2023-06-28 09:58

Canada’s annual inflation rate decreased to 3.4% from April’s 4.4%. Money markets perceive a roughly 60% likelihood of a BOC rate hike in July. Oil fell amid demand worries as the ECB plans more rate hikes. Today’s USD/CAD price analysis is bullish. The Canadian dollar lost strength against the US dollar following data that revealed a slowdown in Canada’s inflation. Notably, inflation reached its lowest rate in two years. Canada’s annual inflation rate decreased to 3.4% in May from April’s 4.4%. After considering the data, money markets now perceive a roughly 60% likelihood of a rate hike during the Bank of Canada’s upcoming policy decision on July 12. This is a slight decrease from the previous 64%. Earlier this month, the central bank implemented its first tightening since January. Surprisingly, it raised its policy rate by 25 basis points to a 22-year high of 4.75%. Moreover, the Canadian currency’s decline coincided with a 2.4% drop in the price of oil, one of Canada’s key exports. This decrease was influenced by signals suggesting that the European Central Bank has further interest rate hikes planned. Elsewhere, data indicated an increase in US consumer confidence in June to its highest level in almost 1.5 years. At the same time, business spending remained steady in May, indicating a robust economic foundation. The recent influx of data reinforced the belief in the resilience of the US economy and alleviated concerns about a potential recession. However, it also suggested that the Federal Reserve may need to continue raising interest rates. USD/CAD Key Events Today Investors will be watching Powell’s speech at the European Central Bank Forum. The Fed Chair might drop some clues on future rate hikes. Furthermore, there will be a crude oil inventories report from the US that might impact the loonie. USD/CAD Technical Price Analysis: Bulls Are In The Lead After A Break Above 1.3200. USD/CAD 4-hour chart USD/CAD has experienced a shift in sentiment in the 4-hour chart. Bulls have taken control by breaking above the 30-SMA resistance. At the same time, bullish momentum has strengthened, with the RSI crossing over 50. Furthermore, the price has broken above the 1.3200 resistance level, a sign of strength in the bullish move. With this new bias, the price will likely start seeking higher highs. Therefore, we might see a retest of the 1.3301 resistance. https://www.forexcrunch.com/usd-cad-price-analysis-eased-cad-cpi-lowers-boc-hike-bets/

2023-06-28 09:57

Australia experienced a slowdown in consumer inflation in May. There is a lower chance of a June RBA rate hike. The RBA has increased interest rates by 400 basis points to 4.1% since May last year. Today’s AUD/USD forecast is bearish. Australia experienced a slowdown in consumer inflation in May, reaching a 13-month low. A significant decline primarily influenced fuel prices. Furthermore, this deceleration in inflation, coupled with a cooling of core inflation, indicates that there may not be a need for further interest rate hikes in July. According to data on Wednesday, the monthly consumer price index rose by 5.6% in the year leading up to May. This marked the smallest growth since April of the previous year. This figure is notably lower than the previous month’s 6.8% and falls well below market expectations of 6.1%. Consequently, market sentiments adjusted to reflect a reduced rate hike probability in July, now estimated at 30%. Moreover, there is speculation that interest rates are more likely to peak at 4.35% instead of the previously anticipated 4.6%. Notably, the Reserve Bank of Australia had increased interest rates by 400 basis points to 4.1% since May of the previous year. However, the potential upward risks to inflation have prompted the central bank to adopt a cautious approach in recent months, indicating the possibility of further rate increases. Despite these circumstances, some factors go against a pause in rate hikes next week. One closely monitored measure of prices, excluding volatile elements and holiday travel, only experienced a slight slowdown from 6.5% to 6.4%. AUD/USD Key Events Today Federal Reserve Chair Jerome Powell is set to speak at an ECB forum later in the day. Investors will watch this speech as it might contain hints on future monetary policy moves. AUD/USD Technical Forecast: New Lows Strengthening The Bearish Bias. AUD/USD 4-hour chart AUD/USD has hit new lows in the downtrend in the 4-hour chart. This has strengthened the bearish bias as the RSI has moved closer to the oversold region. At the same time, the price has gone farther below the 30-SMA, showing bears are in charge. Bears have broken below the 0.6650 support level, which paves the way for a retest of the 0.6600 support level. The bearish bias will stay strong if the price stays below the 30-SMA. https://www.forexcrunch.com/aud-usd-forecast-australian-inflation-hits-13-month-lows/

2023-06-27 09:48

The Japanese yen weakened beyond 143 yen against the dollar. Monetary policy divergence between Japan and the US keeps growing. Japan will consider all available options to respond to excessive currency movements. Today’s USD/JPY forecast is bullish. The Japanese yen weakened beyond 143 yen against the dollar, reaching a seven-month low. There has been renewed selling pressure on the Japanese currency, often considered a safe-haven asset. Consequently, it poses a threat of increased import costs that could negatively impact consumers. Notably, the divergence in monetary policies between the Bank of Japan and the US Federal Reserve is seen as a driving force behind the strengthening of the dollar. While Japan continues implementing easing measures, the Fed has adopted an aggressive tightening policy. Elsewhere, Masato Kanda, Japan’s top currency diplomat, stated that Japan would consider all available options to appropriately respond to excessive currency movements. Furthermore, he intensified warnings against the yen’s recent rapid and one-sided weakening. While speaking to reporters, the vice finance minister for international affairs emphasized the importance of currencies moving in a stable manner. Moreover, they should reflect their underlying fundamentals. In October, Japan conducted a rare intervention by buying the yen to curb its weakening. The currency had reached a 32-year low of nearly 152 yen against the dollar. When asked about the possibility of currency intervention, Kanda said he would not disregard any options. Investors have been selling yen following the BOJ’s decision to maintain ultra-low interest rates on June 16. Furthermore, the BOJ committed to sustaining significant stimulus. in contrast, other central banks are tightening monetary policy to address rising inflation. USD/JPY Key Events Today Investors will not get any key economic releases from Japan or the US today. Therefore, the pair will likely consolidate. USD/JPY Technical Forecast: Bullish Trend Eyes The Next Resistance At 144.00. USD/JPY 4-hour chart On the 4-hour chart, USD/JPY is on a strong bullish trend, breaking above resistance levels and making new highs. The price has also stayed above the 30-SMA for a long time, respecting it as support. Additionally, the RSI has not gone below 50 in all that time, supporting bullish momentum. With a strong bullish candle, the price broke above the 143.00 resistance and is currently retracing the move. However, bears have not shown any strength. This will likely allow bulls to retest and take out the 144.00 resistance. https://www.forexcrunch.com/usd-jpy-forecast-yen-hits-7-month-low-as-trend-intensifies/

2023-06-27 09:47

The ECB will likely continue raising interest rates even as the economy slows. The ECB raised interest rates to their highest level in 22 years. ECB’s Kazaks pushed back against market speculations about ECB rate cuts. Today’s EUR/USD outlook is bullish. On Tuesday, ECB policymaker Martins Kazaks stated that the European Central Bank would likely continue raising interest rates even as the economy slows down, citing persistently high inflation. Notably, economic surveys for the Eurozone and Germany have shown weakness. This is due to increased borrowing costs and China’s underwhelming economic performance after the relaxation of COVID restrictions. Still, Kazaks, the Latvian central bank governor, expressed his belief that the Eurozone economy would experience a slowdown or stagnation rather than a contraction. According to him, this should not deter the ECB from its efforts to combat high inflation. Earlier this month, the ECB raised interest rates to their highest level in 22 years. Furthermore, it indicated that another rate hike in July, the ninth consecutive one, was almost certain. This is because inflation is expected to remain above the 2% target until 2025. Kazaks joined a growing faction of policy hawks who anticipate the upcoming rate hike in July will not be the final one. Additionally, he argued that the risks associated with taking insufficient action outweighed the risks of being too aggressive. Moreover, Kazaks pushed back against market speculations about rate cuts by the ECB in the first half of next year. He emphasized that the first rate cut would occur “much later” than the market anticipated. EUR/USD Key Events Today Investors are awaiting several major economic releases from the US. These include building permits, core durable goods orders, CB consumer confidence, and new home sales. These releases will show the state of the US economy. EUR/USD Technical Outlook: Bulls Fight To Resume The Bullish Trend. EUR/USD 4-hour chart On the charts, the EUR/USD is on the brink of a break above the 30-SMA. This comes after the price bounced off the 1.0851 support level and broke above the 1.0900 resistance level. Additionally, the price is currently at a pivotal level, where the bias could go either way. Therefore, if bulls break above the SMA and the RSI is above 50, the bias will turn bullish, allowing the price to retest 1.1000. However, if the price respects the 30-SMA as resistance, the bearish bias will continue with a break below the 1.0851 support. https://www.forexcrunch.com/eur-usd-outlook-more-hawkish-ecb-remarks-support-the-euro/

2023-06-23 04:02

The bias remains bearish as long as it stays below the upper median line (uml). The BOE should bring sharp movements. The median line (ml) represents a major target. The gold price is trading at $1,926 at the time of writing, with a solid bearish trend. The bias remains bearish, so more declines are highly probable. Greenback’s corrective upside forced the gold to slip from yesterday’s gains. Last day, the United Kingdom reported higher inflation. The CPI came in at 8.7% versus 8.4% estimated, while Core CPI reported a 7.1% growth, exceeding the 6.8% growth forecasted. Gold turned to the downside again as Fed Chair Powell announced potential new hikes till the end of the year. Today, the Swiss National Bank increased the SNB Policy Rate from 1.50% to 1.75%, as expected, so the price of gold could slip lower. Further hikes are expected, so XAU/USD could hit new lows in the short term after this announcement. Later, the Bank of England delivered a 50-bps hike. The Official Bank Rate increased to 5.00% from 4.50%. The MPC members voted by a majority of 7 to 2 for this decision. Furthermore, the Unemployment Claims could drop from 262K to 261K in the previous reporting period. The current account is expected at -214B. Existing Home Sales may drop to 4.25M from 4.28M. At the same time, the CB Leading Index could report a 0.8% drop. Poor US data should weaken the USD and could lift the XAU/USD. On the contrary, better-than-expected US data should push the yellow metal toward new lows. Gold price technical analysis: Bears keeping charge Gold price hourly chart Technically, the price of gold retested the 50% ($1,935) retracement level, and now it has turned to the downside. Now, it has retested the weekly pivot point of $1,931, signaling more declines. The bias is bearish as long as it stays below the upper median line (uml). Testing this dynamic resistance and registering false breakouts may announce a new sell-off. As long as it stays within the pitchfork’s body, the rate could approach and reach the median line (ml). https://www.forexcrunch.com/gold-price-slips-below-1930-despite-dollar-weakness/

2023-06-23 03:59

Fed Chair Powell adhered to his customary messaging during his testimony. The BoE will likely raise interest rates for the 13th consecutive time on Thursday. British inflation persisted in May, holding steady at 8.7%. Today’s GBP/USD forecast is bullish. On Thursday, the dollar remained close to a one-month low against various currencies. Fed Chair Jerome Powell adhered to his customary messaging during his semi-annual testimony, leaving little room for surprises. Notably, Powell stated that if the economy continues on its current trajectory, it is “a pretty good guess” that the Fed will pursue further rate hikes. These remarks align with the central bank’s statements from its recent policy meeting. On the other hand, the pound hovered near a one-year high, ahead of the Bank of England’s interest rate decision later in the day. The recent inflation report showed higher-than-expected figures and will likely keep policymakers alert. Consequently, the BoE will likely raise interest rates for the 13th consecutive time on Thursday. However, traders hold differing views regarding the magnitude of the hike. While some lean towards a 25-basis-point increase, others consider a 50-basis-point hike. Notably, British inflation persisted in May and did not ease, holding steady at 8.7%. It defied market expectations and surpassed the inflation rates of other major economies. Economists at ANZ stated that the robust UK inflation figure had heightened the likelihood of a rate hike larger than 25 basis points. Furthermore, it raised the potential for a higher terminal rate and a prolonged period of elevated rates. GBP/USD Key Events Today Investors have a big day ahead as they await the Bank of England monetary policy meeting. A hawkish tone could see GBP/USD rise. Additionally, they will continue listening to Fed Chair Jerome Powell’s testimony to Congress. GBP/USD Technical Forecast: Capped By The 30-SMA As Resistance GBP/USD 4-hour chart After breaking below the 30-SMA on the 4-hour chart, GBP/USD has risen to retest the SMA. It is now looking to resume the bearish move and retest the 1.2700 support level. With the price below the 30-SMA and the RSI slightly under 50, the bias for GBP/USD is slightly bearish. Bears must break below 1.2700 and start making lower lows and highs to strengthen the bias. However, if they fail to do this, the price will likely resume the uptrend by breaking above the 30-SMA and the 1.2800 resistance. https://www.forexcrunch.com/gbp-usd-forecast-gaining-back-to-1-28-ahead-of-boe-meeting/