2024-09-24 12:39

Data on Monday painted a bleak picture of the Eurozone economy. Market participants raised the chances of an ECB cut in October to 77%. The US composite PMI held steady at 54.4 in September. The EUR/USD price analysis shows a transition from a bullish to a ranging market after PMI data in the Eurozone and the US. Business activity in the Eurozone deteriorated in September, sinking the euro. Meanwhile, it held steady in the US. Data on Monday painted a bleak picture of the Eurozone economy. S&P Global released a set of PMI figures showing the composite number at 48.9 in September, down sharply from the previous month’s 51.0. A decline in business activity is a sign that the economy is struggling amid high interest rates. Consequently, market participants raised the chances of an ECB cut in October to 77%. The European Central Bank started its rate-cutting cycle before the Fed. However, it paused after the first cut as it became clear inflation remained stubborn. However, economic weakness puts more pressure on the central bank to cut at the next meeting. Meanwhile, in the US, the composite PMI held steady at 54.4 in September after a reading of 54.6 in August. The US economy has remained resilient despite high rates. Last week, data on retail sales revealed an unexpected jump, indicating resilient consumer spending. Therefore, the Fed might achieve a soft landing, with inflation easing without destroying growth. The next major US reports will include GDP and the core PCE. These figures will shape the outlook for future rate cuts. Currently, market participants are betting on another massive rate cut in November. EUR/USD key events today US CB consumer confidence EUR/USD technical price analysis: Consolidation after RSI divergence On the technical side, the EUR/USD price is chopping through the 30-SMA amid wild swings. At the same time, the price is respecting the 1.1075 support and the 1.1175 resistance level. Meanwhile, the RSI is also chopping through the pivotal 50 mark, a sign that the price is ranging. -Are you looking for the best CFD broker? Check our detailed guide- Furthermore, when EUR/USD reached the 1.1175 resistance, the RSI made a bearish divergence, signaling a possible reversal. Soon after, bears made a massive candle that broke below the 30-SMA. If the price stays below the SMA, it might soon revisit the 1.1075 support level. A break below this level would allow bears to aim for the 1.1000 support. https://www.forexcrunch.com/blog/2024/09/24/eur-usd-price-analysis-dismal-eu-pmis-tone-down-bulls/

2024-09-24 12:37

The RBA held rates on Tuesday and restated its commitment to lower stubborn inflation. The likelihood of an RBA cut in December increased slightly to 72%. PMI data in the previous session revealed steady business activity. The AUD/USD outlook shows a whiplash reaction to the Reserve Bank of Australia’s policy meeting. The Australian dollar fluctuated after the RBA policy meeting as policymakers remained determined to tame inflation. The RBA held rates on Tuesday and restated its commitment to lower stubborn inflation. Due to high inflation, policymakers have remained cautious most of this year. At 3.9%, Governor Michele Bullock noted that underlying inflation remains too high. Therefore, further rate hikes are still possible. The Australian dollar soared immediately after the meeting before collapsing. The whiplash move showed uncertainty among market participants about the outlook for rate cuts. After the meeting, the likelihood of a cut in December increased slightly to 72%. Meanwhile, the US dollar held steady after PMI data in the previous session revealed steady business activity. At the same time, it indicated rising prices which could translate to higher inflation in the future. The report comes after the Federal Reserve lowered borrowing costs by 50-bps. Higher inflation could reduce the likelihood of another massive rate cut in November. At the moment, market participants are pricing an almost 50% chance of such an outcome. However, things might change as more data comes in. The market focus will now shift to GDP and core PCE figures. The GDP will show the state of the economy, which has performed better than expected. Meanwhile, the core PCE is a significant measure of inflation for the Fed. Therefore, it will impact expectations for future policy moves. AUD/USD key events today US CB Consumer Confidence AUD/USD technical outlook: Choppy bullish price action On the technical side, the AUD/USD price is in a bullish trend above the 30-SMA. At the same time, the RSI trades above 50 in bullish territory. The price recently broke above the 0.6800 resistance level. However, the move above the key level has been weak. The price has risen in a choppy fashion, indicating exhaustion. -Are you looking for the best CFD broker? Check our detailed guide- At the same time, the RSI has made a bearish divergence, a sign that bullish momentum is fading. Therefore, it might pull back to retest the 30-SMA. Moreover, it might break below the SMA and the 0.6800 level to reverse the trend. https://www.forexcrunch.com/blog/2024/09/24/aud-usd-outlook-rba-stays-committed-to-fight-inflation/

2024-09-23 10:25

An unexpected spike in services inflation complicated the outlook for BoE rate cuts. Data revealed an unexpected 1% increase in UK retail sales. The dollar rebounded against a weak yen on Friday. The GBP/USD outlook shows a slight shift in sentiment as the pound pulls back from recent highs. The decline comes as the dollar broadly recovers after the Bank of Japan failed to support the market’s hawkish outlook. Sterling had a strong rally last week as data reduced bets for Bank of England rate cuts. The first report of the week on Wednesday revealed that inflation held steady at 2.2%. However, there was an unexpected spike in services inflation, complicating the outlook for rate cuts. Policymakers have remained cautious despite low headline inflation figures. Their focus remains on the services sector, where price pressures remain high. The second major report came on Friday, showing an unexpected 1% increase in August retail sales. The UK economy has performed better than most expected in recent months. Therefore, the Bank of England has more room to pause before resuming rate cuts. Currently, market participants are pricing a 71% chance of a 25-bps BoE rate cut in November. However, this outlook might keep shifting with incoming data. Meanwhile, the dollar plunged on Wednesday last week after the Fed implemented an unexpected 50-bps rate cut. It was an aggressive start to an easing cycle that will continue to hurt the greenback. Traders are betting on another such rate cut in November. However, the dollar rebounded against a weak yen on Friday after a disappointing BoJ policy meeting. This strength spread across the board, affecting the pound. Still, fundamentals support more upside for GBP/USD. GBP/USD key events today US flash manufacturing PMI US flash services PMI GBP/USD technical outlook: Bullish momentum weakens On the technical side, the GBP/USD price is retreating after failing to sustain a move above the 1.3301 resistance level. Nevertheless, the bias is still bullish because the price trades above the 30-SMA, with the RSI above 50. -Are you looking for the best CFD broker? Check our detailed guide- GBP/USD has maintained a bullish trend since the price broke above the 30-SMA. It has made consistent higher highs and lows. However, the RSI has made a slight bearish divergence, indicating weaker momentum. Furthermore, price action shows bears are gaining strength after making an engulfing candlestick pattern. Therefore, the price might soon challenge the SMA. A break below would indicate a reversal. Otherwise, the bullish trend will continue. https://www.forexcrunch.com/blog/2024/09/23/gbp-usd-outlook-pound-pulls-back-after-weaker-pmis/

2024-09-23 09:00

The BoJ held rates on Friday and failed to give clear guidance on future rate hikes. Market participants are pricing a 49% chance of another massive Fed cut in November. Canadian sales jumped more than expected in July. The USD/CAD forecast shows a return of dollar bulls after a disappointing Bank of Japan policy meeting. Consequently, the Canadian dollar gave up some of last week’s gains when sales data revealed resilient consumer spending. The Bank of Japan held rates on Friday and failed to give clear guidance on future rate hikes. As a result, investors were disappointed, leading to a drop in the yen. This, in turn, boosted the US dollar, which rose against most peers. The rebound picked the dollar up from lows hit after the FOMC policy meeting. The US Central Bank cut borrowing costs by 50-bps, beating forecasts of 25-bps. Furthermore, policymakers forecast more rate cuts to come, with market participants pricing a 49% chance of another massive cut in November. The greenback might be under more pressure if the Fed continues its aggressive easing. However, this will depend on incoming data, which might shift the outlook. Meanwhile, the Canadian dollar reached new highs on Friday after data revealed that Canadian sales jumped more than expected in July. Notably, retail sales increased by 0.9% compared to economists’ forecast of 0.6%. The data eased worries that the economy was on a rapid decline. However, it had little impact on rate cut expectations. The Bank of Canada might increase the size of rate cuts after the Fed’s massive cut. USD/CAD key events today US flash manufacturing PMI US flash services PMI USD/CAD technical forecast: Bulls bounce of channel support On the technical side, the USD/CAD price is bouncing higher after meeting its bullish channel support. The price recently has a sharp decline after meeting the channel resistance. However, it paused at the support and is now looking up. The RSI trades slightly above 50, supporting bullish momentum. -Are you looking for the best CFD broker? Check our detailed guide- However, the price is still on the lower side of the 30-SMA, which poses a big challenge. Nevertheless, since the price has been on a shallow climb, it might soon break above the SMA and the 1.3600 resistance to revisit the 1.3650 level. On the other hand, if the SMA holds firm, bears might break out of the bullish channel and reverse the trend. https://www.forexcrunch.com/blog/2024/09/23/usd-cad-forecast-dollar-rebounds-after-boj-disappoints/

2024-09-22 18:55

The US central bank implemented its first rate cut on Wednesday, sinking the dollar. Australia’s employment figures showed faster-than-expected job growth. Market participants will focus on the Reserve Bank of Australia monetary policy meeting. The AUD/USD weekly forecast supports more upside for the Aussie due to a policy divergence between the Fed and the RBA. Ups and downs of AUD/USD The Aussie had a bullish week. The dollar plunged after the Fed’s massive rate cut, while the Australian dollar surged due to upbeat domestic data. The US central bank implemented its first rate cut on Wednesday, sinking the dollar. Economists had forecasted a 25-bps cut. Before the meeting, data on sales and inflation had also suggested a small cut. However, policymakers surprised with a massive 50-bps rate cut. Meanwhile, the Australian dollar got a boost from employment figures which showed faster-than-expected job growth. A solid labor market reduces the likelihood of an RBA rate cut this year. Next week’s key events for AUD/USD Next week, market participants will focus on the Reserve Bank of Australia monetary policy meeting. They will also pay attention to the US GDP and the data on durable goods orders. A Reuters poll recently showed that economists expect the RBA to keep rates unchanged at the Tuesday meeting. Moreover, they expect the first rate cut in the first quarter of 2025. Recent data on Australia’s labor market has shown a resilient economy, reducing the likelihood of near-term rate cuts. Meanwhile, the Fed has started its easing cycle with a massive cut. Still, market participants will keep watching economic data like GDP for clues on the next rate cut. Currently, the market is pricing a 44% chance of another 50-bps cut in November. AUD/USD weekly technical forecast: Bulls make another attempt at 0.6800 On the technical side, the AUD/USD price has reached the pivotal 0.6800 resistance level. The price trades above the 22-SMA, and the RSI is above 50, supporting a bullish bias. Bulls have remained strong since the pair found support at the 0.6650 level. -Are you looking for the best CFD broker? Check our detailed guide- Although the price has closed slightly above 0.6800, the RSI shows bullish momentum is weaker than at the last attempt to break this level. Therefore, even if the price climbs higher next week, the RSI might make a bearish divergence. Still, a break above 0.6800 would allow AUD/USD to revisit the 0.6901 level. https://www.forexcrunch.com/blog/2024/09/22/aud-usd-weekly-forecast-fed-rba-divergence-pushes-bulls/

2024-09-22 18:52

The Fed cut rates by 50-bps, starting its easing cycle with a bang. Canada’s inflation eased more than expected on a monthly basis. Retail sales in Canada jumped, showing solid consumer spending. The USD/CAD weekly forecast shows a slow decline as the Fed follows the Bank of Canada in lowering borrowing costs. Ups and downs of USD/CAD The USD/CAD pair ended the week down as the dollar dropped following the FOMC policy meeting. Data before the meeting and economists’ estimates had pointed to a gradual pace for rate cuts. Meanwhile, market participants had priced a 65% chance of an aggressive start. On Wednesday, the Fed cut rates by 50-bps, starting its easing cycle with a bang. The dollar dropped against most of its peers. However, the decline against the loonie was slight since the BoC may also cut interest rates. Meanwhile, data from Canada showed a mixed picture. Inflation eased more than expected on a monthly basis. On the other hand, retail sales jumped, showing solid consumer spending. Next week’s key events for USD/CAD Next week, the US will release data on Gross Domestic Product and core durable goods. Meanwhile, Canada will only release GDP data. The US GDP data will show the health of the economy, which could influence the Fed’s policy outlook. A healthy economy could lower rate cut expectations as the Fed would not need to be too aggressive. On the other hand, if GDP shows a weak economy, it could increase expectations for a rate cut in November. Meanwhile, in Canada, the Bank of Canada might push up the size of future rate cuts, to reflect the Fed’s recent move. The GDP report will also influence the outlook for future policy moves in Canada. USD/CAD weekly technical forecast: Price action suggests bearish reversal On the technical side, the USD/CAD price trades slightly above the 22-SMA, a sign that bulls are in the lead. However, price action shows that the bias might soon shift. Notably, the RSI trades below 50, supporting bearish momentum. -Are you looking for the best CFD broker? Check our detailed guide- Furthermore, the price made a bearish engulfing candle after pausing at the 1.3600 key resistance level. It also briefly touched the 0.382 Fib retracement level which also acted as resistance. Bears might take back control in the coming week if the price breaks below the 22-SMA. USD/CAD might then fall to the 1.3450 support. A break below this level would signal a continuation of the previous downtrend. https://www.forexcrunch.com/blog/2024/09/22/usd-cad-weekly-forecast-fed-joins-boc-in-rate-cut-race/