2024-09-13 12:02

News outlets reported that a 50 bps Fed rate cut next week was a close call. Gold traders cheered the likelihood of an aggressive policy easing. The likelihood of a 50 bps September Fed rate cut increased to 45%. The gold price analysis indicates a sudden surge in bullish momentum as the yellow metal benefits from increased bets for a massive Fed rate cut. Gold rallied to an all-time high after reports that the US central bank might be ready to lower rates by 50 bps. –Are you interested to learn more about forex options trading? Check our detailed guide- On Thursday, news outlets reported that a 50 bps Fed rate cut next week was a close call. At the same time, former Fed policymaker Bill Dudley said there was a strong case for a super-sized rate cut. Consequently, gold traders cheered the likelihood of an aggressive policy easing. Lower borrowing costs increase the appeal of non-yielding gold. The increase in Fed rate cut expectations came a day after US consumer inflation showed that price pressures increased more than expected. Consequently, investors had expected a slow start to policy easing. As a result, the dollar rose, making gold more expensive. Furthermore, wholesale inflation beat forecasts, relieving pressure on the Fed to cut interest rates. However, the change late on Thursday increased the likelihood of a 50 bps rate cut to 45%. This creates more uncertainty about the FOMC meeting, as anything could happen. A smaller cut will likely disappoint investors after the recent surge in bets. Consequently, gold prices could pull back. On the other hand, a 50 bps rate cut might have little impact on gold if traders have already priced in such an outcome. Gold key events today There won’t be any high impact events to cause high volatility for gold. Therefore, traders will keep pricing in a more significant US rate cut. Gold technical price analysis: Bullish momentum pushes price out of consolidation On the technical side, gold has broken out of consolidation to make new highs. The price has rallied above the 30-SMA and is approaching the 2580.46 key level. The bullish bias is strong since the price sits far above the SMA, and the RSI is in the overbought region. –Are you interested to learn about forex robots? Check our detailed guide- Gold was trapped between the 2480.38 support and the 2520.09 resistance for a long time. However, a sudden surge in momentum allowed bulls to continue the previous bullish trend. After such a steep move, the price might retreat to the SMA before continuing higher. https://www.forexcrunch.com/blog/2024/09/13/gold-price-analysis-eying-2600-amid-probable-50-bps-cut/

2024-09-13 09:19

Former Fed official Bill Dudley said that there was a strong case for a 50 bps rate cut. The likelihood of a 50 bps rate cut shot up from 28% to 45%. BoJ board member Naoki Tamura noted that the upside risk to inflation was increasing. The USD/JPY outlook shows a free-falling dollar as markets move to price in a higher likelihood of a super-sized Fed rate cut next week. At the same time, the yen strengthened as more Bank of Japan policymakers took on a hawkish tone. –Are you interested to learn more about forex options trading? Check our detailed guide- On Thursday, the dollar fell to a fresh low for the year after reports that the Fed might consider a 50 bps rate cut at next week’s meeting. Moreover, former Fed official Bill Dudley said that there was a strong case for a 50 bps rate cut. As a result, the likelihood of a 50 bps rate cut shot up from 28% to 45%. Data on Wednesday showed that core consumer inflation beat expectations in August. Therefore, market participants increased the likelihood of a 25 bps rate cut, boosting the dollar. Furthermore, data on Friday revealed that wholesale inflation was higher than expected. Recent data has pointed to a gradual pace for rate cuts. However, the reports on Friday showed that policymakers might consider a bigger cut. Meanwhile, the yen was strong after another policymaker supported more rate hikes. BoJ board member Naoki Tamura noted that the upside risk to inflation was increasing. Higher inflation creates the best conditions for the Bank of Japan to hike interest rates. USD/JPY key events today Investors do not expect any key economic reports from the US or Japan. Therefore, the pair might extend Thursday’s move. USD/JPY technical outlook: Bearish momentum eases near the 141.02 support On the technical side, the USD/JPY price is on the brink of falling below the 141.02 support level. The bias is bearish as the price has made a series of lower highs and lows, indicating a downtrend. However, the decline has slowed near the 141.02 key level. It is becoming harder for the price to make lower lows. –Are you interested to learn about forex robots? Check our detailed guide- At the same time, the RSI has made a bullish divergence, indicating fading bearish momentum. If this is the end of the road for bears, the price might bounce higher from 14.02 to challenge the 30-SMA resistance. A break above the SMA would confirm a shift in sentiment. On the other hand, if bears remain in charge, the price will stay below the SMA. https://www.forexcrunch.com/blog/2024/09/13/usd-jpy-outlook-super-sized-fed-rate-cut-bets-reemerge/

2024-09-12 10:23

Investors expect the European Central Bank to cut borrowing costs by 25 bps. The dollar held steady after the US consumer inflation report. The CPI report suggested a slow monetary policy easing. The EUR/USD outlook suggests more downside for the euro as markets anticipate another ECB rate cut later today. Meanwhile, the dollar recovered after upbeat monthly inflation figures in the previous session. –Are you interested to learn more about forex options trading? Check our detailed guide- Investors expect the European Central Bank to cut borrowing costs by 25 bps later today. However, the focus will be on messaging for future policy moves. At the moment, markets are fully expecting another rate cut in December. Meanwhile, the likelihood of a cut in October is 37%. Therefore, investors will watch to see whether policymakers are ready to cut again in October. Such an outcome would weigh on the euro. The eurozone economy has slowed down significantly, and inflation has cooled. Consequently, there is little holding the ECB from lowering borrowing costs. Meanwhile, the dollar held steady after the US consumer inflation report. Core inflation jumped by an unexpected 0.3% in August, reducing the likelihood of a massive rate cut in September. Meanwhile, the annual figure eased to 2.5%, a step closer to the US central bank’s target. The CPI report was bullish for the dollar as it suggested a slow monetary policy easing. With no major reports before next week’s meeting, there is a high chance the Fed will cut rates by 25 bps. However, things might change in the future. The labor market is declining, and demand has slowed in the economy. Therefore, there is still a risk of a rapid slide. Any indications of a quick decline could renew bets for a 50 bps cut after September. EUR/USD key events today ECB policy meeting US wholesale inflation report EUR/USD technical outlook: Bears eying 1.0950 On the technical side, the EUR/USD price is making new lows below the 1.1050 key support level. The bias is bearish since the price trades below the SMA, and the RSI trades in bearish territory below 50. –Are you interested to learn about forex robots? Check our detailed guide- After breaking the previous low, the price will likely extend to the 1.618 Fib level, which sits near the 1.0950 support level. The downtrend might pause here before returning to the SMA or breaking below. However, the price might keep consolidating below 1.1050 until there is a strong catalyst. https://www.forexcrunch.com/blog/2024/09/12/eur-usd-outlook-set-for-more-losses-as-ecb-rate-cut-looms/

2024-09-12 09:06

The US consumer inflation report showed a 0.3% jump in core inflation in August. The likelihood of a supersized 50 bps rate cut fell to 15%. The UK economy stagnated in July with no expansion. The GBP/USD forecast shows bears in the lead as the dollar firms after a jump in US core inflation. At the same time, the pound continued declining after data earlier in the week showed no economic expansion. –Are you interested to learn more about forex options trading? Check our detailed guide- In August, the long-awaited US consumer inflation report showed a 0.3% jump in core inflation, bigger than the forecast of a 0.2% increase. Consequently, this lowered the likelihood of a supersized 50-bps rate cut to 15%. The dollar strengthened at the prospect of a gradual pace in rate cuts. Nevertheless, the annual figure eased to 2.5%, approaching the Fed’s 2% target. Therefore, inflation is on a clear downtrend. However, there is little pressure for the Fed to start with a massive cut. However, there is still a risk that data after the September meeting will change and show a rapid decline. In such a case, the Fed might consider bigger rate cuts. Investors will now watch wholesale inflation data due later today for more clues on the state of price pressures in the US. Elsewhere, data on Tuesday revealed that the UK economy stagnated in July with no expansion. Meanwhile, economists had expected the economy to expand by 0.2%. The report showed weaker-than-expected performance, raising the chances of a Bank of England rate cut next week to 25%. Consequently, the pound fell. GBP/USD key events today US core PPI m/m US PPI m/m Unemployment Claims GBP/USD technical forecast: Shallow downtrend meets 1.3000 hurdle On the technical side, the GBP/USD price has fallen to the 1.3000 support level before pulling back slightly. Bears have remained in control since price action showed a surge in momentum with a solid bearish candle near the 1.3200 resistance level. –Are you interested to learn about forex robots? Check our detailed guide- At the same time, the indicators support a bearish bias, with the SMA sitting above the price and the RSI under 50. However, the price is sticking close to the SMA, a sign that bears are not making large swings. Therefore, it might be hard to breach the 1.3000 support. Nevertheless, the bearish bias will remain if the price stays below the SMA. https://www.forexcrunch.com/blog/2024/09/12/gbp-usd-forecast-stubborn-us-core-inflation-lifts-dollar/

2024-09-11 10:34

The BoJ will keep hiking interest rates if inflation comes in as expected. Economists predict at least one rate hike before the end of the year. Investors are gearing up for the US Consumer Price Index report. The USD/JPY forecast shows renewed bearish momentum after the yen gained over 1% against the dollar after hawkish Bank of Japan remarks. At the same time, the dollar was fragile a day after the US presidential debate showed that Kamala Harris was in a stronger position. –Are you interested to learn more about forex options trading? Check our detailed guide- On Wednesday, Bank of Japan board member Junko Nakagawa said the central bank will keep hiking interest rates if inflation comes in as expected. She also said last month’s volatility had not changed the BoJ’s goal for higher interest rates. Higher borrowing costs in Japan will reduce the gap in rates between the US and Japan, boosting the yen. Nevertheless, investors do not expect the central bank to hike this month. Meanwhile, economists predict at least one such move before the end of the year. The yen also gained because the US presidential debate weakened the dollar. The debate added bets to a Kamala win and removed from Trump, reducing the likelihood of higher tariffs and increased government spending. The idea of a Trump win has always boosted the dollar since it could boost interest rates. Meanwhile, investors are gearing up for the US Consumer Price Index report, which could give more guidance on the size of the next Fed rate cut. Economists expect inflation to reach the 2% target, with the headline figure hitting 2.9%. A softer-than-expected print could lead to a more dovish Fed. On the other hand, steady figures could suggest a gradual rate-cutting cycle. USD/JPY key events today US core CPI m/m US CPI m/m US CPI y/y USD/JPY technical forecast: Bullish RSI divergence On the technical side, the USD/JPY price has made a new low after breaking below the 142.00 support level. The price trades well below the 30-SMA, indicating a bearish bias. At the same time, the RSI supports bearish momentum below 50. –Are you interested to learn about forex robots? Check our detailed guide- However, it has made a bullish divergence. While the price has made a lower low, the RSI has made a higher one. This shows that bearish momentum is fading. In that case, the price might soon retrace to the 30-SMA to challenge the bearish trend. https://www.forexcrunch.com/blog/2024/09/11/usd-jpy-forecast-bank-of-japans-hawkish-tone-fuels-yen-rally/

2024-09-11 09:08

The presidential debate on Tuesday weighed on the dollar as Kamala Harris came out stronger. Analysts expect cooler US price pressure at 2.6% on an annual basis. The Canadian dollar lost ground in the previous session as oil prices fell. The USD/CAD price analysis shows a mild retracement amid a bullish trend as the dollar falls after the US presidential debate. Meanwhile, investors remained cautious ahead of US inflation data, which could give clues on the outlook for Fed rate cuts. –Are you interested to learn more about forex options trading? Check our detailed guide- The presidential debate on Tuesday weighed on the dollar as Kamala Harris came out stronger. The dollar prefers a Trump win as tariffs and government spending would increase, boosting interest rates. However, after the debate, bets for a Trump win fell. Meanwhile, investors remained cautious ahead of the US CPI report. Analysts expect cooler price pressure at 2.6% on an annual basis. Meanwhile, on the monthly, inflation will likely hold steady at 0.2%. If price pressures drop significantly, bets for a 50 bps rate cut will increase, putting pressure on the dollar. On the other hand, if inflation supports a gradual rate-cutting cycle, the dollar might edge higher. Currently, there is a 67% chance of a 25 bps rate cut. The CPI report will give more clues on the size of the rate cut at the FOMC policy meeting next week. Elsewhere, the Canadian dollar lost ground in the previous session as oil prices fell. Demand concerns have put a lot of pressure on fuel. At the same time, Bank of Canada Governor Tiff Macklem gave a speech saying there was a chance of more significant rate cuts if growth misses forecasts. USD/CAD key events today Core CPI m/m CPI m/m CPI y/y USD/CAD technical price analysis: Bullish momentum pauses at 1.3600 resistance On the technical side, the USD/CAD price has paused its rally near the 1.3600 resistance level. Bulls briefly punctured the level before pulling back below. Nevertheless, the bullish bias remains as the price trades above the 30-SMA. At the same time, the RSI sits in bullish territory above 50. –Are you interested to learn about forex robots? Check our detailed guide- If the pullback continues, the price will likely soon revisit the 30-SMA support. However, if bulls retain control, it will bounce off the SMA to retest the 1.3600 resistance level. A break above 1.3600 will clear the path for the price to climb to the 1.3701 resistance level. https://www.forexcrunch.com/blog/2024/09/11/usd-cad-price-analysis-dollar-weakens-post-debate/