2024-01-13 18:53
Inflation in Australia fell sharply in November. Consumer inflation in the US came in higher than expected. Data showed a drop in US producer inflation. Anticipate a downward trajectory in the AUD/USD weekly forecast as Australia’s inflation data solidifies the RBA’s newly adopted dovish stance. Meanwhile, across the Pacific, the US reported higher-than-expected consumer inflation, setting the stage for more downside in the pair. –Are you interested to learn more about forex options trading? Check our detailed guide- Ups and downs of AUD/USD The pair had a bearish week shaped by inflation figures from the US and Australia. Inflation in Australia fell sharply in November, strengthening the view that the RBA is done with rate hikes. Consequently, investors are still expecting 50 bps of easing in 2024. Meanwhile, the US had a mix in the inflation data. Consumer inflation came in higher than expected. As a result, investors scaled back bets on Fed rate cuts. Meanwhile, on Friday, data showed a drop in US producer inflation. However, after all this, investors are still expecting rate cuts in the US to start in March. Next week’s key events for AUD/USD Next week, traders will monitor the US retail sales and employment reports from Australia. Australia’s labor market remains tight. Notably, job vacancies in Australia saw a minor decline in the three months leading to the end of November. This indicates that worker demand remains robust despite a slight overall easing in the labor market. Still, the slight easing in the market has contributed to slower wage growth. Consequently, there is less pressure on the Reserve Bank of Australia to consider another interest rate hike. Therefore, if the labor market continues easing, it will strengthen the RBA’s bearish stance. AUD/USD weekly technical forecast: Bears take the lead, breaking 22-SMA barrier On the technical side, AUD/USD has broken below the 22-SMA, a sign that bears are challenging the bullish trend. At the same time, the RSI has dipped into bearish territory below 50, signaling a shift in sentiment. –Are you interested to learn about forex robots? Check our detailed guide- The previous bullish trend was strong, with the price making higher highs and lows above the 22-SMA support. However, bulls could not sustain a move above the 0.6800 key resistance level. At this point, bears took over, sending the price below the 22-SMA. Consequently, AUD/USD might drop further next week to reach the 0.6550 support level. This level is also near the 0.5 Fib retracement level, making a strong support zone. https://www.forexcrunch.com/blog/2024/01/13/aud-usd-weekly-forecast-aus-inflation-signals-dovish-rba/
2024-01-12 11:18
The bias remains bullish as long as it stays above the 50% Fibonacci line. The PPI and Core PPI should move the rate today. After the last rally, a retreat was natural. The USD/JPY price is trading at 145.21 at the time of writing, far below yesterday’s high of 146.41. The bias remains bullish. Surprisingly or not, the greenback depreciated versus its rivals even though the US reported higher inflation in December. The Consumer Price Index announced a 0.3% growth, beating the 0.2% growth expected and the 0.1% growth in the previous reporting period. In comparison, CPI y/y rose by 3.4%, exceeding the 3.2% growth forecasted and the 3.1% growth in November. In addition, the Core CPI aligned with expectations, while Unemployment Claims dropped to 202K from 203K, even if the specialists expected a potential growth to 209K. Today, the Japanese Economy Watchers Sentiment and the Bank Lending came in better than expected, while the Current Account disappointed. Later, the US data should move the markets. The PPI could announce a 0.1% growth versus the 0.0% growth in the previous reporting period, while Core PPI is expected to register a 0.2% growth. As you can see on the hourly chart, the price failed to stay above the median line (ml) of the ascending pitchfork, signaling exhausted buyers. Still, the correction could be only temporary. The price may only test the immediate support levels or demand zones before developing a new bullish momentum. The 144.50 and the downside 50% Fibonacci line represent key downside obstacles. The bias remains bullish if it stays above the 50% line. https://www.forexcrunch.com/blog/2024/01/12/usd-jpy-price-accumulating-buying-at-145-0-eyes-on-us-ppi/
2024-01-12 10:20
US consumer prices rose by 0.3% for the month and registered an annual growth of 3.4%. Traders believe that the BoE’s benchmark rate will decline rapidly this year. Recent data indicated a contraction in the British economy in October. The GBP/USD price analysis hinted at a subtle bearish tilt amid a strong dollar as investors assessed the impact of an upbeat US inflation report. However, there are still expectations that the Federal Reserve could cut rates as early as March. Notably, US consumer prices rose by 0.3% in December and registered an annual growth of 3.4%. This beat economists’ expectations of a 0.2% gain and a 3.2% annual rise, respectively. Meanwhile, Bank of England Governor Andrew Bailey refrained from discussing the UK’s economic outlook on Wednesday. However, he highlighted the decrease in mortgage rates. At the same time, the market perception has shifted towards the belief that the BoE’s benchmark rate will decline rapidly this year. Moreover, futures markets indicate that traders expect about four rate cuts in 2024, possibly as early as May but certainly by June. Elsewhere, recent data indicated a contraction in the British economy in October, increasing the risk of a recession. The CEO of Tesco, the UK’s largest retailer, expressed “cautious optimism” about the UK consumer in 2024. Meanwhile, Sainsbury’s reported robust Christmas food sales but noted weakness in demand for other essential products. Notably, the pound emerged as one of the best-performing currencies against the dollar in 2023, recording a gain of 5.2%, the most in six years. It was supported by some of the highest interest rates among developed economies. GBP/USD key events today The US PPI report The US core PPI report GBP/USD technical price analysis: Bulls approach strong resistance at 1.2800 On the technical side, GBP/USD is bullish as the price trades above and respects the 30-SMA support line. At the same time, the RSI respects the pivotal 50 level as support, staying in bullish territory. However, on a larger scale, the pound trades in a range with support at 1.2600 and resistance at 1.2800. Consequently, the current bullish move might pause at the 1.2800 range resistance. The bullish move can only continue if the price breaks out of consolidation. Otherwise, bears will take over at 1.2800 and target the 1.2600 support level. https://www.forexcrunch.com/blog/2024/01/12/gbp-usd-price-analysis-investors-digest-us-cpi-data/
2024-01-12 09:10
Oil rose after the US and the UK announced air and sea strikes on Houthi military targets in Yemen. US consumer prices rose in December, coming in 0.3% higher for the month. Traders estimate a 73.2% likelihood of the Fed initiating its first 25 bps cut in March. The USD/CAD outlook took a bearish turn on Friday in the wake of a dynamic shift. The Canadian dollar rose with oil prices after the announcement of air and sea strikes by the US and UK on Houthi military targets in Yemen. The strikes were in retaliation for the group’s attacks on ships in the Red Sea. Meanwhile, investors continued digesting the US inflation report. It will shape market expectations on Fed rate cuts. Consumer prices in the US rose in December, coming in 0.3% higher for the month and marking an annual increase of 3.4%. Still, traders estimate a 73.2% likelihood of the Fed starting its first 25 basis point (bps) cut in March. Moreover, they expect additional cuts after that. However, Fed officials are less optimistic. Austan Goolsbee, President of the Chicago Fed Bank, indicated uncertainty about whether there was enough progress for the Fed to start rate cuts. Moreover, investors had lost confidence in an early rate cut in the previous session. On Thursday, the Canadian dollar dropped to a four-week low against the stronger US dollar due to the higher-than-anticipated US inflation data. Initially, it raised doubts about the likelihood of an early start to Fed rate cuts. Tony Valente, a senior FX dealer at AscendantFX, commented: “With little domestic economic news, the CAD responded to the US inflation report.” USD/CAD key events today US Producer Price Index m/m US Core Producer Price Index m/m USD/CAD technical outlook: Bulls ride the channel as the 30-SMA levels out On the technical side, USD/CAD has remained in its bullish channel as the 30-SMA flattens. The bullish bias remains as the price is making higher highs and lows. Moreover, it is staying mainly above the 30-SMA. However, bullish momentum continues to weaken with each new high as the RSI is descending. Therefore, bears might soon get stronger than bulls, leading to a breakout below the channel support and a reversal in the trend. However, if bulls regain momentum at the channel support, the bullish move might continue higher to the 1.3501 resistance level. https://www.forexcrunch.com/blog/2024/01/12/usd-cad-outlook-loonie-gains-traction-as-oil-rallies/
2024-01-11 12:25
The bias remains bullish as long as it stays above the median line (ml). Higher inflation should lift the greenback. A new higher high activates further growth. The USD/CAD price is trading in the green at 1.3374 at the time of writing. The pair is struggling to stay higher despite temporary retreats. The US dollar dropped a little in the short term. On Tuesday, the US data came in better than expected, while yesterday, the Final Wholesale Inventories matched expectations. Today, the US inflation figures should have a major impact. The volatility should be high, leading to consolidation amid uncertainty. The FED is expected to deliver a 75-bps rate cut during the year as inflation decreased. Still, the Consumer Price Index m/m is expected to report a 0.2% growth in December versus a 0.1% growth in November; the CPI y/y could be reported at 3.2% above 3.1% in the previous reporting period, and the Core CPI may announce a 0.3% growth for the second consecutive month. Higher inflation should force the Federal Reserve to maintain its monetary policy. This scenario could lift the greenback. In addition, the Unemployment Claims data will be released as well. Tomorrow, the US publishes the PPI and Core PPI figures, so the volatility could remain high. The USD/CAD price found strong resistance at the ascending pitchfork’s upper median line (uml). It has also failed to take out the 50% (1.3397) retracement level. Now, it has dropped below the median line (ml) but it has failed to stay below it, signaling exhausted sellers already. The bias remains bullish as long as it stays above this dynamic support. The current retreat could represent a flag pattern. This could announce an upside continuation. Though, only a new higher high activates more gains ahead. https://www.forexcrunch.com/blog/2024/01/11/usd-cad-price-picks-momentum-near-1-3375-eying-us-cpi/
2024-01-11 10:17
Economists believe inflation will slow down in December. The Fed might start rate cuts as early as March. The Eurozone might have experienced a recession in the last quarter. Thursday’s EUR/USD outlook supports a bullish trend as the dollar dips ahead of the US inflation report. Traders are on the edge, awaiting US inflation data, a crucial report that could support up to five Fed rate cuts next year. Economists believe inflation will slow down in December. Recently, the dollar has experienced a slide as investors have grown increasingly convinced that the Fed might start rate cuts as early as March. However, some believe this is too optimistic. In a note to clients, Jane Foley, a senior FX strategist at Rabobank, said that investors are still excessively optimistic about the prospects of Fed rate cuts. Meanwhile, ECB policymakers confirmed the bank’s policy stance on Wednesday. Moreover, they stated that the Eurozone might have experienced a recession in the last quarter, and the short-term outlook is poor. Eurozone growth has remained near zero throughout 2023, and a modest pickup is anticipated this year, contributing to a moderation in inflation. Notably, Board member Isabel Schnabel acknowledged the weak near-term economic outlook. Similarly, Vice President Luis de Guindos suggested that the bloc may have entered a recession in the second half of last year. Moreover, there might be risks of future growth downturns. Investors have priced at least five rate cuts in 2024, with the first expected in March or April. However, several policymakers find this timeline excessive because price pressures remain. ECB projections anticipate inflation to return to 2% next year. However, some private forecasters disagree, suggesting that the ECB may be underestimating disinflation, the same way it missed inflation on the way up. EUR/USD key events today US consumer inflation report US initial jobless claims EUR/USD technical outlook: Buyers assume control in the consolidation area The pair is still within its recent range, with support at 1.0900 and resistance at 1.1000. However, buyers are now in the lead within the consolidation area as the price is above the 30-SMA. At the same time, the RSI is above 50, supporting bullish momentum. The price is climbing and will soon retest the range resistance. A bullish trend will emerge if buyers are strong enough to break out of consolidation. Moreover, the price would take out the 1.1101 resistance level. On the other hand, if the range resistance remains firm, sellers will resurface to retest the range support. https://www.forexcrunch.com/blog/2024/01/11/eur-usd-outlook-us-inflation-data-to-hint-potential-fed-cut/
