2024-06-23 08:59
The Reserve Bank of Australia held rates but discussed the possibility of hiking. The US released data showing weaker-than-expected retail sales. Business activity data revealed a bigger-than-expected expansion in the US manufacturing and services sectors. The AUD/USD weekly forecast is slightly bullish as the Aussie maintains its edge due to a hawkish central bank. Ups and downs of AUD/USD The AUD/USD pair had a bullish week as the Australian dollar strengthened after the RBA policy meeting, and the US dollar fluctuated amid mixed data. The Reserve Bank of Australia held rates but discussed the possibility of hiking, given the high inflation. This led to a decline in bets for a cut in December. Meanwhile, the US released data showing weaker-than-expected retail sales. This was another sign of poor economic activity that could push the Fed to cut interest rates. However, as the week ended, business activity data revealed a bigger-than-expected expansion in the manufacturing and services sectors. Next week’s key event for AUD/USD Next week, investors will focus on data from the US, including GDP and durable goods orders. These reports will have a big impact on Fed rate cut expectations. Recent data from the US, including the last GDP report, have indicated a slowdown in the economy. This was also seen in the retail sales report. If this trend continues next week, the likelihood of a September rate cut by the US central bank will increase. However, if there is a shift, as seen in the PMI data on Friday, the Fed will likely only cut once this year. AUD/USD weekly technical forecast: Price action confined between 0.6580 and 0.6701 On the technical side, the AUD/USD price is trading in a tight range between the 0.6580 support and the 0.6701 resistance level. Initially, the price bounced from the 0.6401 support level, pushing above the 22-SMA. This indicated a shift in sentiment to bullish. However, bulls could only push the price as high as the 0.6701 resistance level, near the 0.618 Fib level. This is where the price entered a period of consolidation. Bears and bulls are battling for control within this range area. Therefore, this consolidation might continue in the coming week. However, if one side wins, there is a higher chance the price will break above 0.6701 since the previous move was bullish. https://www.forexcrunch.com/blog/2024/06/23/aud-usd-weekly-forecast-aussie-gains-amid-hawkish-rba/
2024-06-22 20:10
US retail sales came in weaker than expected, indicating lower consumer spending. Continuing claims in the US reached new highs, showing increased unemployment. Canada will release inflation and GDP data, showing the economy’s state and giving clues about the Bank of Canada’s rate cut outlook. The USD/CAD weekly forecast points south as market participants expect the Fed to cut rates starting in September of this year. Ups and downs of USD/CAD The USD/CAD pair had a red week, ending lower as the dollar fell after a mix of data. Markets focused on retail sales, employment and PMI data. Retail sales came in weaker than expected, indicating lower consumer spending. Consequently, Fed rate cut expectations rose. Furthermore, although initial jobless claims fell, continuing claims reached new highs, showing increased unemployment. However, PMI data showed robust business activity in the US as the manufacturing and services sectors expanded more than expected. Next week’s key events for USD/CAD Next week, Canada will release inflation and GDP data, showing the economy’s state and giving clues on the Bank of Canada’s rate cut outlook. Meanwhile, the US will release data on GDP and durable goods orders. Last week, the Bank of Canada became the first major central bank to cut interest rates. Investors are now keen to see whether this cycle will continue. A bigger-than-expected easing in inflation could give policymakers more confidence to lower borrowing costs. However, a spike could lead to a pause as the central bank adjusts accordingly. In the US, the GDP report could further pressure the Fed to start cutting interest rates since the last report showed a massive drop from 3.4% to 1.3% growth. USD/CAD weekly technical forecast: Bears struggle to reverse trend On the technical side, the USD/CAD price is on the verge of breaking below the 22-SMA. Such an outcome would indicate a shift in sentiment. At the same time, the RSI is about to dip into bearish territory below 50. The price recently made a choppy break below its bullish trendline, indicating that bears were ready to reverse the trend. However, to confirm a reversal, the price must break below the 1.3605 support level to make a lower low. If this happens, the path for bears to retest the 1.3400 support level will be clear. https://www.forexcrunch.com/blog/2024/06/22/usd-cad-weekly-forecast-markets-hold-bets-for-sep-fed-cut/
2024-06-21 10:08
Initial jobless claims in the US fell from 243,000 to 238,000 last week. The likelihood of a Fed cut in September fell to 58%. The Swiss National Bank cut rates a second time on Thursday. The USD/JPY price analysis points Northward as the dollar hovers near a 7-week high against the yen, which it hit in the previous session. The greenback gained ground due to upbeat employment data and a growing contrast in policy outlooks with other major central banks. Investors worried about a possible intervention as the dollar rallied against the yen on Thursday. This rally came amid data showing a decline in US unemployment claims. Initial jobless claims fell from 243,000 to 238,000 last week, indicating continuing strength in the labor market. However, there were signs that unemployment was on the rise. Notably, the total number of benefits rose to the highest level since the start of the year. After the report, the likelihood of a Fed cut in September fell to 58%. At the same time, policymakers have remained cautious about inflation and the outlook for rate cuts. Notably, Fed’s Neel Kashkari said it would take one to two years to lower inflation to target, raising concerns about high rates for longer. The Fed has remained slightly hawkish, forecasting one rate cut in December. However, other central banks are planning to cut sooner. Furthermore, the Swiss National Bank cut rates a second time on Thursday, opening the door for more global rate cuts. This contrast has benefited the dollar and weighed on the yen. Meanwhile, the Bank of Japan was more dovish than expected at the last meeting, which has hurt Japan’s currency. As the BoJ delays hikes and the Fed delays cuts, the rate gap between the two countries remains wide. USD/JPY key events today US flash manufacturing PMI US flash services PMI USD/JPY technical price analysis: Bullish momentum pauses at 1.414 Fib resistance On the technical side, the USD/JPY price has risen to the 1.414 Fib extension level in a strong bullish move. The price trades well above the 30-SMA, which supports a bullish bias. Meanwhile, the RSI reached the overbought region for the first time in a while, indicating a surge in bullish momentum. However, after such a big swing, the price must pause or pull back to retest the SMA or the bullish trendline. Still, given the solid bullish bias, the uptrend might continue beyond the 1.414 Fib extension level. https://www.forexcrunch.com/blog/2024/06/21/usd-jpy-price-analysis-yen-plummets-to-7-week-lows/
2024-06-21 08:48
The Swiss National Bank cut rates on Thursday. The Bank of England held rates at 5.25% after inflation data the previous day revealed a decline to 2%. BoE policymakers said their decision not to lower rates was finely balanced. The GBP/USD outlook remains bearish, with the dollar at a five-week high against the pound. This trend is due to an increasing policy divergence between the Federal Reserve and other major central banks. Notably, the Bank of England held rates on Thursday but signaled looming rate cuts. At the same time, the Swiss Nation Bank cut rates for a second time. The dollar was strong on Friday as it became more apparent that the Fed had assumed a more hawkish stance than most other major central banks. Notably, the Swiss National Bank cut rates for the second time. Meanwhile, although the Bank of England held rates, policymakers said their decision not to lower rates was finely balanced. On the other hand, the Fed has only projected one rate cut for 2024, noting that the economy remains strong. Policymakers have remained cautious despite softer inflation. On Thursday, the Bank of England held rates at 5.25% after inflation data the previous day revealed a decline to 2%. However, policymakers are worried about underlying inflation, which remains strong. As a result, Governor Andrew Bailey said it was too soon to cut rates. Still, economists expect the first rate cut in August, while market participants expect one in September or November. All these timings would be before the Fed’s December cut. Therefore, most major central banks will have cut rates well before the US central bank, boosting the dollar. GBP/USD key events today US flash manufacturing PMI US flash services PMI GBP/USD technical outlook: New low confirms a bearish trend On the technical side, the GBP/USD price has fallen further to a new low below the 1.2700 key level. This has strengthened the bearish bias because the price now sits far below the 30-SMA. At the same time, the RSI is near the oversold region, showing solid bearish momentum. Therefore, the decline will likely continue to the next barrier at 1.2600. Here, the price might pause for a pullback before bears seek lower lows. The bearish trend will continue if the price continues, making lower lows and highs. https://www.forexcrunch.com/blog/2024/06/21/gbp-usd-outlook-dollar-soars-to-5-week-high-against-pound/
2024-06-20 10:21
The dollar was higher on Thursday after thin trading in the previous session. The Fed has remained slightly hawkish despite the recent shift in economic data. API data revealed a surge in crude inventories. The USD/CAD outlook is bearish, but the pair has risen slightly ahead of US employment and business activity data, which might give insights into the outlook for rate cuts. Meanwhile, the Canadian dollar pulled back slightly with oil amid signs of poor fuel demand. The dollar was higher on Thursday after thin trading in the previous session due to a holiday in the US. Apart from soft retail sales data, it has been a quiet week in the US, with investors now looking forward to unemployment claims and PMI data. Notably, there is more clarity on the US economy and monetary policy. Investors are more confident that the economy is heading South and inflation is cooling. The retail sales report and the Q1 GDP were some indicators of weaker economic demand. Meanwhile, the consumer and producer price indexes showed a decline in price growth. Consequently, the chances of a rate cut in September have risen. However, the confusion is that the Fed has remained slightly hawkish despite the recent shift in economic data. Policymakers are likely exercising more caution this time in case the economy surprises again and returns to growth like it did at the start of the year. As a result, they have projected just one rate cut this year. However, this may change depending on incoming data. Meanwhile, the Canadian dollar was nearly flat after a recent surge amid a rally in oil prices. However, oil retreated slightly after API data revealed a surge in crude inventories. USD/CAD key events today US jobless claims USD/CAD technical outlook: Bears must confirm reversal below 1.3700 On the technical side, the USD/CAD price has broken below its bullish trendline after showing signs of a looming reversal. Moreover, it trades below the 30-SMA with the RSI in bearish territory below 50. This new bias came after the price made a bearish engulfing candle slightly above the SMA. This was a sign that bears had gained momentum and sentiment had shifted. Consequently, the price broke below its bullish trendline. However, the decline has paused at the 1.3700 key level. This might lead to a retest of the recently broken trendline before the downtrend continues. Bears will confirm a new direction when the price breaks below 1.3700. https://www.forexcrunch.com/blog/2024/06/20/usd-cad-outlook-pair-edges-up-ahead-of-us-employment-data/
2024-06-20 09:12
Headline UK inflation returned to the 2% target for the first time in about three years. Economists expect the first BoE rate cut in August and at least two this year. The likelihood of a Fed cut in September is 67%. The GBP/USD forecast shows downside potential as the pound declines ahead of the Bank of England policy meeting. Meanwhile, the dollar held steady as traders waited for more economic data to provide clues on the path of US monetary policy. After the UK inflation report, investors are eagerly awaiting the BoE policy meeting. Although headline inflation returned to the 2% target for the first time in about three years, underlying price pressures remained hot, causing a decline in BoE rate cut expectations. A Reuters poll on Wednesday showed that economists expect the first rate cut in August and at least two cuts this year. Policymakers have remained quiet as the July 4 election approaches, so there have been few clues about the future of monetary policy in the UK. However, seven policymakers voted to maintain rates at the last meeting, while two were ready to cut. This time, analysts believe the vote distribution will either remain the same or there will be eight for a hold and one for a cut. Meanwhile, policymakers have forecasted just one rate cut in the US this year. However, economic data has pointed to the possibility of two cuts, which have kept up expectations. The likelihood of a cut in September is at 67% because inflation has eased, and the economy is slowing down. Investors will focus on unemployment claims today and PMI data on Friday to see whether the downtrend continues. GBP/USD key events today Monetary policy summary MPC official bank rate votes BoE’s official bank rate US unemployment claims GBP/USD technical forecast: Bears return as 30-SMA holds firm On the technical side, the GBP/USD price is dropping after failing to go beyond the 30-SMA and the 0.382 Fib level. This is a sign that bears are still in the lead. As a result, the RSI has fallen back below 50 into bearish territory. With this decline, bears have met the 1.2700 key support level. Given the bearish bias, GBP/USD might soon break below to target the 1.2600 level. However, if the level holds firm, bulls might make another attempt at the 30-SMA resistance. https://www.forexcrunch.com/blog/2024/06/20/gbp-usd-forecast-pound-slips-as-markets-brace-for-boe/
