployment Claims indicator, which is expected at 214K in the last week, above 202K in the previous reporting period. Also, the Final GDP Price Index, Philly Fed Manufacturing Index, and CB Leading Index data will be released. The yellow metal remains under strong upside pressure despite temporary retreats. The Canadian retail sales data could significantly impact the XAU/USD later. Tomorrow, the US publishes the Revised UoM Consumer Sentiment, New Home Sales, Durable Goods Orders, Core Durable Goods Orders, and the Core PCE Price Index. From a technical point of view, the XAU/USD retreated a little after failing to reach the $2,047 mark on the last attempt. Still, the short-term correction seems over. The price developed a flag pattern, seen as an upside continuation formation. –Are you interested to learn more about forex tools? Check our detailed guide- It challenges the flag’s resistance, so we must wait for confirmation before taking action. Also, from my previous analysis, you knew that the yellow metal is trapped between $2,015 and $2,047 levels. The bias remains bullish as long as it stays above the lower median line (LML). Activating the flag formation and making a new higher high, a valid breakout through 2,047 validates further growth. https://www.forexcrunch.com/blog/2023/12/21/gold-price-forms-a-bullish-flag-all-eyes-on-us-gdp-data/
2023-12-21 10:04
ECB policymakers tried to discourage traders from speculating on impending rate cuts. Traders raised their bets on lower ECB rates after Britain’s lower inflation figures. Investors are awaiting the final estimates of US third-quarter GDP. ECB policymakers fell short in reducing rate-cut expectations, resulting in a bearish EUR/USD outlook on Thursday. Two influential ECB hawks tried to discourage traders from speculating on impending rate cuts on Wednesday. However, their efforts failed to yield any results. Moreover, investors remained cautious ahead of the US GDP report. –Are you interested to learn more about forex options trading? Check our detailed guide- Bundesbank President Joachim Nagel and his Dutch counterpart Klaas Knot emphasized the need for the ECB to take time before signaling victory over historically high inflation. Nagel stated, “We must initially remain at the current interest rate plateau so that monetary policy can fully develop its inflation-dampening effect.” Additionally, he warned speculators about expecting an imminent interest rate cut, advising them to be careful as some have already miscalculated. However, Nagel admitted that rates had likely reached their peak. This sentiment was echoed by Knot. Still, traders maintained their expectations. Notably, after a weaker-than-expected inflation print in Britain, they raised their bets on lower ECB rates. Moreover, money markets fully expect 150 basis points of cuts for the next year. It would take the ECB’s deposit rate to 2.5%. Moreover, there is a slight risk ECB rates will end the year at 2.25%. At the same time, investors eagerly awaited more US economic data for additional insights into the global interest rate trajectory. The final estimates of US third-quarter GDP and the weekly jobless claims report will give clues on Fed rate cuts. EUR/USD key events today The US Gross Domestic Product report The US initial jobless claims report EUR/USD technical outlook: Price consolidates after hitting strong resistance On the charts, the EUR/USD uptrend has paused to consolidate after meeting strong resistance at the 1.1000 key level. The price now trades between the 1.1000 resistance and the 1.0900 support levels. Moreover, the price respects clear trendline support and resistance levels, forming a wedge pattern. –Are you interested to learn more about forex tools? Check our detailed guide- Looking at the indicators, the RSI is above 50, while the 30-SMA sits below the price, pointing to a bullish bias. Therefore, bulls might get another chance to retest the 1.1000 key resistance level. However, if the price breaks below the SMA, it might continue consolidating between the 1.1000 and 1.0900 key levels. https://www.forexcrunch.com/blog/2023/12/21/eur-usd-outlook-ecb-fails-to-suppress-rate-cut-bets/
2023-12-21 08:37
British inflation hit an annual rate of 3.9% in October, marking a two-year low. Investors have fully priced in a Bank of England rate cut by May 2024. Analysts anticipate an easing in Friday’s US core personal consumption expenditure. The GBP/USD forecast maintained its bearish outlook on Thursday as the pair grappled with losses ahead of highly anticipated US GDP figures. Wednesday witnessed a notable plunge in the currency, marking its most substantial drop in two months. This downturn resulted from British inflation figures, which fell below expectations. –Are you interested to learn more about forex options trading? Check our detailed guide- British inflation hit an annual rate of 3.9% in October, marking a two-year low. Consequently, traders factored in potential Bank of England rate cuts as early as May. Notably, the annual increase in consumer prices dropped, reaching its lowest level since September 2021. Moreover, investors have fully priced in a Bank of England rate cut by May 2024 and now perceive a nearly 50% likelihood of a cut by March. Vassili Serebriakov from UBS noted that several banks had observed a front-loading of pricing for interest rate cuts. Furthermore, he mentioned that the Bank of England was slightly lagging due to higher inflation but is now aligning its direction with others. Serebriakov also noted that the pound had experienced positive momentum recently. Therefore, the current trend represents a reversal of some of those previous movements. Meanwhile, analysts anticipate a similar easing in Friday’s US core personal consumption expenditure data. They believe the annual inflation rate will slow to 3.3%, its lowest since 2021. There were also expectations of further dollar weakening amid projections of 150 basis points of Federal Reserve cuts in 2024. However, investors remained cautious, temporarily preventing additional dollar selling. GBP/USD key events today Final US GDP q/q US unemployment claims GBP/USD technical forecast: Price is poised for a lower low On the technical side, the pound is on the verge of breaking below strong support to make a lower low. This would further confirm the new bearish direction. The trend recently changed when the price broke below the 30-SMA, and the RSI dipped into bearish territory below 50. –Are you interested to learn more about forex tools? Check our detailed guide- This came after bulls weakened and failed to make a higher high. Instead, the price made a lower high and could soon make a lower low. Furthermore, a continuation of the downtrend would likely lead to a break below the 1.2601 support level. The target for bears is at the 1.618 fib extension level. https://www.forexcrunch.com/blog/2023/12/21/gbp-usd-forecast-pound-nurses-losses-ahead-of-us-gdp/
