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/

2024-08-02 10:04

The yen rally extended into August as investors raised bets on Fed rate cuts. Business activity in the US manufacturing sector fell to an eight-month low. Markets were pricing in a 27.5% chance of a 50bps Fed cut in September. The USD/JPY price analysis still points South as the yen strengthens due to increased safe-haven demand. Investors fear a faster-than-expected US economic downturn but remain cautious ahead of the US nonfarm payroll report. The yen has just ended a bullish month and is extending these gains into August. Notably, July ended with a 10bps rate hike from the Bank of Japan. At the same time, the central bank announced plans to reduce its bond purchases, indicating confidence in Japan’s economic recovery. The yen rally extended into August as investors raised bets on Fed rate cuts. Notably, the US central bank has signaled the start of rate cuts in September. However, it is conditional that inflation continues to decline. Still, it is a big step towards lower borrowing costs. The most recent boost to Fed rate cut expectations came after downbeat economic data. Business activity in the US manufacturing sector fell to an eight-month low, and the ISM PMI dropped from 48.5 in June to 46.8 in July. Consequently, fears of a slowdown in the economy increased. Initially, investors were confident that the Fed would achieve a soft landing, where inflation would fall without excessively hurting the economy. However, that might not be the case. Moreover, US unemployment claims reached an 11-month high of 249,000. By the end of the day, markets were pricing in a higher 27.5% chance of a 50bps Fed cut in September. Furthermore, this outlook could strengthen with the upcoming nonfarm payrolls. Economists expect slower job growth in July. USD/JPY key events today US average hourly earnings US nonfarm payrolls US unemployment rate USD/JPY technical price analysis: Bears eye the 148.04 level in new swing On the technical side, the USD/JPY price has made new lows after breaking below the 152.01 support level. The price trades in a developed downtrend, making consistent lower highs and lows. At the same time, it has respected the 30-SMA as resistance, showing bears are in the lead. The new swing is approaching the 148.04 critical level. Here, it might pause as bears rest before pulling back or falling. The downtrend will continue as long as the price stays below the SMA. https://www.forexcrunch.com/blog/2024/08/02/usd-jpy-price-analysis-yen-soars-after-boj-economic-turmoil/

2024-08-02 08:33

The Bank of England started its rate-cutting cycle on Thursday with a quarter-point cut. The US ISM manufacturing PMI fell to an 8-month low of 46.8 in July. US unemployment claims rose, indicating a weaker labor market. The GBP/USD outlook indicates strong bearish sentiment, with the pound extending its decline following the Bank of England’s rate cut on Thursday. Meanwhile, the dollar fell after data revealed a faster-than-expected slowdown in the US economy. At the same time, markets raised expectations for Fed rate cuts. The Bank of England started its rate-cutting cycle on Thursday with a quarter-point cut. Although a cut was likely, the market had yet to fully price it in. Therefore, the pound plunged after the meeting. The BoE has joined the ECB and BoC in lowering borrowing costs ahead of the Fed. However, the US central bank is also edging closer to rate cuts. Notably, at the policy meeting on Wednesday, Powell said the Fed will cut by September if inflation comes in line with expectations. However, this outlook remains data-dependent. The dollar was initially stronger on Thursday amid safe-haven demand. Notably, tensions in the Middle East rose after the assassination of a Hamas leader. This incident spooked investors, who dumped risky assets and bought the dollar. However, the move later reversed after US data pointed to a rapid economic decline. Notably, the ISM manufacturing PMI fell to an 8-month low of 46.8 in July. Figures below 50 indicate a contraction in the sector. Elsewhere, US unemployment claims rose, suggesting a weaker labor market. These reports led to an increase in Fed rate cut expectations. Investors expect the Fed to cut rates three times before the year ends. GBP/USD key events today US average hourly earnings m/m US nonfarm employment change US unemployment rate GBP/USD technical outlook: Bearish bias strengthens with new swing low On the technical side, the GBP/USD price has extended its decline below the 30-SMA. Meanwhile, the RSI is almost entering the oversold region, strengthening the bearish bias. However, the price has reached strong support at the 1.2700 level. If bears remain strong, GBP/USD will soon break below 1.2700 to retest the 1.2620 support level. However, if the 1.2700 support holds firm, the price might bounce to retest the 30-SMA before the downtrend continues. https://www.forexcrunch.com/blog/2024/08/02/gbp-usd-outlook-pound-plummets-as-boe-lowers-rates/

2024-08-01 10:25

Iran assassinated a Hamas leader, escalating tensions in the Middle East. The Fed opened the door for a September rate cut. Data revealed a bigger-than-expected expansion in Canada’s economy. The USD/CAD outlook turned bullish on Thursday as the US dollar gained amid increased Middle East tensions. However, investors were still digesting upbeat GDP data from Canada and the slightly dovish Fed meeting. On Thursday, there was a scramble for safety as it became clear that tensions in the Middle East were escalating. A report in the previous session revealed that Iran assassinated a Hamas leader. This development could derail recent talks for a ceasefire between Israel and Hamas. Moreover, retaliations will likely lead to an escalation in the war. As a result, investors rushed to safe-haven assets like the dollar. Meanwhile, in the previous session, the dollar fell after the Fed opened the door for a September rate cut. However, Fed Chair Powell noted that any decision will be based on incoming data. Meanwhile, US data showed that private employment rose by 122,000, missing forecasts for 150,000. A weaker labor market will increase the urgency for a rate cut in the US. However, investors are awaiting the more significant nonfarm payrolls report on Friday. In Canada, data revealed a bigger-than-expected expansion in the economy, boosting the Canadian dollar. The GDP grew by 0.2% in May, beating estimates for a 0.1% growth. Although the economy is still struggling, this improvement might relieve pressure on the BoC to cut rates. The loonie also rose with oil prices due to Middle East tensions. USD/CAD key events today US unemployment claims ISM manufacturing PMI USD/CAD technical outlook: Bulls challenge bears for control at the 30-SMA On the technical side, the USD/CAD price has risen to retest the 30-SMA after the recent shift in sentiment. The previous bullish trend paused near the 1.3850 level. Here, the RSI made a bearish divergence that signaled a looming bearish reversal. After this signal, bears took over with a break below the 30-SMA. However, they found solid support at the 1.3800 support, where bulls resurfaced. If the SMA holds firm as resistance, the price might break below 1.3800 to make a lower low. On the other hand, the previous bullish trend will continue if the price breaks above the SMA. https://www.forexcrunch.com/blog/2024/08/01/usd-cad-outlook-surges-amid-escalating-middle-east-tensions/

2024-08-01 08:53

The dollar rose as geopolitical tensions escalated in the Middle East. The Fed held rates but opened the door to a rate cut in September. Eurozone inflation unexpectedly rose in July. The EUR/USD forecast shows a freefalling pair as the dollar gains amid safe-haven demand. However, the outlook for the dollar is bearish after the Fed signaled a possible rate cut in September. Meanwhile, ECB rate cut bets remained intact despite a spike in inflation. The dollar rose on Thursday as geopolitical tensions escalated in the Middle East. Tensions increased after a Hamas leader was killed in Iran. This killing diminished hopes for a successful ceasefire agreement that would reduce tensions between Israel and Hamas. Meanwhile, the dollar fell on Wednesday after a slightly dovish Fed policy meeting. The US central bank held rates but opened the door to a rate cut in September. Powell said that if inflation continued easing in line with expectations, the Fed might be ready to lower borrowing costs in September. However, he also cautioned that policymakers will keep watching incoming data before the next meeting. Investors are fully pricing in the first cut in September. Moreover, they increased the size of cuts expected this year to 72bps. Further downward pressure for the dollar came from the ADP jobs report. Notably, private employers hired a smaller-than-expected 122,000 more people. Economists had forecasted 150,000 additional private jobs. Meanwhile, Eurozone inflation unexpectedly rose in July. The CPI increased by 2.6% after a 2.5% increase in June. Nevertheless, there was little impact on expectations for a September ECB cut. Notably, service inflation eased from 4.1% to 4.0%, a slight relief for policymakers. EUR/USD key events today US unemployment claims US ISM manufacturing PMI EUR/USD technical forecast: Bearish momentum spikes after 30-SMA resistance On the technical side, the EUR/USD price has suddenly fallen sharply after retesting the 30-SMA resistance. Consequently, the price has dropped well below the SMA, indicating solid bearish momentum. Similarly, the RSI is quickly approaching the oversold region. Previously, the downtrend was slow and shallow, keeping close to the SMA. Moreover, the RSI made a bullish divergence, indicating weaker bearish momentum. However, the recent surge in momentum could push the price to the 1.0750 key level. At the same time, the RSI might dip into the oversold region. https://www.forexcrunch.com/blog/2024/08/01/eur-usd-forecast-bears-takeover-amid-risk-off-sentiment/