2024-01-15 14:30

EUR/USD Forecast - Prices, Charts, and Analysis German 2023 GDP confirmed at -0.3%. The Euro is marginally higher as the US dollar takes a break. Price adjusted annual German GDP was 0.3% lower in 2023 than in the previous year as ‘overall economic development faltered in Germany in 2023 in an environment that continues to be marked by multiple crises’ according to German Federal Statistical Office, Destatis. German 2022 GDP was downgraded by 0.1% to 1.8%. Ahead this week, final December German and Euro Area inflation and ZEW reports take center stage on the data calendar, followed by the minutes of the last ECB monetary policy meeting. The Euro picked up a very small bid late morning after ECB governing council member Dr. Joachim Nagel said that it was ‘too early’ to talk about rate cuts, that inflation was still ‘too high’ and that markets are sometimes ‘over-optimistic’. Financial markets however continue to price in a series of ECB rate cuts this year with the first 25bp cut seen at the April meeting. EUR/USD continues to trade in a tight range although biased towards the upside, The pair are supported by the short-dated 20-day simple moving average, while the 50-day sma is currently capping gains. In the short-term, 1.1000 will cap a further move higher, while the 50-day sma at 1.0902 is set to act as support ahead of 1.0900. EUR/USD Daily Chart Chart Using TradingView IG retail trader data show 50.89% of traders are net-long with the ratio of traders long to short at 1.04 to 1.The number of traders net-long is 18.15% higher than yesterday and 6.47% higher than last week, while the number of traders net-short is 5.41% higher than yesterday and 5.41% lower than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall. What is your view on the EURO – 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/euro-eur-picking-up-a-small-bid-in-quiet-trade-us-markets-closed-20240115.html

2024-01-15 12:00

Article by IG Senior Market Analyst Axel Rudolph FTSE 100, DAX 40, Nikkei 225 Analysis and Charts FTSE 100 tries to recover amid slightly better month-on-month GDP reading The FTSE 100, which last week slid to the 200-day simple moving average (SMA) at 7,573 on a higher-than-expected US CPI inflation reading, still tries to recover amid quiet trading as the US is shut for Martin Luther King Jr. Day. Resistance sits at Friday’s 7,657 high, a rise above which could lead to last Thursday’s 7,694 high being reached. Overall downside pressure is likely to remain prevalent while the 7,694 level isn’t overcome. Above it sits resistance between the September and December highs at 7,747 to 7,769. A fall through Thursday’s 7,573 low would push the 55-day simple moving average (SMA) and October-to-January uptrend line at 7,554 to 7,551 to the fore. FTSE 100 Daily Chart See how changes in daily and weekly sentiment can affect the FTSE 100 outlook: DAX 40 remains bullish The DAX 40 index continues to look bid as German wholesale prices come in at a weaker-than-expected -0.6% in December and as market participants look forward to German full-year GDP growth numbers and Eurozone industrial production. The DAX 40’s initial rise above Friday’s 16,753 Harami high is positive, provided that the index remains above Friday’s 16,607 low as the US market is shut and trading is likely to see less than average volume on Monday. Below 16,607 lies the January support line at 16,556 and last week’s 16,535 low. A rise above Monday’s intraday high at 16,792 would probably engage last week’s high at 16,841. DAX 40 Daily Chart The Nikkei 225 breaches the 36,000 mark The Nikkei 225 is on fire and has broken through the minor 36,000 barrier earlier this morning as it continues to surge towards the 40,000 mark ahead of Friday’s Japan inflation data. Immediate bullish pressure will remain in play while no slip through Monday’s intraday low at 35,552 is seen. Above it minor support sits at last week’s 35,813 high. The next upside targets are the 37,000 level and the 38,957 October 1989 record peak. Nikkei 225 Daily Chart https://www.dailyfx.com/news/ftse-100-dax-40-stable-as-nikkei-225-surges-ahead-20240115.html

2024-01-15 09:14

FX Week Ahead (DXY, GBP/USD, AUD/USD and USD/JPY) Major event risk stemming from the UK: unemployment and inflation data US rates market ramps up the likelihood of cuts from March, bond yields sour, but DXY maintains trading range possibly on safe haven appeal Chinese Q4 GDP data to inform global economic outlook The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library US Dollar Hangs on Despite Weaker Treasury Yields and More Aggressive Rate Cut Forecasts The US dollar holds its current trading range despite lower yields and more imminent rate cuts. The US 2-year yield continues its six-day decline and markets anticipate nearly 25 basis point cuts each meeting from March until November. However, keep in mind the Fed tend not to adjust rates in the lead up to presidential elections meaning we effectively have fewer windows for the Fed to act. US 2-Year Treasury Yields Source: TradingView, prepared by Richard Snow The US Dollar Basket, often viewed as a proxy for USD performance, has traded within a range for the better part of the last fortnight. The major 103.00 level has capped dollar upside with the 200 and 50-day simple moving averages adding to the zone of resistance. USD faces a number of headwinds including declining yields, more imminent prospect of rate cuts and easing price pressures. Implied Fed Funds Rate via Fed Funds Futures Market Source: Refinitiv, LSEG, prepared by Richard Snow Despite last month’s slightly hotter CPI readings, inflation is expected to continue dropping as prior base effects (resulting in upside risks to inflation forecasts) are likely to have come to an end. USD appears to be holding onto the range due to its safe haven appeal after the joint US and UK strikes on Houthi targets at the end of last week. Gold, the most notable safe haven asset rose into the weekend. US Dollar Basket Daily Chart Source: TradingView, prepared by Richard Snow GBP/USD Volatility Expected to Pick up in Response to Major Economic Data The UK is due to release major jobs, average earnings and inflation data this week. The Bank of England will keep an eye on average earnings, although, this has been less of a focal point for policy setters as services inflation has occupied more attention in recent months. UK inflation is expected to see further improvement. GBP/USD has crept higher but continues to show reluctance to advance above the recent swing high. Daily price ranges have been modest, as has volatility – a situation that may change this week in light of the incoming data. Price action trades above the 200 SMA after the golden cross was observed but immediate resistance at 1.2794 comes into play at the start of the week, at least until Tuesday when the data comes rolling in. Given the data flow, the recent high of 1.2828 has the potential to witness a test, particularly if the US dollar succumbs to bearish pressure or responds to easing geopolitical tension. On the downside, 1.2736 appears as immediate support, followed by 1.2585 some distance away. GBP/USD Daily Chart Source: TradingView, prepared by Richard Snow AUD/USD Unable to Capitalise on Bullish Potential – Drifts Toward Trendline Support Despite a sizeable trade surplus update earlier this month for November, the Aussie has struggled to maintain any bullish momentum. AUD/USD now heads towards trendline support and the 50 SMA which provides a solid decision point for the pair before assessing the next move. If indeed the US dollar dips lower this week, we could see a bounce higher in AUD/USD but any upside potential may be limited by China’s Q4 data which is out on Wednesday. The Chinese economy continues to witness an uneven recovery with improving export data in December but weakening credit growth, not to mention the deflation problem which is ongoing. Source: DailyFX, prepared by Richard Snow USD/JPY in Focus Ahead of Japanese Inflation Data – BoJ Urgency Subsides USD/JPY trades higher this morning after previously finding resistance at the 50 SMA (blue line) and the 146.50 level. The yen has lost ground against the dollar after rising inflation and wage growth data lacked persistence. Recent CPI and wage growth data has tempered calls for the Bank of Japan to step away from negative rates. On Thursday, Japanese inflation data for December will add to the narrative, either building on the case for policy change or working against it if we see a move lower. Channel support and the 145 level prop up price action, with 150 still the major level to the upside but US dollar upside remains in doubt. USD/JPY Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/fx-week-ahead-gbp-usd-aud-usd-and-usd-jpy-20240115.html

2024-01-14 18:00

Markets Week Ahead: Gold, Euro, British Pound, US Dollar US equities continue to press against recently made multi-year highs despite growing geopolitical risk. The coordinated US/UK action against Houthi rebels in Yemen is set to provoke reprisals, yet despite this, US equities are booming. The US earnings season started on Friday with a group of US banks opening the proceedings. In Asia, the Nikkei 225 continues to print new multi-decade highs as the Bank of Japan looks set to keep monetary policy looser for longer. Crude Oil Latest: Heightened Geopolitical Tensions Push Oil Prices Higher DAX, Dow and Nasdaq 100 in Strong Form Ahead of US Inflation The US dollar has had a mixed few days and ends the week flat. Expectations remain that the Federal Reserve will cut rates six times this year for a total of 150 basis points, despite pushback from various Fed members, and this continues to weigh on the greenback. On the flip side, the dollar is getting a small bid due to the troubles in the Red Sea and surrounding area. In this environment, it is going to be difficult for the US dollar to make a concerted break, one way or another. US Dollar at Critical Juncture After US CPI, Setups on EUR/USD, USD/JPY and GBP/USD US Dollar Index In the cryptocurrency space, eleven spot Bitcoin ETFs were finally approved by the SEC despite a week of mixed messages and fake tweets. Bitcoin traded just below $49k on Thursday before the market turned lower, leaving BTC/USD trading just below $43k. Despite the sell-off, Bitcoin retains a positive long-term outlook. Bitcoin Daily Chart Technical and Fundamental Forecasts – w/c January 15th British Pound Weekly Forecast: Big UK Data Week May Not Mean Big Moves Recent bullish price action, combined with unimpressive GDP figures, provides a very uncertain landscape for the pound in a big week for UK data. Euro Weekly Forecast: Suppressed Weekly Range Emphasises Key Levels The euro’s lack of volatility underscores key horizontal levels and the potential for range trading. EU inflation and updated sentiment data are unlikely to move the dial significantly. Gold Price Weekly Forecast: Gold Rallies on US Rates, Geopolitical Worries Escalating tensions in Yemen have boosted gold’s allure going into the weekend and with short-dated US Treasury yields falling further, XAU/USD may have more room to run. US Dollar Forecast: Reversal Possible; Setups on EUR/USD, USD/JPY, GBP/USD This article explores the week-ahead outlook for the U.S. dollar, examining important catalysts that could guide the performance of key currency pairs such as EUR/USD, GBP/USD and USD/JPY. Learn How to Trade Gold with our Free Guide: https://www.dailyfx.com/news/markets-week-ahead-gold-bid-us-dollar-struggles-us-equities-eye-fresh-highs-20240114.html

2024-01-14 06:00

US DOLLAR OUTLOOK – EUR/USD, GBP/USD, USD/JPY The U.S. dollar has largely stalled its rebound, consolidating around the 102.00 level in recent days U.S. interest rates expectations shifted in a dovish direction last week, with traders pricing in nearly 160 basis points of easing for the year Dovish wagers on the Fed's path could be scaled back if central bank officials started pushing back against Wall Street’s projections – a situation that could boost yields and the U.S. dollar Most Read: US Dollar at Critical Juncture after US CPI, Setups on EUR/USD, USD/JPY, GBP/USD U.S. interest rate expectations turned quite dovish last week even though December headline and core inflation figures surprised to the upside. The chart below shows that traders are now discounting almost 160 bp of easing for 2024, 30 bp higher than seven days ago. In this context, the U.S. dollar (DXY) has stalled its recovery, consolidating slightly above the 102.00 level since the start of the year. Source: TradingView Although the U.S. central bank is likely to reduce borrowing costs later this year, the deep rate cuts priced in by market participants seem extreme for an economy displaying remarkable resilience and still experiencing above-target and sticky inflation. Given current conditions, it would not be surprising to see traders scale back dovish wagers soon, paving the way for a market reversal. For a complete analysis of the euro’s medium-term prospects, request a copy of our Q1 forecast! EUR/USD TECHNICAL ANALYSIS EUR/USD fell modestly on Friday, but remained above support near 1.0930. If this technical floor holds, there is potential for prices to resume their upward journey in the near term, in which case, we can’t rule out an advance towards 1.1020. Continued strength may then redirect attention to 1.1075/1.1095, followed by 1.1140. On the flip side, should bearish momentum intensify and drive the exchange rate below 1.0930, the possibility of a retracement towards 1.0875 emerges – a key area where the 50-day simple moving average converges with the lower limit of a short-term ascending channel. On further weakness, sellers may initiate an assault on the 200-day SMA. EUR/USD TECHNICAL CHART EUR/USD Chart Prepared Using TradingView USD/JPY TECHNICAL ANALYSIS USD/JPY rallied early last week, but its upward momentum started fading when the pair failed to push past resistance near 146.00, eventually leading to a pullback towards support at 144.65. Bulls must defend this floor at all costs; failure to do so could expose the 200-day simple moving average at 143.60. Continued losses from this point onward could draw attention to the December lows below the 141.00 mark. In the event of bulls regaining control of the market, technical resistance appears at 146.00, right around the 50-day simple moving average. If history is a guide, the pair could be rejected from this region on a retest, but a successful breakout could set the stage for a rally towards 147.25, slightly below the 100-day simple moving average. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView Interested in learning how retail positioning can offer clues about GBP/USD’s short-term direction? Our sentiment guide has all the answers you seek. Get the complimentary guide now! GBP/USD TECHNICAL ANALYSIS GBP/USD was largely directionless on Friday, fluctuating around overhead resistance in the 1.2765 area. Sellers must staunchly protect this technical ceiling; failure to do so could trigger an upward move toward the December peak situated above the 1.2800 level. On further strength, the bulls might gather the confidence to mount an attack on the psychological 1.3000 threshold. Conversely, if sellers regain the upper hand and trigger a selloff, primary support looms at 1.2675, which represents the lower boundary of a medium-term ascending channel in play since October. While cable is likely to find stability in this region during a pullback, a breakdown could open the door for a decline towards 1.2600. Subsequent losses beyond this level may prompt interaction with the 200-day SMA. GBP/USD TECHNICAL CHART GBP/USD Chart Prepared Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-forecast-reversal-possible-setups-on-eur-usd-usd-jpy-gbp-usd-20240114.html

2024-01-12 16:40

Most Read: Are Gold Prices and the Nasdaq 100 at Risk of a Large Correction? U.S. interest rate expectations have shifted in a more dovish direction over the past few trading sessions, despite higher-than-expected U.S. inflation figures. Traders are now discounting more than 155 basis points of easing for the year, compared to 130 basis points before the end of last week. Against this backdrop, the U.S. dollar, as measured by the DXY index, has halted its recovery, pushing towards the 102.00 level. The chart below displays the implied yields for all 2024 Fed funds futures contracts. Source: TradingView For a complete overview of the U.S. dollar’s technical and fundamental outlook, request your complimentary Q1 trading forecast now! Although the Fed is poised to reduce borrowing costs in 2024 in line with its guidance, the deep cuts priced in by the markets are unlikely to materialize. With the U.S. economy holding up remarkably well and progress on disinflation stalling, policymakers will be reluctant to adopt a very accommodative stance for fear of further loosening financial conditions and complicating the path to price stability. In light of recent developments, it wouldn't be surprising to witness Fed officials taking a proactive stance in the coming days and weeks to push back against the excessively dovish outlook contemplated by Wall Street. This strategy could help stabilize Treasury yields before a potential turnaround, a scenario that could be bullish for the broader U.S. dollar in the near term. Fine-tune your trading skills and stay proactive in your approach. Request the EUR/USD forecast for an in-depth analysis of the common currency’s medium-term prospects! EUR/USD TECHNICAL ANALYSIS EUR/USD displayed a subdued performance on Friday, but maintained its position above technical support at 1.0930. Should this floor hold firm, there is potential for the pair to resume its upward trajectory in the coming trading sessions, with a move toward 1.1020 being within reach. Continued strength may then redirect focus to 1.1075/1.1095, followed by 1.1140. Conversely, in the scenario where bearish momentum accelerates and the exchange rate falls below 1.0930, a retracement towards 1.0875 becomes plausible. This particular region holds significance as it aligns with both the 50-day simple moving average and the lower boundary of a short-term ascending channel. Further weakness in the market could potentially lead to a retest of the 200-day SMA. EUR/USD TECHNICAL CHART EUR/USD Chart Prepared Using TradingView GBP/USD TECHNICAL ANALYSIS GBP/USD was largely flat on Friday, trading slightly below overhead resistance at 1.2765. Sellers must defend this ceiling at all costs; failure to do so could spark a rally toward the December highs located above the 1.2800 handle. On further strength, the bulls may get the courage to initiate an assault on the psychological 1.3000 level. On the flip side, if bearish pressure resurfaces and cable pivots lower, initial support appears at 1.2675, which corresponds to the lower limit of a medium-term ascending channel. While prices are likely to bottom out in this area on a pullback, a breakdown could pave the way for a drop towards 1.2600. Subsequent losses from this point onward could bring the 200-day SMA into play. GBP/USD TECHNICAL CHART GBP/USD Chart Prepared Using TradingView USD/JPY TECHNICAL ANALYSIS USD/JPY rallied earlier this week, but its ascent lost impetus as prices struggled to surpass resistance at 146.00. To reignite upward momentum, a clear and decisive push above the 146.00 mark is required - a level that aligns with the 50-day simple moving average. Such a development might pave the way for a rally towards the 147.00 handle. Conversely, if sellers regain firm control of the market, initial support looms at 144.65. Bulls need to staunchly protect this floor; failure to do so could usher in a pullback towards the 200-day simple moving average in the vicinity of 143.60. Subsequent losses could attract attention to the December lows below the 141.00 threshold. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-at-critical-juncture-after-us-cpi-setups-on-eur-usd-usd-jpy-gbp-usd-20240112.html