2024-08-13 11:19

In Q2, Australia’s wages increased slowly in the year. Employment in Australia picked up, leading to improved business conditions in July. Traders are on the edge, awaiting US wholesale and consumer inflation numbers. The AUD/USD price analysis shows a slow uptrend as the Aussie climbs after a set of economic reports. However, volatility remained low as investors stayed on the sidelines ahead of US wholesale and consumer inflation reports. Australia released reports on Tuesday showing a mixed picture of the economy. In Q2, wages increased at the slowest pace in a year. The wage price index increased by 0.8%, missing forecasts of 0.9%. Meanwhile, the annual figure remained steady at 4.1%. Slower wage growth shows that high interest rates are impacting the economy. Therefore, it shines a light on the Reserve Bank of Australia’s monetary policy. However, policymakers have remained hawkish as price pressures remain high. Consequently, there is a chance the central bank will start cutting rates next year. Still, this step in the right direction might increase rate-cut expectations. Meanwhile, a separate report revealed that employment in Australia picked up, leading to improved business conditions in July. At the same time, cost pressures cooled amid high interest rates. The business conditions index increased by two points to +6. The Australian dollar rose slightly before pulling back. Nevertheless, the move was subdued amid caution ahead of US inflation figures. Traders are on the edge, waiting for wholesale and consumer inflation numbers. Cooler inflation pressure will likely boost expectations for a 50 bps September Fed rate cut. On the other hand, if inflation jumps, there will be a higher chance for a smaller 25 bps cut. AUD/USD key events today US wholesale inflation AUD/USD technical price analysis: Bullish momentum remains subdued On the technical side, the AUD/USD price is slowly climbing above the 30-SMA. Bulls show little enthusiasm as they push prices towards the 0.6700 resistance level. Recently, there was a shift in sentiment as the price broke above the 30-SMA. This break came after a bullish RSI divergence. However, bulls have remained subdued, keeping prices near the 30-SMA. Meanwhile, the RSI is moving sideways and has stayed below the overbought region, indicating weak momentum. If this trend continues, the price might reach the 0.6700 critical level. However, bears might emerge to push the price below the 30-SMA. https://www.forexcrunch.com/blog/2024/08/13/aud-usd-price-analysis-aussie-advances-despite-mixed-economic-indicators/

2024-08-13 08:43

The UK jobless rate fell from 4.4% in May to 4.2% in June. After the UK employment report, investors reduced the likelihood of a September BoE cut from 38% to 35%. Traders remained cautious as they awaited US wholesale inflation data. The GBP/USD outlook shows increased bullish enthusiasm, with the pound rallying after better-than-expected UK employment figures. At the same time, investors remained cautious ahead of US wholesale and consumer inflation figures that will shape the outlook for Fed rate cuts. Data on Tuesday revealed that the UK unemployment rate unexpectedly fell. Notably, the jobless rate fell from 4.4% in May to 4.2% in June. A resilient labor market will likely keep BoE rate cut expectations low. Consequently, after the report, investors reduced the likelihood of a September BoE cut from 38% to 35%. Recently, the central bank started its rate-cutting cycle. However, some policymakers believe service inflation remains relatively high. Nevertheless, UK wage growth fell to its lowest point in almost two years, indicating that inflation pressures are easing. Slower pay growth means weaker consumer spending, allowing price pressure to continue falling. Meanwhile, traders remained cautious as they awaited US wholesale inflation data. The PPI report is a crucial indicator of future consumer prices. Therefore, cooling prices will solidify bets for a September Fed rate cut. At the same time, the consumer inflation report is due on Wednesday. Economists expect inflation to hold at 3.0% in July. If it meets expectations or comes in lower, there will be more confidence in a September cut. On the other hand, a surprise jump could lower bets for a 50 bps cut. GBP/USD key events today US core PPI m/m US PPI m/m GBP/USD technical outlook: Price is on the cusp of a new peak On the technical side, the GBP/USD price is on the verge of making a higher high. The price recently reversed from its downtrend after a bullish RSI divergence. Currently, it sits above the 30-SMA, with the RSI heading for the overbought region. However, bulls face a solid barrier comprising the 1.2800 resistance and the 0.382 Fib retracement level. A break above this level would allow the price to make a higher high and confirm the new uptrend. Moreover, it will enable GBP/USD to climb to the next barrier at 1.2900. https://www.forexcrunch.com/blog/2024/08/13/gbp-usd-outlook-sterling-rallies-as-uk-jobless-rate-falls/

2024-08-12 10:21

The outlook for Australia’s economy and inflation will depend on data. RBA forecasts show that inflation will only reach the 2-3% target at the end of 2025. Markets have lowered the chances of a 50 bps Fed cut in September to 52%. The AUD/USD outlook shows bullish sentiment as the Aussie climbs after the RBA, which indicated uncertainty about the outlook for the economy and inflation. As a result, the path for RBA rate cuts remains clouded. On Monday, RBA Deputy Governor Andrew Hauser noted that the outlook for Australia’s economy and inflation will depend on data. Policymakers have maintained a hawkish stance as underlying inflation remains high. Moreover, RBA forecasts show it will only reach the 2-3% target at the end of 2025. Policymakers have remained cautious despite cooler-than-expected inflation figures. Notably, RBA Governor Michelle Bullock said last Thursday that the central bank would not hesitate to hike rates to control inflation. Moreover, Australia’s rates did not rise as high as other countries. As a result, policymakers believe they should keep them steady for longer before cutting. Therefore, the RBA will likely be among the last central banks to start lowering rates. On the other hand, US rate cut expectations eased as recession fears reduced. Notably, data last week revealed a drop in US jobless claims, showing the labor market remains strong. Consequently, markets have lowered the chances of a 50 bps Fed cut in September to 52%. At the start of last week, this figure was above 80%. All eyes are now on US wholesale and consumer inflation reports this week. Additionally, the US will release the retail sales report. If inflation eases and sales drop, rate-cut bets will rise. Meanwhile, any surprise jumps will reduce Fed rate cut expectations. AUD/USD key events today Markets are not expecting major economic reports today, meaning the pair might move sideways. AUD/USD technical outlook: Price trades in a tepid bullish trend On the technical side, the AUD/USD price is in a weak bullish trend above the 30-SMA. Moreover, the price is making shallow swings, indicating bulls are holding back. At the same time, the RSI trades above 50 but has not touched the overbought region. Nevertheless, the price has broken above the 0.6550 resistance to make a higher high. If this trend continues, the price will reach the 0.6700 resistance. However, bears will take control if AUD/USD breaks below the 30-SMA. https://www.forexcrunch.com/blog/2024/08/12/aud-usd-outlook-rba-uncertain-about-inflation/

2024-08-12 09:24

US unemployment claims data on Thursday showed a bigger-than-expected drop. Investors expect the Fed to lower borrowing costs by 100 bps this year. Economists expect US inflation to hold steady at 3.0% in July. The USD/JPY forecast leans bullish as dollar gains continue after last week’s stronger-than-expected employment figures. Meanwhile, the yen remained vulnerable due to uncertainty about a near-term Bank of Japan rate hike. The dollar edged higher as Fed rate cut expectations eased. This shift comes after unemployment claims data on Thursday showed a bigger-than-expected drop. The US labor market has been the reason behind recent market volatility. The last monthly report raised fears that the economy was experiencing a rapid slowdown. As a result, markets raised the chances of a 50 bps cut in September. However, as last week ended, recession fears eased as jobless claims data showed continued strength in the sector. Nevertheless, investors expect the Fed to lower borrowing costs by 100 bps this year. At the same time, policymakers have acknowledged recent signs of weakness by assuming a more dovish stance. This week, the focus will be on the US Consumer Price Index report. Economists expect inflation to hold steady at 3.0% in July. Meanwhile, the monthly rate might increase by 0.2%. If the figures meet expectations, rate-cut bets will remain intact. On the other hand, lower or higher figures could cause a lot of volatility. Meanwhile, the yen fell on Monday after policymaker comments last week reduced the likelihood of a near-term BoJ hike. A slower-than-expected hiking cycle might hurt the yen by keeping the US-Japan rate gap wide. USD/JPY key events today It will be a slow start to the week as investors await US inflation data on Tuesday and Wednesday. USD/JPY technical forecast: Bulls lack enthusiasm above the 30-SMA On the technical side, the USD/JPY price trades above the 30-SMA after a recent reversal. At the same time, the RSI trades above 50, supporting bullish momentum. Bulls took charge at the 142.56 key level. However, they are yet to find their feet above the SMA. Price action shows small-bodied candles, a sign of weak enthusiasm. Moreover, the price stays close to the SMA in a shallow move. If bulls regain momentum, USD/JPY will retest the 150.03 key level; otherwise, bears will trigger a decline in support to 142.56. https://www.forexcrunch.com/blog/2024/08/12/usd-jpy-forecast-dollar-remains-firm-after-jobless-claims-data/

2024-08-10 18:21

US services sector PMI data showed expansion. US jobless claims fell, indicating a still-tight labor market. The pound fell as markets contemplated the Bank of England’s first rate cut. The GBP/USD weekly forecast is slightly bearish despite the recent rally, as the Bank of England appears more confident about cutting rates further. Ups and downs of GBP/USD The pound had a bearish week but closed far above its lows. The pair started the week down as investors dumped risky assets amid fears of a US recession. Data in the previous week showed weaker-than-expected economic performance. However, this changed with the US services sector PMI data, which showed expansion. Meanwhile, jobless claims fell, indicating a still-tight labor market. Nevertheless, investors were already pricing a more significant 50 bps Fed rate cut in September. Additionally, the pound fell as markets contemplated the Bank of England’s first rate cut. Next week’s key events for GBP/USD Next week, the pound might experience significant volatility due to US and UK inflation and retail sales data. Additionally, the UK will release data on employment, GDP, and manufacturing production. Markets will focus on the consumer inflation reports, shaping the outlook for monetary policy in the UK and the US. The Fed is looking to start its rate-cutting cycle in September. Inflation in the US has been on a downtrend, and the economy is beginning to crack. Therefore, further easing inflation will give policymakers enough confidence to cut interest rates. Meanwhile, the Bank of England recently implemented its first rate cut. However, most policymakers believe underlying inflation remains high. Still, they have gained enough confidence to start lowering borrowing costs. GBP/USD weekly technical forecast: Bears eying 1.2620 support On the technical side, the GBP/USD price trades below the 22-SMA with the RSI below 50. Therefore, bears are in control. However, the price has made higher highs and lows on a larger scale, indicating a bullish trend. After puncturing the 1.2800 support, bears are now eyeing the 1.2620 level. Initially, GBP/USD reached a higher low at this level. Therefore, it is a strong barrier. However, if bears breach this level, the price will make a lower low, breaking the bullish trend pattern. In this case, GBP/USD would confirm a new bearish trend. On the other hand, if the level holds firm as support, bulls might resurface to make a new high. https://www.forexcrunch.com/blog/2024/08/10/gbp-usd-weekly-forecast-boe-confident-to-cut-rates-further/

2024-08-10 18:05

Fed rate cut expectations pressured the dollar. The Canadian dollar had a strong week as oil prices gained. Investors are awaiting US inflation data. The USD/CAD weekly forecast points to a bearish trend. The dollar weakens on Fed rate cut speculation while the loonie strengthens, driven by rising oil prices. Ups and downs of USD/CAD The USD/CAD pair had a bearish week, with the Canadian dollar defying the odds to rise against the US dollar. When the week began, the market turmoil amid fears of a US recession initially boosted the dollar before the trend reversed. However, data on service sector activity and jobless claims showed a different picture of a resilient economy. As a result, recession fears eased. However, Fed rate cut expectations remained high, pressuring the dollar. On the other hand, the Canadian dollar had a strong week as oil prices gained. Meanwhile, Canada’s employment figures showed a mixed picture. More people lost jobs, but the unemployment rate fell slightly. Next week’s key events for USD/CAD Next week, investors will focus on US data, including wholesale and consumer inflation and retail sales. These reports will significantly impact Fed rate cut expectations. Notably, economists expect the Consumer Price Index to ease further to 2.9% in July. Meanwhile, the monthly figure could increase by 0.2% compared to the previous -0.1%. If the report shows cooling price pressure, it will solidify bets for a 50 bps rate cut in September. On the other hand, if inflation surprises upside down, markets might reduce the expected size of rate cuts. Meanwhile, retail sales will show the state of demand and how strong the US consumer is. USD/CAD weekly technical forecast: Price under 22-SMA, signaling bearish dominance On the technical side, the USD/CAD price has broken below the 22-SMA, showing bears have taken control. Initially, bulls had control, pushing the price above the 1.3802 critical resistance level. Although the price made a higher high, bulls failed to maintain the move, allowing bears to take over. As a result, the price has fallen below the 1.3802 key level. With bears in the lead, USD/CAD might fall to retest the 1.3601 support level. A break below this level would confirm a new downtrend. Otherwise, the price will remain consolidated with support at 1.3601 and resistance at 1.3802. https://www.forexcrunch.com/blog/2024/08/10/usd-cad-weekly-forecast-fed-cut-and-oil-rally-trigger-bears/