2023-10-05 10:10
US private payrolls rose significantly less than expected in September. Longer-term US Treasury yields fell following the US employment report. Data from the Bank of Japan’s money market showed that Japan did not intervene in the FX market. Thursday’s USD/JPY forecast is bearish as the yen found much-needed relief as the dollar weakened in response to mixed US economic data. The data caused investors to dial back their expectations of the Fed raising interest rates again this year. The greenback relinquished some of its recent gains after Wednesday’s ADP National Employment Report revealed that US private payrolls had increased significantly less than anticipated in September. However, analysts cautioned that more evidence was required to determine the speed at which the labor market was cooling. Moreover, following the release of this data, longer-term US Treasury yields, which had reached 16-year highs, eased and remained lower. Moh Siong Sim, a currency strategist at Bank of Singapore, noted, “There are some indications that the US labor market is cooling down further,” However, he emphasized that it was still too early to draw definitive conclusions. Furthermore, he highlighted the significance of closely monitoring Friday’s non-farm payrolls report. Additionally, he noted, “The bigger picture is that overall US growth has been slowing. However, it’s been slowing at a pace slower than expected.” Dollar/yen, a currency pair sensitive to US yields, was last seen trading around 148.53, reflecting a decrease of approximately 0.4%. Notably, the yen had reached 150.165 on Tuesday, its weakest level since October 2022. Speculation had arisen earlier that Japanese authorities might have intervened to support the yen’s sharp recovery after it breached the 150-line. However, data from the Bank of Japan’s money market indicated on Wednesday that Japan had likely not intervened. USD/JPY key events today Investors will receive one major report from the US. The initial jobless claims report. USD/JPY technical forecast: Price revisits 148.51 support level. USD/JPY 4-hour chart On the technical side, the USD/JPY price has retested the 148.51 support level, where bulls have resurfaced. Still, bears are now in control as the price has settled below the 30-SMA and the RSI below 50. Therefore, the pause at the 148.51 level might only be temporary. As long as the price stays below the 30-SMA, bears will keep control, likely breaking below 148.51. A break below this level would clear the path for a drop to the 147.51 support. https://www.forexcrunch.com/usd-jpy-forecast-yen-finds-relief-as-dollar-weakens/
2023-10-05 10:09
Mixed economic data pointed to pockets of weakness within the world’s largest economy. US factory orders showed a 1.2% increase in August, surpassing the anticipated 0.2% rise. The Eurozone reported a much steeper decline in retail sales than expected for August. On Thursday, the EUR/USD outlook was bullish as the euro rose with the dollar’s decline in response to the retreating US Treasury yields. The decline reflected mixed economic data that pointed to pockets of weakness within the world’s largest economy. Consequently, it reduced the likelihood of the Federal Reserve implementing another interest rate hike before the end of the year. On Wednesday, the dollar index, which gauges the greenback’s performance against six major currencies, registered a 0.3% drop to 106.69, relinquishing some of its recent gains. This decrease followed disappointing US private payroll data from the ADP National Employment Report. Nevertheless, the index remained close to its nearly 11-month high of 107.34, achieved in the previous session. However, the dollar managed to recover partially from its losses when US factory orders showed a 1.2% increase in August, surpassing the anticipated 0.2% rise. Meanwhile, the euro gained, although it remained relatively close to its Tuesday low of $1.0448, which marked its weakest level since December. This decline in the euro sparked discussions of a potential further drop to $1. Still, the euro rose on Thursday despite the Eurozone reporting a much steeper decline in retail sales than expected for August. Moreover, there is a higher likelihood of the bloc’s economy contracting in the previous quarter. EUR/USD key events today Although the Eurozone will not release any major reports today, the US will release one important one. The initial jobless claims report. Get FREE Forex Signals Now! EUR/USD technical outlook: Bulls challenge prevailing bearish bias. EUR/USD 4-hour chart On the charts, the EUR/USD price trades at a pivotal level slightly below the 30-SMA. At the same time, the RSI trades near the pivotal 50 line, separating bullish from bearish territory. Therefore, although the bias is down, bulls are challenging the downtrend. Currently, the price is trading in a tight consolidation between the 30-SMA resistance and the 1.0500 support level. A breakout above the resistance would signal a bullish takeover, allowing the price to retest the 1.0600 resistance. On the other hand, a breakout below the support level would see bears retesting the 1.0450 support level. https://www.forexcrunch.com/eur-usd-outlook-soft-treasury-yields-weigh-on-the-dollar/
2023-10-04 10:05
The bias remains bearish as long as it stays below the lower median line (lml). 1,809 is seen as a major target. The US economic figures could shake the price later today. The gold price rebounded after reaching today’s low of $1,815. Now, the metal is trading at $1,825 at the time of writing. The downside pressure remains high. It shows that more declines could be expected despite corrective upsides. The US dollar’s upside “exceptionalism” forced the yellow metal to extend the bearish momentum far below the key levels. Fundamentally, the XAU/USD took a hit from the US data yesterday. The ISM Manufacturing PMI came in at 49.0, above the 47.8 expected, while the Final Manufacturing PMI jumped from 48.9 points to 49.8 points. Also, Fed Chair Powell’s remarks pushed the yellow metal to new lows. Today, the Reserve Bank of Australia maintained the Cash Rate at 4.10% as expected. Gold also ticked higher because the Switzerland CPI reported a 0.1% drop versus the 0.0% growth estimated after the 0.2% growth in the previous reporting period. Later, the US data could bring life to the XAU/USD. JOLTS Job Openings are expected at 8.81M in August versus 8.83M in July. Wards Total Vehicle Sales could be reported at 15.4M compared to 15.0M in August, while IBD/TIPP Economic Optimism could drop to 41.6 points. Tomorrow, the RBNZ and the US ADP Non-Farm Employment Change, ISM Services PMI, and Factory Orders should move the rate. Gold Price Technical Analysis: Bears Looking for $1,809 Gold price hourly chart The XAU/USD extended its sell-off after registering a false breakout through the median line (ml) of the descending pitchfork on Friday. The flag pattern broke and triggered a strong downside continuation. It has dropped below the lower median line (LML), representing a downside target, and under the weekly S1 (1,821). It has rebounded and challenged the lower median line (LML) again. This stands as a dynamic resistance (support turned into resistance). As long as it stays below it, the bias remains bearish. 1,809 historical level is seen as a major target if the rate continues to drop. https://www.forexcrunch.com/gold-price-gains-slight-from-multi-month-low-eyes-on-us-jolts/
2023-10-04 10:04
There is speculation that Japanese authorities may have intervened to support the yen. The dollar remained strong in the overall currency market. There was an unexpected rise in US job openings in August. The USD/JPY forecast for Wednesday is bearish, as the yen experienced a sudden and short-lived spike that triggered rumors of a possible intervention by the Bank of Japan to support the currency. During Asian trade, the Japanese currency slightly decreased after spiking by nearly 2% on Tuesday to reach 147.30. This sudden increase occurred after the yen had slipped to 150.165 per dollar, its weakest point since October 2022. James Malcolm, UBS’s head of FX strategy, stated, “Their intervention in this situation aligns perfectly with recent warnings from top officials and their historical actions.” Additionally, he noted that while authorities may not be able to reverse trends in the FX markets immediately, significant intervention sends a strong signal. Moreover, it allows time for other factors to align, eventually contributing to position adjustments. On Wednesday, Japanese Finance Minister Shunichi Suzuki emphasized that authorities would take appropriate measures to counter excessive movements in the yen. Meanwhile, Masato Kanda, Japan’s top currency diplomat, refrained from commenting on whether Tokyo had intervened. Still, he noted that any actions taken had the understanding of US authorities. US Treasury Secretary Janet Yellen had previously mentioned that the US response to Japan’s yen-buying intervention would depend on the specific details of the situation. Meanwhile, after positive data on Tuesday, the dollar remained strong in the overall currency market. This data revealed an unexpected rise in US job openings in August. The rise came amid a significant increase in demand for professional and business service workers. USD/JPY key events today Markets are awaiting data from the US on: Private US employment change. S&P Global services PMI. ISM non-manufacturing PMI USD/JPY technical forecast: Key resistance at 150.00 triggers a sharp decline. USD/JPY 4-hour chart Sentiment on the 4-hour chart has shifted from bullish to bearish. The USD/JPY pair dropped sharply after it touched the 150.00 key resistance level. This sharp move saw the price break below the 30-SMA, with the RSI dipping below 50 to support bearish momentum. Bears are currently in control of the market. Moreover, the price currently trades with the nearest resistance at 149.50 and the nearest support at 148.51. With the new bearish bias, we could soon see the price break below the 148.51 support level. https://www.forexcrunch.com/usd-jpy-forecast-yen-surge-sparks-speculation-of-intervention/
2023-10-04 10:04
Data indicated an unexpected increase in US job openings in August. Payroll data on Friday will clarify the strength of the US labor market. The euro experienced a 3% decline against the dollar in the third quarter. The Greenback maintained strength following positive data released Tuesday, leading to a bearish EUR/USD price analysis for Wednesday’s session. Notably, data indicated an unexpected increase in US job openings in August, particularly in the professional and business services sector. Rodrigo Catril, senior FX strategist at National Australia Bank, noted that this development rattled the markets. Moreover, it supported the Federal Reserve’s perspective of keeping interest rates higher for an extended period. The surge in job openings suggests that the US labor market is not deteriorating as rapidly as previous data had implied. However, some aspects of the report do not necessarily indicate a robust labor market. Job openings increased by 690,000 to 9.610 million at the end of August, marking the highest level in just over two years. Looking ahead, Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina, mentioned that the upcoming payroll data on Friday will provide further clarity regarding the labor market’s strength. A stronger-than-expected report could be concerning for the central bank. Meanwhile, the euro, trading at its lowest levels this year, near $1.05, experienced a 3% decline against the dollar in the third quarter. This decline sets the stage for a third consecutive year of losses. The main reason for this decline is the US dollar’s overall strength amid the US economy’s resilience. EUR/USD key events today Investors will receive several crucial reports from the US, including: The ADP nonfarm employment change. The S&P Global services PMI. The ISM non-manufacturing prices. The ISM non-manufacturing PMI. Get FREE Forex Signals Now! EUR/USD technical price analysis: Downtrend meets solid support. EUR/USD 4-hour chart On the charts, the EUR/USD price has declined to the 1.0450 support level, where the price has paused. The bias is bearish as bears made a lower low when they broke below the 1.0500 support level. However, the downtrend has encountered a strong support level that could lead to a deep pullback or reverse the trend. Moreover, bears have weakened at the 1.0500 key support. This weakness is seen in the RSI, which has made a bullish divergence. Therefore, bears would need to regain momentum to break below 1.0500. Otherwise, bulls might return to challenge the 30-SMA resistance. https://www.forexcrunch.com/eur-usd-price-analysis-upbeat-job-openings-weigh-on-euro/
2023-09-29 04:10
Fed officials warned the markets about the potential for additional interest rate hikes. Fed Chair Jerome Powell will deliver a speech on Thursday. The Canadian dollar strengthened on Wednesday with rising oil prices. The current USD/CAD forecast is bullish amid growing apprehensions about persistently elevated interest rates, which have driven investors to find safety in the dollar. Federal Reserve Bank of Minneapolis President Neel Kashkari and several other Federal Reserve officials warned the markets about the potential for additional interest rate hikes. On Wednesday, Kashkari emphasized that substantial evidence indicated the economy’s continued strength. Consequently, this strength suggested that further tightening measures might be on the horizon. Furthermore, Fed Chair Jerome Powell will deliver a speech on Thursday. This event could provide additional insights into the direction of US monetary policy. Additionally, it might offer markets further guidance on what to expect regarding interest rate adjustments. Concurrently, traders closely monitored efforts by lawmakers to prevent a US government shutdown. Meanwhile, the Canadian dollar experienced a slight increase against its US counterpart on Wednesday amid a surge in oil prices. This recovery came after the currency had touched its lowest level in nearly two weeks. Erik Bregar, Director of FX & Precious Metals Risk Management at Silver Gold Bull, noted that the Canadian dollar had fluctuated due to rising oil prices and falling stock prices. Furthermore, he observed that the past week had been challenging, primarily due to the sharp increase in US bond yields, prompting a broader shift in the FX market towards the US dollar. USD/CAD key events today Investors are awaiting several major releases from the US, including the following: US GDP. Initial jobless claims. Pending home sales report. Fed Chair Powell speech. USD/CAD technical forecast: Price tests crucial 30-SMA support. USD/CAD 4-hour chart On the technical side, the USD/CAD pair has pulled back and is retesting the 30-SMA support. At the same time, the RSI has fallen to the pivotal 50 mark and seems ready to bounce higher. The bias for the pair is bullish as the price trades slightly above the 30-SMA. Moreover, the price recently made a higher high above the 1.3501 key level. If the 30-SMA holds firm as support, the price will soon bounce higher with the next target at the 1.3550 resistance level. On the other hand, a break below the SMA would indicate a reversal to the downside. https://www.forexcrunch.com/usd-cad-forecast-interest-rate-worries-fuel-dollar-demand/
