2024-08-09 05:42

US unemployment claims figures revealed a drop to 233,000. Despite signs of weakness, the US labor market remains resilient. BoJ minutes on Thursday showed a more hawkish tone among policymakers. The USD/JPY outlook leans bullish as the dollar recovers following upbeat US employment figures. Meanwhile, the yen extended declines as recent recession worries eased and risk appetite improved. -Are you looking for automated trading? Check our detailed guide- On Thursday, the US released unemployment claims figures showing a drop to 233,000, the most significant decline in nearly a year. Economists had expected 240,000 claims. The figures eased fears that the labor market was deteriorating rapidly. Last week, data showed a massive jump in the unemployment rate, sparking fears of a slowdown. This panic boosted the yen, considered a haven in times of uncertainty. However, calm later returned as data showed other sectors of the US economy remained resilient. The dollar traded near a four-month low as Fed rate cut expectations surged. However, this decline paused as the market turmoil eased. Despite signs of weakness, the labor market remains resilient. Nevertheless, last week’s report was a catalyst for the Fed to start lowering borrowing costs to avoid a new downtrend in the sector. Meanwhile, the yen has remained vulnerable since the Bank of Japan Deputy Governor dashed hopes for a near-term rate hike. He called for a pause because of recent volatility in the global markets. Meanwhile, BoJ minutes on Thursday showed a more hawkish tone, increasing the uncertainty on the central bank’s policy outlook. USD/JPY key events today It might be a slow end to the week as investors do not expect key reports from Japan or the US. USD/JPY technical outlook: Bulls steady above the 30-SMA On the technical side, the USD/JPY price trades above the 30-SMA, and the RSI is above 50, indicating a bullish bias. This shift comes after the price reversed at the 142.56 level. Here, the price got deeply oversold, allowing bulls to resurface. -If you are interested in forex day trading then have a read of our guide to getting started- The new direction above the SMA will allow the price to revisit the 150.03 resistance level. If it breaks above, it will reach the 155.01 resistance. However, there is also a chance that this is only a deep pullback before the price reverses to the downside. Still, bears will only return if the price breaks below the 30-SMA. Otherwise, USD/JPY will start making higher highs and lows. https://www.forexcrunch.com/blog/2024/08/09/usd-jpy-outlook-fewer-jobless-claims-boost-dollar/

2024-08-09 05:33

The BoE implemented its first rate cut last week. UK underlying inflation remains high. US recession fears eased after upbeat employment data. The GBP/USD price analysis shows a bullish shift in sentiment as the pound recovers amid improving risk appetite. Notably, fears of a looming US recession eased as data showed the labor market remained solid. -Are you looking for automated trading? Check our detailed guide- The pound has had a rough week as markets digested the recent shift in policy for the Bank of England. At the same time, declines came as investors dumped risky assets due to fears that the US economy was heading for a recession. Last week, the Bank of England cut rates for the first time, indicating increasing confidence that inflation is on a downtrend. However, it was a tight vote of 5-4, indicating that some policymakers felt rates should remain high. Underlying inflation in the UK has remained stubbornly high, keeping policymakers cautious. However, as inflation in the US eases and the Fed nears its first cut, other central banks are taking a more dovish stance. Elsewhere, data from the US revealed a drop in unemployment claims to an 11-month low of 233,000 last week. Meanwhile, economists had expected claims at 240,000. Jobless claims are a key indicator of the unemployment rate. The previous monthly jobs report raised fears of a recession due to the spike in the unemployment rate. However, this might only be a one-time thing. Policymakers will wait to see incoming data before concluding on the state of the sector. GBP/USD key events today Neither the UK nor the US will release high-impact data today. Therefore, the pair might end the week quietly. GBP/USD technical price analysis: 30-SMA breach signals looming reversal On the technical side, the GBP/USD price has made a strong bullish move, puncturing the 30-SMA. At the same time, the RSI has pushed above the 50 mark, indicating a shift in sentiment. The previous downtrend weakened when the price reached the 1.2700 key support level. Here, the RSI made a bullish divergence, indicating exhaustion. -If you are interested in forex day trading then have a read of our guide to getting started- Furthermore, although the price made lower lows and highs, bulls continued making strong candles, indicating a corrective move. At the same time, the price stayed close to the SMA, avoiding large swings. A reversal will allow GBP/USD to revisit resistance levels, including 1.2800 and 1.2900. https://www.forexcrunch.com/blog/2024/08/09/gbp-usd-price-analysis-pound-rebounds-as-risk-appetite-grows/

2024-08-08 10:22

The weakness in the US labor market will increase the urgency of Fed rate cuts. Investors will now await next week’s US CPI report. The Canadian dollar strengthened as oil prices recovered. The USD/CAD outlook is bearish as the dollar eases on Fed rate cut expectations. Meanwhile, the Canadian dollar extended its recovery this week amid a rally in oil prices. -Are you looking for automated trading? Check our detailed guide- The dollar weakened slightly on Thursday as investors priced in the first Fed rate cut in September. Earlier in the week, the focus was on the risk of a recession in the US. However, calm has returned, and traders are now looking at the likelihood of a 50 bps rate cut in September. The shift to a more sizable cut came after last week’s poor jobs report. Weakness in the labor market will increase the urgency of rate cuts, weighing on the US dollar. At the same time, policymakers have taken a more dovish stance, indicating confidence that demand is declining. Investors will now await the US CPI report, which will continue shaping the outlook for Fed policy. More easing in price pressures will solidify bets for a September rate cut. On the other hand, any spikes could reduce rate-cut expectations and support the dollar. On the other hand, the Canadian dollar strengthened as oil prices recovered. Oil rose after a bigger-than-expected drop in US crude inventories. At the same time, supply concerns amid growing Middle East tensions remained. The loonie is moving farther away from the two-year low hit on Monday. However, despite the recent rebound, the Bank of Canada remains concerned about the economy. As a result, markets expect more rate cuts in Canada, putting pressure on the Canadian dollar. USD/CAD key events today US jobless claims USD/CAD technical outlook: Bears inch closer to the 1.3701 support On the technical side, the USD/CAD price is approaching the 1.3701 key support level. The bearish bias is strong, with the price trading well below the 30-SMA and the RSI in bearish territory. However, the price might pause after the recent sharp swing to allow the 30-SMA to catch up. Moreover, it might pull back to retest the SMA before falling lower. -If you are interested in forex day trading then have a read of our guide to getting started- If bears break below the 1.3701 level, they will target the next support at 1.3601, and the downtrend will continue as long as the price trades below the SMA. https://www.forexcrunch.com/blog/2024/08/08/usd-cad-outlook-loonie-extends-gains-amid-oil-rally/

2024-08-08 10:02

RBA governor Michelle Bullock said the central bank would not hesitate to hike interest rates. The likelihood of an RBA rate cut in November fell to 46%. The US dollar eased as markets focused on the Fed’s rate cut outlook. The AUD/USD forecast shows strong bullish sentiment as the Aussie climbs after hawkish Reserve Bank of Australia comments. Meanwhile, the dollar eased as markets focused on the likelihood of a September Fed rate cut. -Are you looking for automated trading? Check our detailed guide- On Thursday, RBA governor Michelle Bullock said the central bank would not hesitate to hike interest rates to control inflation. Her remarks come after the recent inflation report showing easing price pressures. Markets had raised the likelihood of an RBA cut in November. However, since then, policymakers have maintained a cautious tone, saying underlying inflation remains high. After these remarks, the likelihood of a rate cut in November fell to 46%. Meanwhile, Australia’s Westpac pushed back its forecast for the first rate cut from November to February next year. Notably, the Reserve Bank of Australia did not raise interest rates as much as most major central banks. As a result, policymakers feel they should hold on to high rates for longer despite the recent wave of rate cuts. Meanwhile, the US dollar eased as markets focused on the Fed’s rate cut outlook. After last week’s employment report, investors fully priced in the first rate cut in September. Moreover, they shifted from expecting 25 bps to 50 bps. However, the numbers have gone down as fears of a recession eased. Still, the markets have more confidence now that the Fed will soon start cutting rates. The next major report on US inflation will be released next week. Another softer reading will reinforce bets on a September rate cut. AUD/USD key events today US unemployment claims AUD/USD technical forecast: Bears lose control after bullish RSI divergence On the technical side, the AUD/USD price has broken above the 30-SMA, indicating a bullish sentiment shift. This shift follows a bullish RSI divergence that indicated fading bearish momentum. As a result, bulls regained enough strength to take control by pushing the price beyond the SMA. -If you are interested in forex day trading then have a read of our guide to getting started- However, the price must make higher highs and lows to confirm a bullish trend. At the moment, bulls are facing the 0.6550 resistance. A break above this level will allow the price to climb to the 0.6700 key psychological level. https://www.forexcrunch.com/blog/2024/08/08/aud-usd-forecast-aussie-rises-amid-hawkish-rba-tone/

2024-08-07 10:41

BoJ Deputy Governor Shinichi Uchida said the central bank should pause due to the recent volatility in global markets. The US dollar steadied as Fed rate cut expectations eased slightly. Investors are pricing a 70% chance of a Fed cut in September. The USD/JPY forecast points North as the pair reverses its sharp decline. The yen plummeted after a Bank of Japan official dampened hopes for a near-term rate hike. Meanwhile, the dollar steadied as Fed rate cut expectations eased slightly. -Are you looking for automated trading? Check our detailed guide- On Wednesday, BoJ Deputy Governor Shinichi Uchida said the central bank should pause due to the recent volatility in global markets. These remarks reduced the likelihood of a near-term rate hike in Japan. The Bank of Japan raised rates for the second time last week, boosting the yen and reducing the gap in interest rates between Japan and the US. As a result, investors gave up the carry trade that had thrived amid wide interest rate differentials. Initially, investors had borrowed the yen at low rates to buy dollar assets for higher returns. However, the carry trade could lose popularity now that the BoJ is hiking and the Fed is about to cut rates. Consequently, the yen might recover beyond the recent 7-month peak. However, this depends on how fast the BoJ will tighten its monetary policy. A slow pace might keep pressure on Japan’s currency. Meanwhile, the US dollar steadied as Fed rate cut expectations eased slightly. After last week’s jobs report, markets moved to price an 85% chance of a 50-bps rate cut in September. However, upbeat US service activity data eased recession fears and lowered the chances of this rate cut. Currently, there is a lower 70% chance of a rate cut in September. USD/JPY key events today Investors might pause and reflect on the recent volatility as there are no high-impact releases from the US or Japan. USD/JPY technical forecast: Bulls break above the 30-SMA On the technical side, the USD/JPY price has broken above the 30-SMA with a solid bullish candle. At the same time, the RSI now trades above 50, in bullish territory. These changes indicate a shift in sentiment to bullish. The previous bearish trend paused near the 142.56 key level, where bulls resurfaced. -If you are interested in forex day trading then have a read of our guide to getting started- If the price sustains a move above the 30-SMA, it might retest the 150.03 resistance level. However, the price must start making higher highs and lows to confirm a new trend. https://www.forexcrunch.com/blog/2024/08/07/usd-jpy-forecast-yen-falls-sharply-after-rate-hike-hopes-dim/

2024-08-07 08:58

Data from Canada revealed an unexpected trade surplus of C$638 million in June. Canada’s services PMI edged higher from 47.1 to 47.3 in July. Oil prices rose on Wednesday as focus shifted to the escalating Middle East tensions. The USD/CAD price analysis paints a bearish picture as the Canadian dollar recovers after upbeat economic data. At the same time, the loonie got a boost from rising oil prices and a pause in the US stock market sell-off. -Are you looking for automated trading? Check our detailed guide- Data on Tuesday revealed an unexpected trade surplus of C$638 million in June as oil shipments in Canada increased. Meanwhile, economists had expected a deficit of C$ 1.84 billion. Separate data on Tuesday showed that Canada’s services PMI increased from 47.1 to 47.3 in July. However, since the figure remains below 50, business activity is low. Moreover, the sector is in contraction rather than expansion. Notably, Canada’s economy has slowed significantly due to high borrowing costs, and inflation has cooled. For this reason, the Bank of Canada has cut rates twice this year. Furthermore, markets are betting on another rate cut in September. Meanwhile, oil prices rose on Wednesday as focus shifted to the escalating Middle East tensions. Notably, Hamas has chosen a new leader to succeed the one recently assassinated in Iran. A rally in oil is bullish for the Canadian dollar, a commodity currency. Further strength for the loonie came from increased risk sentiment as Wall Street recovered from its sell-off. Meanwhile, the dollar was steady despite increased Fed rate cut expectations. USD/CAD key events today Investors are not expecting any critical economic reports from the US or Canada. Therefore, the price might consolidate. USD/CAD technical price analysis: Price drops as market sentiment shifts On the technical side, the USD/CAD price is falling after a recent shift in sentiment. Bears took control when the previous bullish trend failed to go beyond the 1.3900 key resistance level. The reversal started with a bearish divergence in the RSI, which showed fading bullish momentum. At the same time, the price made a solid doji candlestick, showing indecision at a critical resistance level. -If you are interested in forex day trading then have a read of our guide to getting started- Soon after, bears took control with a break below the 30-SMA and the 1.3802 support. The price is now on the verge of breaking below the 0.5 Fib level, allowing bears to revisit the 1.3701 support. https://www.forexcrunch.com/blog/2024/08/07/usd-cad-price-analysis-upbeat-data-lifts-canadian-dollar/