2024-08-06 10:42

The RBA kept rates unchanged on Tuesday and dimmed hopes for a rate cut this year. The likelihood of an RBA rate cut in November fell from 88% to 55%. The ISM released data showing a surge in business activity in the US services sector. The AUD/USD price analysis shows bears in the lead as the Aussie falls despite a hawkish Reserve Bank of Australia policy meeting. Notably, the dollar recovered as fears of a US recession eased after upbeat economic data. -Are you looking for automated trading? Check our detailed guide- The RBA kept rates unchanged on Tuesday and dashed hopes for a rate cut this year. Policymakers noted that inflation would fall at a more gradual pace. Moreover, officials discussed hiking interest rates but decided to keep them steady. The RBA has remained mostly hawkish, with markets expecting the first rate cut next year. However, the recent CPI report changed this outlook. Underlying inflation eased more than expected in the second quarter, so, investors were hoping for a more dovish outlook at the meeting. Unfortunately, this was not the case. After the meeting, the likelihood of an RBA rate cut in November fell from 88% to 55%. The Aussie gained after the meeting but soon fell as focus shifted to the rebounding dollar. On Monday, the ISM released data showing a surge in business activity in the US services sector. The PMI rose to 51.4, beating expectations for an increase to 51.0. This report offset some of the fears that the economy was heading for a recession. Moreover, it led to a slight drop in Fed rate cut expectations. AUD/USD key events today After the RBA policy meeting, investors are not expecting any more major reports. Therefore, they will continue to absorb the meeting’s outcome. AUD/USD technical price analysis: Bullish RSI divergence On the technical side, the AUD/USD price is falling after retesting the 30-SMA resistance. Initially, bulls punctured the SMA, intending to take control. However, they failed to sustain the move, allowing bears to regain control. With this new swing, the price might revisit the 0.6400 support level. -If you are interested in forex day trading then have a read of our guide to getting started- However, recent price action shows that bears are struggling to push prices lower. Notably, the RSI has made a strong bullish divergence, indicating weaker bearish momentum. Moreover, the price has mostly remained near the 30-SMA. Therefore, if bears cannot continue lower, the price might break above the 30-SMA and the 0.6550 resistance. https://www.forexcrunch.com/blog/2024/08/06/aud-usd-price-analysis-bears-dominate-despite-hawkish-rba/

2024-08-06 09:22

Investors panicked on Monday that the US economy was heading for a recession. The ISM reported that the services PMI rose from 48.8 in June to 51.4 in July. Markets are pricing in a 75% chance of a 50-bps Fed rate cut in September. The USD/JPY outlook is slightly bullish as the yen pauses its five-session rally. At the same time, the dollar recovered after data in the previous session revealed a rebound in the US services sector in July. -Are you looking for automated trading? Check our detailed guide- The yen retreated after reaching a new high in the previous session amid safe-haven demand. Notably, there was panic in the markets on Monday that the US economy was heading for a recession. These fears came from recent economic data showing a surge in the unemployment rate to a three-year high of 4.3%. Furthermore, US equities sold off due to poor earnings reports, which fueled recession fears. Traditional safe-haven assets like the yen have gained amid these concerns. However, this rally paused Monday after the US released service sector activity data. The ISM reported that the services PMI rose from 48.8 in June to 51.4 in July, which was higher than the forecast of 51.0. The services sector returned to expansion, reducing some of the fears of a recession. Additionally, rate cut expectations eased slightly. Markets are now pricing in a 75% chance of a 50-bps Fed rate cut in September. Nevertheless, rate-cut expectations will remain high if inflation continues easing and the economy slows. This will weigh on the dollar and keep the yen strong. At the same time, if the BoJ continues tightening monetary policy, the outlook for USD/JPY will remain bleak. USD/JPY key events today There won’t be any major releases from the US or Japan. Therefore, the pair might consolidate. USD/JPY technical outlook: Bulls resurface as downtrend pauses On the technical side, the USD/JPY price has pulled back to retest the 145.05 key level. Although the downtrend has paused, the bearish bias remains strong. The price trades below the 30-SMA, and the RSI is below 50. -If you are interested in forex day trading then have a read of our guide to getting started- Therefore, if the pullback continues, the price might retest the 30-SMA resistance before making new lows. However, if bears are ready, they might return at the 145.05 level, to push the price to the next support at 140.00. A lower low will confirm the continuation of the downtrend. https://www.forexcrunch.com/blog/2024/08/06/usd-jpy-outlook-dollar-rebounds-on-upbeat-pmi-data/

2024-08-05 10:30

Traders were rushing for safety amid fears of a recession in the US. Data on Friday revealed a sharp slowdown in US job growth in July. The pound remained fragile after the Bank of England cut interest rates last week. The GBP/USD outlook favors the bears, with the pound hovering near a one-month low amid poor market risk appetite. Investors are dumping risky assets amid a wave of global economic uncertainty. On Monday, traders were rushing for safety amid fears of a recession in the US. Furthermore, there were worries about China’s economy, which has performed dismally. Notably, data on Friday revealed a sharp slowdown in US job growth in July. The economy added a smaller-than-expected 114,000 jobs while the unemployment rate rose to 4.3%. The figures led to a surge in Fed rate cut bets, with investors now expecting a 50-bps cut in September. Furthermore, recent data from the US has revealed cooler-than-expected inflation. Therefore, if inflation is falling and the economy deteriorating, the Fed might fail to achieve a soft landing. Moreover, there is now more pressure on the central bank to lower borrowing costs. This trend of weak economic performance is spreading across major economies. The period of high inflation is coming to an end. Policymakers are now grappling with the effects of prolonged high interest rates. As a result, there is increased economic uncertainty, which is hurting the appetite for risk. Additionally, the pound remained fragile after the Bank of England cut interest rates last week. This was the central bank’s first rate cut in four years. Moreover, investors expect one more cut before the year ends. GBP/USD key events today US ISM Services PMI GBP/USD technical outlook: RSI indicating a corrective bearish move On the technical side, the GBP/USD price has fallen after retesting the 30-SMA resistance. The downtrend remains intact because the price has stayed below the 30-SMA. At the same time, the RSI has traded below 50 in bearish territory. -If you are interested in forex day trading then have a read of our guide to getting started- However, while the price has made consistent lower lows, the RSI has traded sideways. Therefore, bearish momentum has plateaued, indicating a corrective move. If there is no surge in momentum, bulls might take control with a break above the 30-SMA. However, if bears remain in control, the price will break below the 1.2700 level to make new lows. https://www.forexcrunch.com/blog/2024/08/05/gbp-usd-outlook-struggling-under-1-28-amid-risk-off-tone/

2024-08-05 09:01

The US economy added 114,000 jobs, below estimates of 175,000. The likelihood of a 50-bps September Fed cut has risen to 80%. Middle East tensions continued with threats of retaliation. The USD/JPY forecast leans bearish, with the yen near a 7-month high as the dollar weakens amid growing fears of a US recession. Downbeat US data last week raised concerns that the economy might be slowing down faster than expected, resulting in a surge in Fed rate cut expectations. -Are you looking for automated trading? Check our detailed guide- Data on Friday showed the US economy added 114,000 jobs, below estimates of 175,000. Meanwhile, the unemployment rate jumped from 4.1% to 4.3%. These figures followed more downbeat data on the manufacturing sector. Fears of a recession in the US had investors rushing to other safe-haven assets like the yen. Initially, traders were expecting a 25-bps cut in September. However, after the jobs report, the likelihood of a 50-bps cut has risen to 80%. At the same time, markets are betting on 155-bps cuts this year. This surge in rate cut expectations led to a decline in US Treasury yields, boosting the yen. Yields started falling after the Fed policy meeting, where Powell opened the door to a September rate cut. At the same time, investors were seeking safety amid global economic uncertainty. Notably, many major economies are buckling under high interest rates. Meanwhile, others like China are struggling to recover, pushing central banks to lower borrowing costs. Elsewhere, Middle East tensions continued with threats of retaliation after the killing of a Hamas leader in Iran. As a result, the US is ready to send its military to try and control the situation. Fears of an escalation have dampened risk appetite in most markets, benefitting safer assets like the yen. USD/JPY key events today US ISM Services PMI USD/JPY technical forecast: Plumet below significant support levels On the technical side, the USD/JPY price is sharply declining, breaking below significant support levels. Bears have pushed the price far below the 30-SMA, showing a solid swing. At the same time, the RSI trades in the oversold region, indicating extreme bearish momentum. -If you are interested in forex day trading then have a read of our guide to getting started- The price recently fell past the 145.05 key psychological level. Bears are now eyeing the next hurdle at the 140.00 level. However, given the price is oversold, bulls might resurface for a pause or pullback before the downtrend continues. https://www.forexcrunch.com/blog/2024/08/05/usd-jpy-forecast-hits-7-month-low-amid-us-recession-fears/

2024-08-04 07:58

The US manufacturing PMI fell from 48.5 in June to 46.8 in July. US jobs growth eased in July. The dollar remained strong due to safe-haven demand. The USD/CAD weekly forecast is bullish as the dollar climbs amid increased geopolitical tensions and economic uncertainties. However, Friday’s downbeat US NFP erased some weekly gains. Ups and downs of USD/CAD The loonie had a bullish week despite weaker-than-expected US data. At the same time, the Fed took on a more dovish tone at the meeting on Wednesday. Notably, the US manufacturing PMI fell from 48.5 in June to 46.8 in July. Consequently, there were fears that the economy was slowing down at a fast rate. -Are you looking for automated trading? Check our detailed guide- Meanwhile, US jobs growth eased in July, with the unemployment rate spiking to 4.3%. In the last week, Fed rate cut bets soared, and policymakers opened the door to a September cut. However, the dollar remained strong due to safe-haven demand. Middle East tensions increased with the killing of a Hamas leader, pushing investors to buy the dollar. Next week’s key events for USD/CAD Next week, Canada will release its monthly employment figures, shaping the outlook for rate cuts. Last month’s report showed a sharp slowdown in the labor market that raised fears of further economic deterioration. Canada lost 1,400 jobs when economists had forecasted an increase. These figures increased pressure on the Bank of Canada to cut rates. Consequently, investors bet heavily on rate cuts, weighing on the Canadian dollar. At the July meeting, the BoC cut rates and took on a more dovish outlook. Economists expect another rate cut at the September meeting. Therefore, if the employment report shows further weakness, the September rate cut bets will rise. On the other hand, if employment recovers, there will be less pressure on Canada’s central bank to cut rates. USD/CAD weekly technical forecast: Solid bullish swing On the technical side, the USD/CAD price has broken above the 1.3802 resistance level to make a higher high. The break comes after a sharp bullish move from the 1.3601 support level. Initially, bears and bulls were equally matched. The price made strong bearish, and bullish candles. -If you are interested in forex day trading then have a read of our guide to getting started- However, the last swing had only bullish candles, indicating one side was stronger. Consequently, the price easily breached the 1.3802 resistance level. It retested the 1.3802 level as support to confirm the break before making a higher high. This indicates a new bullish trend that might continue next week, with a break above the 1.3901 key level. https://www.forexcrunch.com/blog/2024/08/04/usd-cad-weekly-forecast-stronger-dollar-amid-geopolitics/

2024-08-03 10:06

Australia’s CPI showed cooler-than-expected underlying price pressures. Business activity in the US manufacturing sector plunged to an 8-month low. US nonfarm payrolls missed forecasts. The AUD/USD weekly forecast points south after Australia’s inflation figures increased expectations for Reserve Bank of Australia rate cuts. Ups and downs of AUD/USD The AUD/USD pair had a bearish week, and the Australian and US dollars struggled. At the start of the week, Australia released inflation data, which showed cooler-than-expected underlying price pressures. As a result, markets increased the likelihood of an RBA rate cut in November. -Are you looking for automated trading? Check our detailed guide- Soon after, US data showed a faster-than-expected slowdown in the economy. Business activity in the manufacturing sector plunged to an 8-month low. Meanwhile, nonfarm payrolls missed forecasts, and unemployment jumped to 4.3%. However, the dollar barely fell due to safe-haven demand. Notably, during the week, investors bought dollars amid fears of an escalation in the Middle East war. Next week’s key events for AUD/USD Next week, investors will focus on the Reserve Bank of Australia policy meeting. Australia’s central bank will likely keep rates unchanged at the meeting. However, the focus will be on the messaging after the meeting. For a long time, markets have been pushing back bets on RBA rate cuts, expecting the first in mid-2025. However, this outlook recently changed after Australia’s inflation report. Notably, underlying inflation unexpectedly cooled in the second quarter, raising expectations for a rate cut this year. Investors are now expecting the first cut in November. If policymakers assume a slightly more dovish tone, the Aussie might fall. On the other hand, they might maintain caution, boosting the Australian dollar. AUD/USD weekly technical forecast: Bears charge towards 0.6401 support On the technical side, the AUD/USD price has steeply declined from the 0.6801 key level. It has fallen well below the 22-SMA, with the RSI in the oversold region, indicating solid bearish momentum. The decline paused briefly when it reached the 0.618 Fib retracement level. However, bears soon broke below with a solid candle. -If you are interested in forex day trading then have a read of our guide to getting started- In the coming week, the bearish trend might continue past the 0.786 Fib to retest the 0.6401 support level. Here, the downtrend might pause and pull back to retest the 22-SMA resistance. Nevertheless, the bearish bias will remain if the price stays below the SMA and the RSI below 50. https://www.forexcrunch.com/blog/2024/08/03/aud-usd-weekly-forecast-rba-cut-odds-rise-amid-cooling-cpi/