2023-11-22 11:04

EUR/USD Forecast - Prices, Charts, and Analysis FOMC minutes give little away, leaving the US dollar rudderless. UK Autumn Statement may give Sterling a boost. The Federal Reserve is very unlikely to cut interest rates anytime soon and may hike them if inflation remains uncomfortably high. The minutes showed that monetary policy will remain restrictive until inflation towards goal (2%) but that FOMC members believe that the central bank can ‘proceed carefully’ when making any decisions. Overall the minutes were fairly balanced and left the US dollar with little to work on. The latest CME FedFund probabilities show the first 25 basis point US rate cut in May next year with a total of 100 basis points expected to be shaved off US borrowing costs next year. US Dollar Index (DXY) Continues Recovery as FOMC Minutes Have Minimal Effect EUR/USD is trading on either side of 1.0900 after having hit a multi-month peak around 1.0965 on Tuesday. The chart set-up remains positive with support provided by all three simple moving averages, especially the recent break of the 200-dsma. Near-term support is seen in the 1.0865 to 1.0885 area ahead of the 200-dsma at 1.0807. EUR/USD Daily Price Chart IG Retail trader data shows 7.38% of traders are net-long with the ratio of traders short to long at 1.68 to 1.The number of traders' net long is 7.09% higher than yesterday and 1.45% higher than last week, while the number of traders' net short is 2.04% lower than yesterday and 2.59% higher than last week. EUR/GBP gave back all its recent gains in one move yesterday and currently rests on an old level of resistance turned support. The move, a combination of a stronger Sterling complex and a marginally weaker Euro backdrop has seen the pair trade below the 20-dsma and head towards the 50- and 200-dsmas. The 50- and 200-dma are looking to produce a golden cross, as early as today, and this may support the pair. The overall pattern of higher lows and higher highs should see EUR/GBP turn higher soon. EUR/GBP Daily Chart All Charts Using TradingView 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-latest-eur-usd-and-eur-gbp-leaking-lower-ahead-of-thanksgiving-break-20231122.html

2023-11-22 10:04

Article by IG Senior Market Analyst Axel Rudolph FTSE 100, S&P 500, Russell 2000 - Analysis and Charts FTSE 100 consolidates below last week’s high The FTSE 100’s recent attempts to reach last week’s high at 7,535 have so far failed with the index being capped by the 55-day simple moving average (SMA) at 7,505 as US futures and Asian stocks mostly decline after Nvidia earnings which practically mark the end of the US earnings season ahead of Thanksgiving. While the UK blue chip index remains above Tuesday’s 7,446 low, it remains in an uptrend, though, and is more likely to revisit Friday’s 7,516 high than to revert lower. Further up beckons the current November peak at 7,535, a rise above which would target the 200-day simple moving average (SMA) at 7,595. Minor support can be found around the 9 November high at 7,466 ahead of Tuesday’s 7,446 low. Further down lies Thursday’s 7,430 low, followed by the early September and early October lows at 7,384 to 7,369. FTSE 100 Daily Chart S&P 500 advance stalls around the September peak at 4,540 The sharp rally in the S&P 500 has reached the early and mid-September highs at 4,516 to 4,540 around which it is losing upside momentum after Fed minutes showed no inclination to cut rates by next May. A minor pullback ahead of the prolonged Thanksgiving weekend may thus ensue with the mid-November high at 4,524 being revisited. Further minor support sits at the 11 September high at 4,491 and still further down around the 24 August high at 4,474. A rise above this week’s 4,557 high would put the 4,607 July high on the cards. S&P 500 Daily Chart Russell 2000 range trades below its 1,833 current November high The Russell 2000, the great underperformer of US stock indices with only a 2% positive performance year-to-date, has been trading in a tight sideways range below its 200-day simple moving average (SMA) and last week’s high at 1,822 to 1,833 ahead of Thanksgiving. While Thursday’s low at 1,767 underpins, the October-to-November uptrend remains intact. Below it the 55-day simple moving average (SMA) at 1,757 may also act as support, were it to be revisited. Immediate resistance can be seen at Monday’s 1,813 high. A rise above the current 1,833 high would engage the mid-September high at 1,874. Russell 2000 Daily Chart https://www.dailyfx.com/news/ftse-100-s-p-500-and-russell-2000-consolidate-ahead-of-thanksgiving-20231122.html

2023-11-22 07:56

USD/CAD ANLAYSIS & TALKING POINTS Moderating Canadian inflation unable to shake CAD bulls just yet. US durable goods orders, consumer sentiment and BoC’s Macklem in focus later today. Will channel support hold firm once again? CANADIAN DOLLAR FUNDAMENTAL BACKDROP The BoC’s Governor Tiff Macklem is scheduled to speak later today and with his recent comments around minimal growth and now softening inflation, cautious messaging may be apparent. Currently, money markets anticipate toughly 80bps of cumulative rate cuts by December 2024 with monetary easing set to begin around April/June. BOC INTEREST RATE PROBABILITIES Source: Refinitiv Crude oil will still play a major role for the loonie as markets keenly await the OPEC+ meeting this weekend to see whether or not they decide to extend their voluntary production cuts through to next year. A worrying sign for CAD bulls is the most recent CFTC positioning that shows shorts increasing to its highest level since 2017. This may be due to the fact that the BoC were the first to begin their hiking cycle against the Fed (refer to graphic below) at a swifter pace therefore, markets could be expectant of a similar trajectory towards the downside. BOC VS FED INTEREST RATE CYCLE Source: Refinitiv TECHNICAL ANALYSIS USD/CAD DAILY CHART Chart prepared by Warren Venketas, IG Daily USD/CAD price action shows the pair testing the long-term channel support zone. A weekly close below this region may prompt additional CAD strength. Fundamental data is critical at this juncture and will likely be cemented by the weekend’s decision by OPEC+. The Relative Strength Index (RSI) suggests indecision in the market and rightly so, meaning traders should exercise caution in the period. Key resistance levels: 1.3899 1.3800 Channel support Key support levels: 1.3700 1.3668/50-day MA (yellow) 1.3600 IG CLIENT SENTIMENT DATA: BEARISH IGCS shows retail traders are currently net SHORT on USD/CAD, with 59% of traders currently holding short positions (as of this writing). https://www.dailyfx.com/news/forex-cad-price-forecast-loonie-faces-key-support-ahead-of-us-data-opec-wv-20231122.html

2023-11-21 21:30

USD/CAD PRICE, CHARTS AND ANALYSIS: USDCAD Remains in a 200-pip Range Following Canadian Inflation as the Ascending Trendline Lies in Wait. A Recovery in Oil Prices or a Stronger Dollar Could Facilitate a Range Break. To Learn More About Price Action,Chart Patterns and Moving Averages, Check out the DailyFX Education Series. Read More: The Bank of Canada: A Trader’s Guide USDCAD has been stuck in a range since the beginning of November with the recent drop in Oil Prices coinciding with US Dollar weakness keeping the pair rangebound. Many had hope Canadian inflation may bring the recent malaise in USDCAD to an end but that has unfortunately not materialized. CANADIAN CPI, US FED MINUTES The Bank of Canada received a welcome boost today as Canadian inflation followed its US counterpart in declining more than expected. This is key for the Bank of Canada as since the June low of 2.8% inflation had been edging higher with the August print rising to a high of 4%. This isn’t a surprise given that inflation very seldomly returns to Central Banks targeted rate without hiccups, particularly in the current risk environment. The annual inflation rate in Canada fell to 3.1% in October of 2023 from 3.8% in the previous month, slightly below market expectations of 3.2%. The result was softer than the Bank of Canada’s forecast that inflation is likely to remain close to 3.5% through the middle of next year, strengthening market bets that the central bank is unlikely to deliver another rate hike. Canadian consumers are already feeling the pinch of the current rate environment and another hike may have thrown a cat amongst the pigeons. Gas prices once again playing a major role in the drop off while a drop in food price inflation will also be welcomed. From a consumer point of view however, Food price inflation remains uncomfortably high at the current 5.6% while rising bond yields keep mortgage costs high as well. Not the greatest outlook for the Canadian economy and something which could continue to weigh on the loonie moving forward. Source: Statistics Canada The US Federal Reserve Minutes had little to no impact on markets earlier as the data since suggests the Fed are making big strides as they look to get inflation back to target. For a full breakdown of the FOMC minutes, click here. RISK EVENTS AHEAD Following today’s high impact data there is not a lot left on the Calendar this week. There is some high impact data from the US tomorrow with Durable Goods Orders and the Michigan consumer sentiment final print due as well. Neither of these are expected to have any longer-term impact on the USD and thus USDCAD but rather developments around the Oil price and sentiment around the US Dollar are likely to remain key. TECHNICAL ANALYSIS USDCAD USDCAD failed in its attempts to pierce through the 1.3700 resistance area. Since then, we have seen mixed price action with a lower high followed up by a higher low which is typical during periods of indecision and rangebound trade. The long-term ascending trendline may come into play if we do push slightly lower and could provide support. There is also the 50-day MA which rests just above the ascending trendline at the recent swing low at 1.3660. A break of the ascending trendline could bring the support area around 1.3550 into play before the 100 and 200-day MA comes into focus. Alternatively, If the US Dollar stages a recovery the 1.3800 level will provide a stern test for bulls before any attempt at the recent highs around the 1.3900 handle. Key Levels to Keep an Eye On: Support levels: 1.3660-1.3650 1.3600 1.3500 Resistance levels: 1.3800 1.3900 1.4000 USD/CAD Daily Chart Source: TradingView, prepared by Zain Vawda IG CLIENT SENTIMENT IG Client Sentiment data tells us that 60% of Traders are currently holding SHORT positions. Given the contrarian view to client sentiment at DailyFX, is USDCAD destined to fall back toward the psychological 1.3500 mark? For Tips and Tricks on How to use Client Sentiment Data, Get Your Free Guide Below https://www.dailyfx.com/news/usd-cad-remains-rangebound-as-canadian-cpi-falls-more-than-expected-where-to-next-20231121.html

2023-11-21 19:26

US DOLLAR, EUR/USD KEY POINTS POST FOMC MINUTES: FOMC Minutes Turns into Non-Event Following Recent Inflation Print and No Surprises. DXY Eyes Recovery Following Bounce off Key Support Area. More Upside Ahead? EURUSD Flirts with 1.0900 as Long-Awaited Retracement May be Upon Us. To Learn More AboutPrice Action,Chart PatternsandMoving Averages, Check out theDailyFX Education Section. MOST READ: Crypto Forecast: Will Bitcoin Have What it Takes to Break the $38k Mark? The US Federal Reserve released the minutes of the November FOMC meeting a short while ago with no real surprises and a rather subdued market reaction. This shouldn’t come as a surprise given the data and the reaction market participants since then with the recent US Inflation print in particular facilitating a broad sell off in the US Dollar. Although the outlook might have changed for Fed members since the meeting some the key takeaways include that the September staff projections remained unchanged. The Fed once again reiterating their desire on data-based decision making while participants noted that further policy tightening would be appropriate if information showed progress to inflation goal was insufficient. As mentioned earlier, the recent CPI print would no doubt have buoyed members but there is still work to do as Fed policymakers have been quick to point out of late. Fed policymakers do remain unhappy about the limited progress in bringing down core services ex housing inflation while confirming the need to see a more sustained push lower on the inflation front to breathe easier. According to the FedWatch tool, Fed rate expectations little changed after the Fed minutes, first rate cut seen likely in May 2024, fully priced in for June 2024. Tomorrow is the last day of high impact data from the US for the week with Durable Goods Orders and Michigan Sentiment Final print due. Neither of these are expected to be particularly exciting and could end up having a minimal or short-term impact on the US Dollar. US ECONOMY The US Economy has shown positive signs of late for the Fed in particular as inflation and the labor market show signs of cooling. This should not come as a surprise given the current interest rate environment and factors such as the resumption of student loan repayments at the end of September. This has no doubt affected the consumers pocket and thus have a knock-on effect on demand. This would in tun affect retail sales and thus push prices lower if this momentum continues. The holiday season and Black Friday lies ahead and could throw a spanner in the works should consumers splurge once more. A difficult task given the current environment but as pointed out by the New York Fed yesterday, the application rate for credit cards continues to remain robust in 2023. This is why the December batch of data may prove to be a tricky one and not represent the overall economic environment. One thing that looks a certainty right now, and that is that any rate hikes at the Fed’s December meeting and early 2024 looks unlikely. MARKET REACTION Following the data release the dollar index remained relatively unchanged which shouldn’t come as a surprise. The DXY does face some resistance at the time of writing as it has tapped the 200-day MA which could provide some resistance tomorrow as well. Dollar Index (DXY) Daily Chart- November 21, 2023 Source: TradingView, prepared by Zain Vawda EURUSD has already begun its selloff thanks to the DXY recovery today. This has seen EURUSD push below the 1.0900 level with market participants keeping a close eye on whether the move will be sustainable. Immediate resistance around the 1.0950 area and todays daily high with a break higher leading EURUSD toward the psychological 1.1000 handle. EURUSD Daily Chart- November 21, 2023 Source: TradingView, prepared by Zain Vawda https://www.dailyfx.com/news/us-dollar-index-dxy-continues-recovery-as-fomc-minutes-have-minimal-impact-20231121.html

2023-11-21 16:41

Japanese Yen Analysis Japanese Yen backs away from supposed intervention trigger after renewed strength USD/JPY breaks beneath a dynamic level of prior support Japanese yen is most heavily shorted since at least 2020, posing risk of a short squeeze The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Japanese Yen Backs Away from Supposed Intervention Trigger on Renewed Strength The yen has struggled to maintain any sustainable period of strength even after the BoJ removed prior barriers to rising bond yields, which typically results in currency appreciation. Adding to the prior lack of impetus, the BoJ Governor Ueda failed to detail when the BoJ may pivot from its ultra-loose policy but has spoken at length about the prospect of withdrawing from negative interest rates should incoming inflation and wage growth data provide a compelling case for it. It appears the weak dollar is helping mark lower USD/JPY levels but the yen is seen picking up strength across a number of major currency pairs. The net effect is softer USD/JPY as the pair has traded below the 50-day simple moving average (SMA) - which had acted as dynamic support until now. With lower energy prices and a firmer yen, talk about FX intervention is likely to subside. USD/JPY finds support at 146.50, followed by 145.00 . The 50 SMA now forms a potential dynamic resistance if we are to see a pullback, but the bearish move has not breached oversold conditions on the RSI yet so there may still be more room to run before overheating. USD/JPY Daily Chart Source: TradingView, prepared by Richard Snow The Japanese Yen Index below is an equal weighted measure of USD/JPY, AUD/JPY, GBP/JPY and EUR/JPY. The index has shown a broad lift in the value of the yen since bottoming out and still has a long way to go to recover lost ground. Japanese Yen Index Source: TradingView, prepared by Richard Snow CoT Report Reveals the Yen is Heavily Shorted, Laying the Foundation for a Potential Short Squeeze The most recent Commitment of Traders (CoT) report from the CFTC reveals that the yen is the most shorted it has been since at least late 2020 (elongated histogram circled in green). Further yen strength may force prior shorts to buy to cover which only adds to the bullish yen momentum. Japanese Yen Longs and Shorts according to recent Commitment of Traders report Source: Refinitiv, prepared by Richard Snow Major event risk includes tonight’s FOMC minutes and Thursday’s Japanese inflation data. A hotter print is likely to boost the yen even further if price pressures trend higher. https://www.dailyfx.com/news/usd-jpy-latest-yen-strengthens-ahead-of-japanese-cpi-report-20231121.html