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/
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/
