2024-03-06 11:47
Staying near the upper median line signaled an imminent breakout. The R2 represents a potential target. The BOC and the US data should have a major impact today. The EUR/USD price is trading in the green at 1.0877 at the time of writing. The pair seems determined to extend its growth amid broader dollar weakness. Fundamentally, the US ISM Services PMI dropped from 53.4 points to 52.6 points, below the 53.0 points expected. Meanwhile, Factory Orders reported a 3.6% drop, more versus the 3.1% drop estimated. On the other hand, the German Final Services PMI and the Eurozone Final Services PMI came in better than expected, while the Eurozone PPI registered a 0.9% drop again. Today, the German Trade Balance came in better than expected, at 27.5B above 21.0B expected, while the Retail Sales rose by 0.1% as expected. Later, the US economic figures and the BOC should bring sharp movements. The ADP Non-Farm Employment Change could jump from 107K to 149K, while JOLTS Job Openings may drop from 9.03M to 8.80M. Also, the Fed Chair Powell Testifies represents a high-impact event, so anything could happen. Furthermore, the BOC is expected to keep the Overnight Rate at 5.00%, but the BOC Press Conference should have a major impact. From a technical point of view, the EUR/USD price stayed near the upper median line (uml) indicating an imminent breakout and continuation. As you can see on the hourly chart, the price jumped and stabilized above this broken dynamic resistance, signaling further growth. The breakout was confirmed, and now it has passed above the former high of 1.0865 and through the weekly R1 of 1.0870. These represented upside obstacles, so more gains are in the cards. The 1.09 psychological level and the weekly R2 of 1.0903 are seen as the next targets. https://www.forexcrunch.com/blog/2024/03/06/eur-usd-price-continues-upside-ahead-of-us-adp-ecb/
2024-03-06 10:02
Market participants eagerly await Powell’s speech before Congress. The US released data revealing weaker growth in the services sector. Data on Wednesday showed Australia experienced slower economic growth in Q4. Today’s AUD/USD forecast leans bullish as the dollar weakens ahead of Powell’s testimony to Congress. This weakness extended from the previous session when the US released downbeat economic data. Market participants eagerly await Powell’s speech before Congress, which might contain clues on the outlook for Fed policy. Powell will likely reiterate the view that the Fed is in no hurry to cut interest rates. However, any dovish inclination could further weaken the dollar, allowing the AUD/USD to rise. Dollar weakness started on Tuesday when the US released data revealing weaker growth in the US services sector. Consequently, markets gained confidence that higher interest rates were slowing the economy. Therefore, the Fed might be more inclined to start cutting interest rates in June. Similarly, rate-cut bets increased in Australia after data on Wednesday showed slower economic growth in Q4. Higher interest rates in Australia are starting to weaken economic growth. At the same time, inflation in the country is slowing, prompting the RBA to start thinking about the first rate cut. GDP rose 0.2% in Q4 missing forecasts of 0.3% growth. The report indicated a rising cost of living for Australian consumers. Notably, the RBA remains relatively hawkish despite the drop in headline inflation. According to the central bank, services inflation remains persistent, needing higher interest rates. As a result, markets expect the first RBA rate cut to come in August. AUD/USD key events today US ADP Non-Farm Employment Change Fed Chair Powell Testifies JOLTS Job Openings AUD/USD technical forecast: Bulls take the lead after bullish divergence. On the technical side, there has been a shift in sentiment to bullish as the price has broken above the 30-SMA. At the same time, the RSI has broken above the 50 mark and now trades in bullish territory. The shift in sentiment comes after the price failed to make a new low and the RSI made a bullish divergence. In the previous downtrend, although the price broke below the previous low, it failed to close below. Therefore, it made a big wick showing bulls were challenging further declines. Soon after, bulls gained momentum and broke above the 30-SMA resistance. However, to confirm this new direction, the price must make a higher high above the 0.6530 key resistance level. https://www.forexcrunch.com/blog/2024/03/06/aud-usd-forecast-dollar-retreats-ahead-of-powell-testimony/
2024-03-06 09:12
Tokyo’s inflation re-accelerated in February, beating the Bank of Japan’s targets. Policymakers in Japan have noted that the economy is recovering moderately and the wage outlook is improving. The US services sector experienced weaker growth in February. Wednesday’s USD/JPY price analysis unveils a bearish tone, driven by the yen’s impressive ascent due to signs of accelerating inflation. Adding to the currency pair’s downward pressure, the dollar softened after data in the previous session revealed weaker service sector growth. Tokyo’s inflation re-accelerated in February, according to data on Tuesday, beating the Bank of Japan’s targets and supporting a looming shift in policy. However, underlying inflation slowed, indicating the policy shift might not be as aggressive as markets expect. Authorities in Japan have noted that the economy is recovering moderately, and the wage outlook is improving. Notably, Deputy Chief Cabinet Secretary Hideki Murai on Tuesday said that Japan was on the path of achieving rising inflation and wages. Moreover, the government is working to broaden pay increases in the country. On the other hand, the dollar was weak after overnight losses due to poor economic data. The US services sector experienced weaker growth in February as employment fell. As a result, investors are more confident that the US economy is slowing, allowing the Fed to consider a rate cut in June. Additionally, there was caution in the market ahead of Powell’s testimony to Congress, which might have clues on the policy outlook. However, there is a high chance that the Fed chair will maintain his hawkish tone. Therefore, any dovish message could lead to a big decline in the dollar. USD/JPY key events today ADP Non-Farm Employment Change Fed Chair Powell Testifies JOLTS Job Openings USD/JPY technical price analysis: Range support crumbles in solid bearish plunge On the technical side, USD/JPY is finally breaking below its range support with a solid bearish candle. This is a sign that the bearish divergence in the RSI is finally playing out. Additionally, the price has broken below the previous low and trades well below the 30-SMA, showing the start of a downtrend. Meanwhile, the RSI is about to dip into the oversold region, supporting solid bearish momentum. With this new decline, the price will likely soon retest the 0.382 Fib retracement level. If the downtrend continues lower, bears will reach the second target at the 0.618 Fib retracement level. https://www.forexcrunch.com/blog/2024/03/06/usd-jpy-price-analysis-yen-soars-on-signs-of-inflation-growth/
2024-03-05 12:46
The gold price is bullish as long as it stays above the upper median line (uml). Taking out the immediate resistance levels activates further growth. The fundamentals should be decisive tomorrow. The gold price is trading in the green zone at $2,126 at the time of writing. The metal maintains a strong bullish trend and is looking to hit fresh highs. The US dollar dropped again in the last few hours, weakening the greenback. Gold price jumped higher even though the Switzerland Consumer Price Index reported a 0.6% growth versus the 0.5% growth estimated after the 0.2% growth in the previous reporting period. Today, the US ISM Services PMI represents a high-impact event and could bring more action. It is expected to drop from 53.4 points to 53.0 points, while the Factory Orders may report a 3.1% drop. Tomorrow, the fundamentals remain in the driving seat. The Australian GDP may announce a 0.2% growth, the US ADP Non-Farm Employment Change could jump to 149K from 107K, while the JOLTS Job Openings indicator may drop from 9.03M to 8.80M. Furthermore, the BoC is expected to keep the Overnight Rate at 5.00%, while Fed Chair Powell Testifies could change the sentiment. The XAU/USD ignored the upper median line (uml) and the weekly R1 of $2,105. Now it challenges the 150% Fibonacci line. This represents a dynamic resistance, so a valid breakout may announce further growth. The weekly R2 of 2129 stands as a static resistance. The price needs to take out this obstacle as well to approach the first warning line (wl1) of the major ascending pitchfork. Gold is strongly bullish, despite minor retreats. Short-term drops could bring us new long opportunities. The upper median line (uml) represents dynamic support, so XAU/USD remains bullish as long as it stays above it. https://www.forexcrunch.com/blog/2024/03/05/gold-price-soars-as-dollar-weakens-eyes-on-us-data/
2024-03-05 10:10
China decided to stick with its economic growth target of 5%. There was a significant surge in Australia’s current account surplus in Q4. Markets are eagerly anticipating Powell’s testimony on Wednesday. The AUD/USD price analysis revealed a bearish tone on Tuesday as the currency fell after disappointing news from China. Notably, China decided to stick with its economic growth target of 5%. However, analysts believe achieving this target will require more stimulus than what is currently there. The Australian dollar is sensitive to news from China and is considered a proxy for the yuan. As a result, a poor outlook on China’s economy weighs on the currency. Meanwhile, investors shrugged off data from Australia revealing a significant surge in the country’s current account surplus in Q4. Consequently, there is less likelihood of a recession. Additionally, government spending rose in the same period. This upbeat data adds significantly to estimates of fourth-quarter gross domestic product. A well-performing economy allows the RBA room to hold high-interest rates for longer. Although investors do not expect any more rate hikes from the RBA, the first rate cut might not come until September. Meanwhile, the possible timing for rate cuts in the US could soon change as investors await more economic data. Additionally, markets are eagerly anticipating Powell’s testimony on Wednesday. In his speech, he might give clues on when the Fed will start cutting rates. On the other hand, major data from the US includes the nonfarm payrolls report. Economists expect a slowdown in employment last month. However, US employment figures have constantly surprised markets. Another blockbuster report could lead to more declines in AUD/USD as the dollar rallies. AUD/USD key events today US ISM Services PMI AUD/USD technical price analysis: Previous low broken, eying a new bottom On the technical side, the AUD/USD pair has broken below the previous low and will likely soon make a new low. Moreover, the price has fallen far below the 30-SMA, showing a steep bearish move. Meanwhile, the RSI is heading for the oversold region, indicating solid bearish momentum. With such strong bearish momentum, the price will likely soon reach the 0.6450 support level. Additionally, if bulls return at any point, they will find it hard to break above the 30-SMA and the bearish trendline. A bearish trend will develop if the price continues to make a series of lower lows and highs. https://www.forexcrunch.com/blog/2024/03/05/aud-usd-price-analysis-chinese-news-weigh-down-aussie/
2024-03-05 08:55
Oil prices fell due to demand concerns after China’s disappointing pledge to improve its weak economy. Traders are gearing up for the Bank of Canada’s monetary policy decision. There is a 64% chance that the Fed will cut rates starting in June. The USD/CAD outlook signals optimism as the Canadian dollar weakens amid falling oil prices. Additionally, investors remained cautious ahead of the Bank of Canada monetary policy meeting. Oil prices fell due to demand concerns after China’s pledge to improve its weak economy failed to impress investors. China is the largest consumer of oil. Therefore, a poor economy hurts oil demand, leading to a decline in prices. Meanwhile, a decline in oil prices hurts the Canadian dollar, as Canada is a net oil exporter. At the same time, traders are gearing up for the Bank of Canada’s monetary policy decision on Wednesday. Markets expect the central bank to hold rates at 5%. However, they will focus on the statements made at the meeting regarding future policy decisions. Traders will especially be on the lookout for clues on the timing of rate cuts in Canada. The BoC might start cutting rates in April or June. Meanwhile, investors are also expecting more insights about the timing of rate cuts in the US when Powell testifies before Congress on Wednesday. At the moment, there is a 64% chance that the Fed will cut rates starting in June. Additionally, markets now expect a total reduction of 75bps in interest rates this year. This is in line with Fed forecasts, showing a significant drop in rate-cut expectations. USD/CAD key events today US ISM Services PMI USD/CAD technical outlook: Bulls hit a wall at the crucial 1.3600 level On the technical side, USD/CAD is climbing after respecting the 30-SMA support line. The bullish bias is strong, as the price has maintained its position above the SMA and the RSI above 50. Furthermore, the price currently trades in a bullish channel. Therefore, it is making higher highs and lows on a larger scale. At the moment, the price is approaching the channel resistance. However, bulls have encountered solid resistance at the 1.3600 key level. Still, after finding support at the 30-SMA, the price is rising with renewed strength. Therefore, there is a high chance it will make a new high above 1.3600. https://www.forexcrunch.com/blog/2024/03/05/usd-cad-outlook-weaker-oil-weighs-on-loonie-eyes-on-boc/
