2024-01-24 15:45

For a complete overview of the U.S. dollar’s technical and fundamental outlook, request your complimentary Q1 trading forecast now! Most Read: British Pound Rallies on Robust UK PMIs, GBP/USD and EUR/GBP Latest The U.S. dollar, as measured by the DXY index, traded lower on Wednesday despite better-than-forecast PMI results. According to S&P Global, both manufacturing and service sector business activity accelerated at the start of the year, with the former entering expansionary territory and the latter reaching its highest level in seven months. Both indicators surprised to the upside by a wide margin. The following image shows how January Flash PMI figures stack up against expectations. Although encouraging macroeconomic data led yields to erase their early session decline, U.S. dollar remained comfortably in negative terrain. This reaction, however, could be temporary. When reality sets in and traders realize that the Fed will be unable to deliver deep interest rate cuts, as priced in by financial markets, we could see the greenback trend higher again. U.S. DOLLAR INDEX DAILY CHART Source: TradingView Looking ahead, the focus will be on US fourth-quarter GDP, to be released on Thursday, and December personal consumption expenditures, due out on Friday. If incoming information confirms that the U.S. economy is powering through and that inflationary pressures remain sticky, the U.S. dollar may have the potential to mount a moderate comeback heading into the weekend. https://www.dailyfx.com/news/forex-usd-dollar-struggles-despite-better-than-expected-us-pmi-data-gdp-pce-next-20240124.html

2024-01-24 11:05

GBP/USD and EUR/GBP Latest Analysis and Charts Services activity was at an eight-month high in January. Cable clips 1.2773 after the data release. Most Read: British Pound Weekly Forecast: Ranges Look Set to Hold, But Watch US Data The latest S&P Global PMIs showed UK services activity picking up to an eight-month high, while the composite index hit a fresh seven-month peak. Manufacturing however slipped to a three-month low. According to S&P Global chief business economist, Chris Williamson, ‘UK business activity growth accelerated for a third straight month in January, according to early PMI survey data, marking a promising start to the year. The survey data point to the economy growing at a quarterly rate of 0.2% after a flat fourth quarter, therefore skirting recession and showing signs of renewed momentum.’ ‘Businesses have also become more optimistic about the year ahead, with confidence rebounding to its highest since last May. Business activity and confidence are being in part driven by hopes of faster economic growth in 2024, in turn, linked to the prospect of falling inflation and commensurately lower interest rates.’ Mr. Williamson warned however that ‘supply disruptions in the Red Sea are reigniting inflation in the manufacturing sector. Supply delays have spiked higher as shipping is re-routed around the Cape of Good Hope.’ The latest data has seen UK rate cut expectations pared back further. The market is now forecasting around 88 basis points of rate cuts this year, after pricing more than 125 basis points of cuts at the end of last year. Cable continues to probe higher and may soon test a set of recent highs all the up to the December 28th, multi-month print of 1.2828. The next driver of cable will come from the right-hand side of the quote, the US dollar. Thursday sees the latest US durable goods and the advanced Q4 US GDP releases (13:30 UK), while on Friday, US core PCE hits the screens, also at 13:30 UK. GBP/USD Daily Price Chart Chart using TradingView Retail trader GBP/USD data show 45.75% of traders are net-long with the ratio of traders short to long at 1.19 to 1.The number of traders net-long is 5.31% higher than yesterday and 18.52% lower than last week, while the number of traders net-short is 5.14% lower than yesterday and 24.10% higher than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise. What Does Changing Retail Sentiment Mean for GBP/USD Price Action? EUR/GBP continues to test a prior level of multi-month support around 0.8550. If this is broken convincingly then the 0.8500 area looks likely to come back into focus. EUR/GBP Daily Price Chart What is your view on the British Pound – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/british-pound-rallies-on-robust-uk-pmis-gbp-usd-and-eur-gbp-latest-20240124.html

2024-01-24 10:14

Euro (EUR/USD) Analysis and Charts EUR/USD stayed in the green despite news that business activity contracted again in Jan The Composite PMI has been below the key 50 mark for eight months Still, the ECB is expected to stand pat on rates with inflation still above target January’s initial or ‘flash’ Purchasing Managers Index data for the Eurozone showed both manufacturing and service sector activity well below the fifty mark which separates expansion from contraction. The composite indicator, which marries the two, came in at 47.9. That was below the 48 level markets were expecting but slightly above December’s 47.6. That Composite measure has been below fifty for eight straight months now. Eurozone data was released just after Germany’s own version of the PMI, which was equally woeful on all counts. The Eurozone has clearly made a very sluggish start to 2024, which makes the Euro’s apparent resilience to the data surprising. One relative bright spot can be seen in the fact that overall business activity’s contraction came at the slowest pace for six months in January. The contraction in new orders was also the smallest reported by purchasing managers since June 2023. There were also some signs of a return in pricing power, with inflation rates having accelerated for three months from October’s 32-month low. A more plausible reason why the Euro has remained in the green on Wednesday might be that these data probably won’t shift many needles at the European Central Bank. It will make its first monetary policy decision of the year on Thursday and is expected to leave rates on hold despite clear signs of economic weakness, perhaps arguing that it needs more time to be sure that overall inflation has been tamed. Eurozone inflation remains above the ECB’s 2% target despite having relaxed considerably from the 10.6% peak of 2022. EUR/USD Techincal Analysis EUR/USD Chart Compiled Using TradingView Learn how to trade EUR/USD with our free trading guide EUR/USD trades in a band around the second Fibonacci retracement of the rise up to late December’s highs from the low of early October. That comes in at 1.08779, a level which the market seems reluctant to abandon for long. Still, bulls have yet to retake the previously dominant uptrend line from those October lows, which now offers resistance at 1.09106. They may need to retake this in short order if they’re to prevent the sort of ‘head and shoulders’ pattern on the daily chart which typically suggests that the market has topped out. The Euro is also stuck between its 200-day moving average of 1.0925 and its 50-day, at 1.0850. A durable break of either may set near near-term direction for the pair. --By David Cottle for DailyFX https://www.dailyfx.com/news/euro-holds-up-despite-more-shaky-pmis-ecb-rate-decision-up-next-20240124.html

2024-01-24 09:14

Australian Dollar (AUD) Analysis Additional accommodation from the PBoC and positive risk sentiment prop up AUD AUD holds up in a week devoid of high impact Aussie data IG client sentiment ‘mixed’ despite increasing long-short divergence The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Additional Accommodation from the PBoC and Positive Risk Sentiment Prop up AUD The People's Bank of China announced that it will free up bank capital held with the central bank in February in the latest effort to support credit markets and the wider economy. The Chinese economy failed to impress in its first full year post Covid lockdowns as increasing protectionism and a global growth slowdown gripped the world’s second largest economy. Discover why China is so important to Australia and often provides direction to the Aussie dollar via the core-perimeter model. While the majority of the world still fights off lingering price pressures, China has been battling deflation (year on year price declines) and now looks to jump start the dwindling economy with another round of stimulus measures. The central bank will loosen reserve requirement ratios for banks by 50 basis points (0.5%) after previously having lowered the requirement by 25 basis points in March and September last year. While this is a step in the right direction it remains to be seen if the latest move will appease investors as the massive Chinese property sector continues to weigh on investor concerns. The Australian dollar responded in a positive fashion but only provided a modest move higher against the dollar thus far. AUD Holds up in a Week Devoid of High Impact Aussie Data The Australian dollar continues to hold up around the 200-day simple moving average (SMA) which coincides with the April 2020 level of 0.6580. The recent consolidation has halted a broader decline that ensued as markets heeded the warning of prominent Fed officials around unrealistic rate cut expectations. The Aussie tends to exhibit a positive relationship with the S&P 500 as the pro-cyclical currency appears propped up by the US index despite Netflix missing earnings estimates after market close yesterday. 0.6680 is the next major level for bulls to overcome and the 0.6580 is the immediate level of support. Tier 1 US data tomorrow and Friday has the potential to add to intra-day volatility as a directional move eludes markets for now. AUD/USD Daily Chart Source: TradingView, prepared by Richard Snow IG Client Sentiment ‘Mixed’ Despite Increasing Long-Short Divergence Source: TradingView, prepared by Richard Snow AUD/USD:Retail trader data shows 68.30% of traders are net-long with the ratio of traders long to short at 2.15 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUD/USDprices may continue to fall. The combination of current sentiment and recent changes gives us a further mixed AUD/USD trading bias. Read the full IG client sentiment report for analysis on daily and weekly changes in sentiment influencing the ‘mixed’ bias. https://www.dailyfx.com/news/aud-price-update-aussie-mulling-latest-chinese-stimulus-aud-contained-20240124.html

2024-01-23 17:00

Gold and Silver Analysis, Prices, and Charts The latest Fed rate expectations show six quarter-point cuts this year. Gold and Silver struggle but the sell-off is so far contained. Learn how to trade gold with our free guide Most Read: Gold and Silver Weekly Forecast: Tempered Rate Cut Bets Pose a Headwind The latest look at US rate expectations shows six quarter-point cuts are now being priced in with the first seen in May compared to seven last week with the first in March. The yield on the rate-sensitive UST 2-year has risen from 4.14% to a current level of 4.40% over the same period, highlighting the tempering of rate cuts ahead of next week’s FOMC meeting. UST 2-Year Daily Yield Chart There are three heavyweight pieces of US economic data released this week, the first look at US Q4 GDP on Thursday, along with the latest Durable Goods release, and the Core PCE report on Friday. All of these will be closely watched by the Fed ahead of next week’s FOMC meeting. Gold is currently stuck in a rough $2,000/oz. - $2,040/oz. trading range and is likely to remain there ahead of the data releases. A series of higher lows continue to support the precious metal, while current price action on either side of the 20- and 50-day simple moving averages is clouding the issue at the current time. A break lower brings prior support at $1,987/oz. into play. Gold Daily Price Chart Chart via TradingView Retail trader data show59.13% of traders are net-long with the ratio of traders long to short at 1.45 to 1.The number of traders net long is 7.39% lower than yesterday and 3.25% lower than last week, while the number of traders net short is 2.08% lower than yesterday and 5.86% lower than last week. See how daily and weekly changes in IG Retail Trader data can affect sentiment and price action. Silver is pushing higher today after a multi-week sell-off from late December. Silver fell below $22/oz. briefly on Monday, printing a fresh multi-week nadir before recovering today to trade around 1.1% higher on the session. The silver chart remains weak, printing short-term lower highs and lows, while the CCI indicator shows the precious metal in oversold territory. The cluster of lows made in early October around $20.71 may still be under threat. Silver Price Daily Chart What is your view on Gold and Silver – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/gold-and-silver-continue-to-struggle-heavyweight-us-data-releases-later-this-week-20240123.html

2024-01-23 14:00

Crude Oil Prices and Analysis Energy prices had already gained on geopolitics this week Worries about end-demand seem to have put the brakes on US inventory data will grab attention in the coming sessions The previous session had seen price rises for both the United States West Texas Intermediate benchmark and international bellwether Brent. A suspected Ukrainian drone attack on a Baltic Sea processing terminal owned by Russian natural gas giant Novatek was behind part of that move. News that US and United Kingdom forces had again launched airstrikes against Houthi rebels in Yemen overnight added some early support to prices but that has faded as the session has progressed. Away from global conflicts and their immediate effects on production, the market is still worried about a fundamentally oversupplied market meeting economic outlooks uncertain at best. China remains a particular concern given its tepid economic recovery and cratering consumer confidence. Beijing has announced a raft of measures aimed at propping up demand but has so far failed to produce the sort of ‘big bazooka’ that would overwhelm energy traders’ doubts. The market will get some inventory snapshots out of the US this week. The American Petroleum Institute’s crude oil stock roundup is due after the European markets close on Tuesday It’s expected to show a drawdown of three million barrels in the week of January 19 and might support at least US prices if so. The Energy Information Authorities' broader look at petroleum product stockpiles is coming up on Wednesday and will likely attract more market attention. WTI Crude Oil Prices Technical Analysis WTI Daily Chart Compiled Using TradingView The typical lower high/higher low pattern of a pennant formation remains in place on the chart. This should give bulls some pause as, typically a continuation pattern, the pennant ought to suggest a further leg lower once it resolves itself. However, the market has shown little interest in breaking conclusively to the downside over the past three weeks, since its break above the most recent downtrend band. It might perhaps be better to think of current action as a broad range trade between December 26’s significant intraday peak of $76.17/barrel and January 3’s low of $68.99, with near-term direction likely decided by which of those breaks first. On an upside move bulls will eye resistance at the peaks of late November, in the $77.50 area. December 13’s six-month low of $67.73 will beckon as support on a fall below that lower boundary. Sentiment toward US crude at current levels is extremely bullish according to data from IG Group. That finds the market long to the tune of a remarkable 76%. While this looks positive at face value, it also looks more than a little overdone and may mean contrarian short plays offer rewards. --By David Cottle for DailyFX https://www.dailyfx.com/news/crude-oil-prices-retrace-despite-news-of-more-us-uk-strikes-in-yemen-20240123.html