2024-08-20 10:15

The Canadian dollar rallied as risk sentiment improved. Economists expect Canada’s inflation to ease from 2.7% to 2.5% in July. Traders will focus on Powell’s speech at the end of the week for guidance on the Fed’s policy outlook. The USD/CAD price analysis leans South as the Canadian dollar trades near a five-week high amid improved risk sentiment. At the same time, investors are awaiting Canada’s inflation report, which could shape the outlook for BoC rate cuts. -Are you interested in learning about the forex signals telegram group? Click here for details- The Canadian dollar rallied on Tuesday, making new highs as risk sentiment improved. The loonie gained with US equities due to optimism about the US economy. Last week, data dismissed fears that the US economy was on the verge of a recession. At the same time, Fed rate cut expectations improved the outlook for the economy, supporting Wall Street and the Canadian dollar. Meanwhile, investors eagerly await Canada’s inflation report for more clues on the Bank of Canada’s rate cut outlook. Economists expect inflation to ease from 2.7% to 2.5% in July. The Bank of Canada has already implemented two rate cuts. If inflation continues cooling, the central bank might cut again in September. On the other hand, the US dollar was weak as markets increasingly bet on a Fed rate cut in September. Inflation figures last week met expectations, showing a gradual decline to the Fed’s 2% target. As such, policymakers might be ready to signal a rate cut in September. Traders will focus on Powell’s speech at the end of the week for guidance on the Fed’s policy outlook. Additionally, the FOMC meeting minutes will show policymakers’ stance on rate cuts and inflation. USD/CAD key events today Canada CPI m/m Canada median CPI y/y Canada trimmed CPI y/y USD/CAD technical price analysis: Strong bearish momentum heads for 1.3601 support On the technical side, the USD/CAD price has fallen sharply after retesting the 30-SMA and breaking below the 1.3700 support level. The 30-SMA sits well above the price and points down, indicating a steep downtrend. Meanwhile, the RSI has fallen below 30 into the oversold region. -If you are interested in forex day trading then have a read of our guide to getting started- Given the solid bearish bias, the decline might soon challenge the 1.3601 support level. If the level holds firm, the price will pull back to retest the 30-SMA or its bearish trendline. On the other hand, if the level gives way, USD/CAD will make new lows, continuing the downtrend. https://www.forexcrunch.com/blog/2024/08/20/usd-cad-price-analysis-hits-5-week-top-amid-risk-on/

2024-08-20 08:52

RBA policymakers considered a rate hike at the last meeting. Markets imply an 84% chance of an RBA rate cut in December. Markets are pricing a 75.5% chance of a 25 bps Fed rate cut in September. The AUD/USD outlook shows bullish enthusiasm, with the Aussie climbing after hawkish Reserve Bank of Australia policy meeting minutes. Meanwhile, the US dollar weakened as investors bet on a September rate cut ahead of Powell’s Jackson Hole speech. -Are you interested in learning about the forex signals telegram group? Click here for details- Minutes from the last RBA meeting, released on Tuesday, showed that policymakers had almost hiked rates due to high underlying inflation. However, after debating the risks, they decided to keep rates unchanged. The RBA is trying to balance inflation and the labor market. Higher rates could dent the jobs sector and hurt the economy. Meanwhile, the central bank will be forced to delay rate cuts if inflation remains high. The minutes dashed hopes for a near-term rate cut. Nevertheless, markets imply an 84% chance of a rate cut in December and another in February next year. Meanwhile, the outlook for the Fed is different. Inflation is easing as expected. At the same time, although the economy is slowing down, pockets of strength remain. Therefore, the Fed is poised to deliver a quarter-point rate cut in September. Markets are pricing a 75.5% chance of a 25 bps rate cut. However, this outlook might change when Powell speaks at the Jackson Hole symposium. If he signals a rate cut, expectations will increase. On the other hand, if he maintains caution, rate-cut bets might fall. AUD/USD key events today It might be a quiet day for the pair since there won’t be any key reports from the US or Australia. AUD/USD technical outlook: Bullish trend nears 0.6800 level On the technical side, the AUD/USD price has broken above the 0.6700 resistance level. The bullish bias is strong as the price has risen far above the 30-SMA. At the same time, the RSI sits in the overbought region, indicating massive bullish momentum. -If you are interested in forex day trading then have a read of our guide to getting started- After such sharp moves, the price usually pulls back to retest the 30-SMA before bulls regain strength. If this happens, AUD/USD falls below 0.6700 before continuing higher. On the other hand, it might pause above 0.6700 as the SMA catches up. The next target for bulls is at the 0.6800 level. https://www.forexcrunch.com/blog/2024/08/20/aud-usd-outlook-hawkish-rba-minutes-boost-aussie/

2024-08-19 10:12

UK retail sales rose 0.5% in July after dropping by 0.9% the previous month. UK GDP data revealed an expected 0.6% growth in Q2. All focus will be on Powell’s speech at the Jackson Hole symposium. The GBP/USD outlook is bullish as the pound rallies amid a drop in BoE rate cut expectations. On the other hand, the dollar remained weak as investors fully priced in a 25 bps Fed rate cut in September. -Are you interested in learning about the forex signals telegram group? Click here for details- The pound has been bullish since last week when data showed that the UK economy was steady. Notably, UK retail sales rose 0.5% in July after dropping by 0.9% the previous month. The sales figures came after GDP data revealed an expected 0.6% growth in Q2. A steady economy has lowered the chances that the Bank of England will implement another rate cut soon. The likelihood of a September rate cut fell to 37%. At the same time, investors expect 43 bps cuts in 2024. As BoE rate cut expectations fall, markets fully price a Fed cut in September. The tides shifted last week after data showed a moderate increase in inflation, as expected. Although chances of a 50 bps cut dropped, traders increased their bets on a smaller rate cut. Fed policymakers are more confident that inflation will reach the 2% target. Therefore, investors believe they will start supporting the first cut in September. Consequently, all focus will be on the Jackson Hole symposium, where Powell will speak. A more dovish speech will further weigh the dollar and boost the pound. At the same time, the FOMC policy minutes might contain clues about policymakers’ positions regarding rate cuts. GBP/USD key events today No key reports are scheduled for today. As a result, the pound will probably extend last week’s move. GBP/USD technical outlook: Bulls aiming for 1.3000 level On the technical side, the GBP/USD price is on a steep, bullish move well above the 30-SMA. At the same time, the RSI has climbed to the overbought region, showing a surge in bullish momentum. -If you are interested in forex day trading then have a read of our guide to getting started- The rally pushed the price above a solid resistance comprising the 1.2900 level and the 0.618 Fib. If this move continues, the price will reach the 1.3000 key psychological level. However, if bulls get exhausted before then, GBP/USD might pull back to retest the 30-SMA support before climbing. https://www.forexcrunch.com/blog/2024/08/19/gbp-usd-outlook-sterling-surges-on-easing-boe-rate-cut-bets/

2024-08-19 08:44

The likelihood of a 50 bps Fed rate cut in September fell amid better-than-expected data. This week, traders will watch the Jackson Hole symposium. Bank of Japan governor Kazuo Ueda will speak on Friday. The USD/JPY forecast points to solid bearish momentum as the yen rallies on divergence in policy outlook for the Bank of Japan and the Fed. Fed policymakers will likely assume a dovish tone and support expectations for a rate cut in September. On the other hand, BoJ policymakers have taken a hawkish tone, which could indicate that more rate hikes will come. -Are you interested in learning about the forex signals telegram group? Click here for details- The yen has rallied since Friday as Fed rate cut expectations rose. At the same time, investors took profits on the recent dollar rally, weakening the greenback. Last week, the likelihood of a 50 bps Fed rate cut in September fell amid better-than-expected data. However, that of a smaller cut increased. Markets are currently fully pricing a 25 bps rate cut in September. Although the rate-cutting cycle might be gradual, it will likely start next month. Consequently, the dollar might remain fragile. This week, traders will watch the Jackson Hole symposium, during which Powell might drop hints on the Fed’s policy path. Experts believe the Fed Chair might signal the start of rate cuts in September. At the same time, the FOMC policy meeting minutes will show what went into the last decision to hold interest rates. Meanwhile, in Japan, the central bank has started hiking interest rates and could do so again. Bank of Japan governor Kazuo Ueda will speak on Friday. A hawkish tone will further highlight the divergence in policy outlooks between Japan and the US. USD/JPY key events today Traders do not expect high-impact economic data from the US or Japan. Consequently, the pair might extend last week’s move. USD/JPY technical forecast: Bearish turn puts 142.56 in bears’ sights On the technical side, the USD/JPY price has broken below the 30-SMA, indicating a bearish sentiment shift. At the same time, the price has fallen below its bullish trendline and the 0.382 Fib level. In the previous move, bulls had set their sights on the 150.03 resistance level and the 0.618 Fib. However, before the price got there, there was a whiplash move that saw bears taking over. -If you are interested in forex day trading then have a read of our guide to getting started- The RSI now trades below 50, supporting bearish momentum. Therefore, the price might continue falling to the 142.56 support level. https://www.forexcrunch.com/blog/2024/08/19/usd-jpy-forecast-yen-gains-amid-boj-fed-divergence/

2024-08-18 07:50

Data revealed that July’s US wholesale inflation was softer than expected. The headline US CPI figure eased to 2.9% from 3.0%. The dollar got a brief respite when retail sales jumped by 1.0%. The USD/CAD weekly forecast leans bearish amid increasing confidence in a quarter-point September Fed rate cut. Ups and downs of USD/CAD The USD/CAD pair had a bearish week, with US data as the primary catalyst. Most US economic reports weighed on the dollar during the week, strengthening the Canadian dollar. When the week began, data revealed that July’s US wholesale inflation was softer than expected. -Are you interested in learning about the forex signals telegram group? Click here for details- Meanwhile, the headline CPI figure eased to 2.9% from 3.0%. Consequently, investors increased the likelihood of a Fed rate cut in September. However, the dollar got a brief respite when retail sales jumped by 1.0%. Nevertheless, Fed rate cut expectations kept a lid on gains. Next week’s key events for USD/CAD Next week, traders will pay attention to Canada’s inflation and retail sales data. Meanwhile, the US will release the FOMC meeting minutes. At the same time, investors will pay close attention to Powell’s speeches at the Jackson Hole Symposium. Canada’s CPI fell by 0.1% in the previous month. Inflation in the country has fallen in recent months, giving policymakers confidence to cut interest rates. At the same time, Canada’s economy has slowed down, especially in the labor market. Consequently, investors expect the Bank of Canada to cut rates in September. Another cooler inflation report will support these expectations. Meanwhile, the FOMC minutes might contain clues on the Fed’s next move. Furthermore, Powell’s speeches will show whether the central bank is ready to cut in September. USD/CAD weekly technical forecast: Bears meet the 1.3700 barrier On the technical side, the USD/CAD price trades below the 22-SMA with the RSI below 50, indicating a bearish bias. The trend recently reversed when the price reached the 1.3900 resistance level. Bears took control by pushing the price below the 30-SMA. However, the decline has paused at the 1.3700 support. -If you are interested in forex day trading then have a read of our guide to getting started- Here, bulls might resurface to retest the recently broken 22-SMA before the downtrend continues. A break below the 1.3700 support will allow bears to reach the 1.3601 level. Moreover, the price would make a lower low, confirming the downtrend. On the other hand, if the SMA fails to hold as resistance, the price will climb to the 1.3900 resistance. https://www.forexcrunch.com/blog/2024/08/18/usd-cad-weekly-forecast-high-odds-for-25-bps-cut-in-sep/

2024-08-17 08:43

The US PPI and CPI reports confirmed that inflation was on a consistent path to the 2% target. US retail sales jumped, and jobless claims fell. Next week, investors will scrutinize the Fed’s and ECB’s policy meeting minutes. The EUR/USD weekly forecast shows solid bullish momentum, as US inflation data suggest a Fed rate cut at the September meeting. Ups and downs of EUR/USD The EUR/USD pair ended the week up as the euro rose amid dollar weakness. The dollar had a tough week as data increased the likelihood of a 25 bps Fed rate cut in September. The US PPI and CPI reports confirmed that inflation was on a consistent path to the 2% target. Therefore, traders are more confident that the Fed will start lowering borrowing costs. This view has kept pressure on the US dollar, boosting the euro. -Are you interested in learning about the forex signals telegram group? Click here for details- Meanwhile, the economy has painted a mixed picture. Last week, there were fears of a recession. However, retail sales jumped this week, and jobless claims fell, indicating a resilient economy. Next week’s key events for EUR/USD Next week, investors will scrutinize policy meeting minutes from the European Central Bank and the Federal Reserve. Additionally, Fed Chair Powell will speak at the Jackson Hole Symposium. The policy meeting minutes will contain clues on the outlook for ECB and Fed rate cuts. While the ECB has started lowering borrowing costs, markets expect the first Fed cut in September. Similarly, economists expect the ECB’s next rate cut to come in September. However, inflation in the Eurozone has paused while that in the US is easing. Therefore, there is a high chance Fed policymakers will be more dovish than ECB officials. When Powell speaks next week, he might hint at the future, which could cause the US dollar to be highly volatile. EUR/USD weekly technical forecast: Bulls retest channel support in uptrend On the technical side, the EUR/USD price trades in a bullish channel and has retested the channel resistance. Moreover, it trades above the 22-SMA with the RSI nearly overbought, supporting a bullish bias. The bulls moved sharply from the 1.0800 support to the channel resistance. -If you are interested in forex day trading then have a read of our guide to getting started- The price might fall back to the 22-SMA or the channel support line from here. Nevertheless, the next target is at the 1.1051 level since the direction is up. The uptrend will continue as long as the price keeps making higher highs and lows. https://www.forexcrunch.com/blog/2024/08/17/eur-usd-weekly-forecast-fed-poised-for-sep-cut-amid-soft-cpi/