2024-05-13 13:00

Pound Sterling (GBP/USD) Talking Points GBP/USD holds above $1.25 However, its 200-day moving average still caps the market It will be interesting to see if it still does at the end of this week Get your hands on the British pound Q2 outlook today for exclusive insights into key market catalysts that should be on every trader's radar: The British Pound made gains against the United States Dollar on Monday, but the currency remains within an established trading band before the week’s major scheduled trading events, most of which will come from the US. The Bank of England’s May monetary policy meeting has come and gone. Interest rates weren’t altered, but markets were left with the impression that a reduction in June remains on the table even if an August move is more likely. The prospect of the BoE moving before the Federal Reserve ought perhaps to have weakened Sterling more than it has. After all, futures markets don’t see US borrowing costs coming down before September. Moreover, judged by recent, hawkish commentary from the Fed’s rate setters, even that might be optimistic. Governor Michelle Bowman said last Friday that she doesn’t think it will be appropriate for the Fed to cut interest rates at all this year. Of course she doesn’t speak for all, but it seems certain that the rate-cut faction will have a debate on its hands to get its way. So why is the Pound still relatively buoyant? Well, for one thing expectations for both central banks remain heavily dependent on data we haven’t seen yet, and inflation remains above target on both sides of the Atlantic. Expectations can change quickly and traders know it. For another, the UK economy has done better than many thought it might at the start of this year, with the most recent growth data beating expectations and pointing to a much shallower and shorter recession earlier this year than the norm, With London’s blue-chip stock index at record highs, the country is benefitting from a revival in market risk appetite. This week’s main UK trading cue will probably come on Tuesday with the release of official labor-market statistics for March. Markets will pay particular attention to earnings growth, with the Pound likely to catch a bid if that rises above the 5.3% rate expected. However, Fed Chair Jerome Powell is scheduled to speak on Tuesday too, ahead of the next batch of UK inflation numbers. GBP/USD is unlikely to move far before the market has seen those. GBPUSD Technical Analysis The Pound remains within the clear, sideways range which has taken it out of the previously dominant downward channel. Sterling bulls retain the upper hand, it seems, but they’re probably going to have to force the pace above GBP/USD’s 200-day Moving Average soon or some doubts will probably set in. The MA hovers just above the market at £1.2504 and, while that should be well within range, the market struggles to close above it. GBP/USD Daily Chart Compiled Using TradingView Support at the first retracement of the rise up to mid-July’s highs from the lows of September 2022 still looks important. It comes in at 1.24874. Retail trade data show market participants quite evenly split on GBP/USD’s prospects from here, with the bulls clinging to a small majority. --By David Cottle for DailyFX https://www.dailyfx.com/news/british-pound-sticks-to-range-before-uk-labor-stats-powell-and-us-inflation-20240513.html

2024-05-13 11:30

Major Indices Technical Updates: FTSE 100 continues bullish run, spurred on by trendline support DAX trades just shy of the all-time high S&P 500 within 1% of a retest of the all-time high Elevate your trading skills and gain a competitive edge. Get your hands on the Equities Q2 outlook today for exclusive insights into key market catalysts that should be on every trader's radar: FTSE 100 Continues to Accumulate Record Highs The FTSE 100 made a new record high each day over the past seven trading days as the UK exited its 2023 technical recession with the psychological 8,500 mark representing the next upside target. This will be the case while the April-to-May uptrend line at 8,404 underpins on a daily chart closing basis. This uptrend line is likely to be tested on Monday, though. FTSE Daily Chart Source: ProRealTime, prepared by Axel Rudolph DAX 40 Trades in Record Highs The DAX 40 has so far risen on seven consecutive days and in doing so last week made a new record high whilst approaching the minor psychological 19,000 mark. Minor support below Friday’s 18,712 low can be spotted at the previous record high, made in April at 18,636. DAX Daily Chart Source: ProRealTime, prepared by Axel Rudolph S&P 500 Trades Less Than 1% Away from its April Record High The S&P 500’s 4% rally from its early May low has taken it marginally above its 10 April high at 5,234 on Friday, to 5,239 to be precise. Above it lies the April record high at 5,274. Potential slips may encounter support at the 5,200 mark, hit on Tuesday, and at Wednesday’s 5,164 low. S&P 500 Daily Chart Source: ProRealTime, prepared by Axel Rudolph https://www.dailyfx.com/news/ftse-100-dax-40-trade-in-record-highs-with-s-p-500-less-than-1-away-from-april-record-peak-20240513.html

2024-05-13 08:10

Aussie Dollar (AUD/USD) Analysis Risk sentiment props up AUD with US CPI data on the horizon US CPI expected to redirect attention to the disinflation narrative after consecutive months of stubborn price pressures AUD/USD reveals key resistance levels in the event CPI heads lower Get your hands on the Aussie dollar Q2 outlook today for exclusive insights into key market catalysts that should be on every trader's radar: Risk Sentiment Props up AUD with US CPI Data on the Horizon In the early stages of 2024, the typical positive relationship between the S&P 500 and the Aussie dollar began to break down. Stocks continued higher while strong US inflation and robust growth buoyed the US dollar, weighing on AUD which and sending AUD/USD sideways, or at times, lower. However, the typical positive relationship appears to be getting back on track as both paths appear to be moving in lockstep – something that the correlation coefficient index reveals at the bottom of the chart (using a 20 day rolling correlation). A correlation coefficient of 1 means two markets are perfectly in lockstep and the current reading of 0.87 reveals a solid recovery of late. Therefore, as the S&P 500 is on track to test its all-time high, AUD may benefit from the continued 'risk on' move. The one potential hurdle this week is US CPI, which is expected to show a return to the disinflation narrative but markets will be focused on a much more nuanced measure of inflation, month-on-month (MoM) core CPI. Month-on-month core CPI has trended around the 0.4% mark- twice that which is believed to bring inflation back down to the 2% target. Early estimates have the figure at 0.3% but markets may look even closer as this figure tends to be rounded up or down. For example, a 2.6% reading may receive a bearish repricing in USD with 0.34% being met with a more bullish response despite the fact that both figures will show as 0.3%. AUD/USD Compared to S&P 500 (Correlation Recovering) Source: TradingView, prepared by Richard Snow AUD/USD Reveals Key Resistance Levels in the Event CPI Heads Lower AUD/USD has risen above the 200-day simple moving average (SMA) with ease and appears to be holding above the April 2020 high of 0.6580 where price action has consolidated in recent days. The main challenge for AUD/USD bulls from here is breaching the zone of resistance that has appeared around recent swing highs at 0.6645. Even if that is achieved, the 0.6680 level is not too far away – another level that has capped AUD/USD upside. However, the recent consolidation forms what looks like a bull pennant – a typical bullish pattern. With a bit of help from the US inflation report (lower than expected CPI), AUD/USD may find the catalyst to really test and possibly break through these levels of resistance. Support remains at 0.6580. AUD/USD Daily Chart Source: TradingView, prepared by Richard Snow Interest rates in Australia are expected to remain on hold for the year due to stubborn inflation concerns. This may help buoy the currency in the absence of a negative shift in global risk sentiment. Implied Interest Rate Hikes via Interest Rate Markets Source: Refinitiv, prepared by Richard Snow https://www.dailyfx.com/news/aud-usd-forecast-key-resistance-levels-to-watch-as-us-cpi-looms-20240513.html

2024-05-12 17:00

US Dollar meanders ahead of vital US inflation print Gold (XAU/USD) attempts bullish continuation as the IDF pushes into Rafah Sterling to be driven by labour market data and Fed speak, with the Euro eying sentiment data as well as US-linked data and speeches 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 Inflation Data and Fed Comments Ought to Provide Direction for USD The US dollar traded in an indecisive manner last week, reacting to incoming data – most notably initial jobless claims on Thursday. US CPI data on Wednesday is likely to provide a directional catalyst unless figures print in line with the general consensus. The chart below highlights the influence inflation data can have on interest rate expectations and ultimately the dollar, after the March CPI data worryingly exceeded expectations. The month on month core CPI data has been stubbornly hot at 0.4% for the last three readings and markets will be eager to see if this focus point can head to a preferable measure of 0.2% or lower. The US has also experienced a softening in the labour market, first with a lower-than-expected NFP data and secondly, through higher-than-anticipated initial jobless claims. The weaker data places a temporary ceiling on USD upside, something that a hot CPI print is more than capable of rising above. However, if the market gives in to ‘recency bias’, lower CPI data may compound on the recent weaker jobs data, sending the dollar lower. US Dollar Basket (DXY) Daily Chart Source: TradingView, prepared by Richard Snow Prominent Fed members, including Jerome Powell, will provide their thoughts on Fed policy in the coming week. The effect on markets may be limited due to the fact there has not been an awful lot of data to sway opinions since the 1st of May Fed meeting. Relevant Reading: Decoding Fedspeak: How Central Banker Comments Move Markets – Gold & US Dollar For a complete overview of the U.S. dollar’s technical and fundamental outlook, request your complimentary Q2 trading forecast now! Gold (XAU/USD) Attempts Bullish Continuation as the IDF Pushes into Rafah Gold benefitted from a late push higher on Thursday and Friday to end the week higher. Gold had previously traded with a downward trajectory, pulling back from the all-time high. Trendline resistance proved too much to handle and the precious metal eased lower before the end of trade on Friday. Gold is also likely to respond to the latest US inflation data as it tends to impact US Treasury yields, interest rate expectations and the greenback. Gold bulls will be hoping for softer CPI data to propel the metal higher and potentially test the all-time high. Gold (XAU/USD) Daily Chart Source: TradingView, prepared by Richard Snow Technical and Fundamental Forecasts – w/c May 13th US Dollar’s Path Tied to Inflation Outlook; Setups on EUR/USD, USD/JPY, GBP/USD After poor performance earlier in the month, the U.S. dollar rebounded this week, supported by a moderate rise in bond yields. We could see a continuation of the greenback's upward movement if the upcoming US inflation report tops consensus estimates. Gold Breaks Higher, Silver Rallies and Continues its Multi-Month Outperformance After a period of consolidation, both gold and silver broke higher Thursday after weekly US jobless claims showed the labor market weakening. British Pound Weekly Forecast: Caught Between Stronger Growth, Dovish BoE News that recession was short and shallow will have pleased the bulls, but the Bank of England looks ready to cut rates next month if the data let it. Euro Weekly Forecast: Euro Holds up but US Data May Change the Outlook The euro has avoided a sell-off, mainly due to the weakness of its peers. Next week the single currency will be tested after the highly anticipated US CPI data is released. https://www.dailyfx.com/news/markets-week-ahead-gold-us-dollar-euro-and-sterling-ahead-of-us-cpi-20240512.html

2024-05-12 06:00

Most Read: US Dollar Gains Ahead of US CPI Data; Setups on EUR/USD, USD/JPY, GBP/USD After a subdued performance earlier this month, the U.S. dollar (DXY index) advanced this past week, climbing roughly 0.23% to 105.31. This resurgence was buoyed by a slight uptick in U.S. Treasury yields and a prevailing sense of caution among traders as they await the release of April's U.S. consumer price index (CPI) figures, scheduled for this Wednesday. The greenback could build upon its recent rebound if the pattern of consistently hotter-than-expected and sticky inflation readings observed this year repeats itself in next week's fresh cost of living data from the Bureau of Labor Statistics. Consensus forecasts indicate that both headline and core CPI registered a 0.3% uptick on a seasonally adjusted basis last month, resulting in the annual readings shifting from 3.5% to 3.4% for the former and from 3.8% to 3.7% for the latter—a modest yet encouraging step in the right direction. For a complete overview of the U.S. dollar’s technical and fundamental outlook, request your complimentary Q2 trading forecast now! US dollar shorts, aiming to thwart the currency's comeback, need to see an in-line or preferably softer-than-anticipated CPI report to launch the next bearish assault. Weak CPI figures could rekindle hopes of disinflation, bolstering bets that the Fed’s first rate cut of the cycle would come in September, which traders currently give a 48.6% chance of occurring. FOMC MEETING PROBABILITIES Source: CME Group In the event of another upside surprise in the data, we could see yields rise across the board on the assumption that the Fed could delay the start of its easing campaign until much later in the year or 2025. Higher interest rates for longer in the U.S., just as other central banks prepare to start cutting them, should be a tailwind for the U.S. dollar in the near term. Want to stay ahead of the EUR/USD’s next major move? Access our quarterly forecast for comprehensive insights. Request your complimentary guide now to stay informed on market trends! EUR/USD FORECAST - TECHNICAL ANALYSIS EUR/USD rose modestly this past week, but so far has been unable to break above its 50-day and 200-day simple moving averages at 1.0790, a solid technical barrier. Bears will have to continue to defend this ceiling firmly; failure to do so could result in a rally toward trendline resistance at 1.0810. On further strength, the spotlight will turn to 1.0865, the 50% Fibonacci retracement of the 2023 decline. In the scenario of price rejection from current levels and subsequent downward shift, support areas can be identified at 1.0725, followed by 1.0695. On a pullback, the pair could find stability around this floor before initiating a turnaround, but should a breakdown occur, we could see a rapid drop towards 1.0645, with the possibility of a bearish continuation towards 1.0600 if selling momentum intensifies. EUR/USD PRICE ACTION CHART EUR/USD Chart Created Using TradingView Pondering the role of retail positioning in shaping USD/JPY’s near-term path? Our sentiment guide offers indispensable insights. Don't wait—claim your guide today! USD/JPY FORECAST - TECHNICAL ANALYSIS USD/JPY regained strength and climbed past 155.50 this past week. If we see a follow-through to the upside in the days ahead, resistance awaits at 158.00 and 160.00 thereafter. Any rally towards these levels should be viewed with caution, given the risk of FX intervention by Japanese authorities to support the yen, which has the potential to trigger a sharp and abrupt downward reversal if repeated again. On the flip side, if sellers mount a comeback and prices begin to head south, initial support materializes at 154.65, followed by 153.15. Further losses below this threshold could boost selling interest, paving the way for a move towards trendline support and the 50-day simple moving average positioned slightly above the 152.00 handle. USD/JPY PRICE ACTION CHART USD/JPY Chart Created Using TradingView GBP/USD FORECAST - TECHNICAL ANALYSIS GBP/USD declined slightly this past week, but managed to hold above support at 1.2500. To thwart a drop of greater magnitude, bulls must resolutely protect this technical floor; any lapse in defense could quickly precipitate a plunge towards 1.2430. Additional downside progression from this point onward could lead to a retreat towards the April lows at 1.2300. Conversely, if buyers step in and drive prices above the 200-day SMA, confluence resistance extends from 1.2600 and 1.2630 – an area that marks the convergence of the 50-day simple moving average with two prominent trendlines. Surmounting this barrier might pose a challenge for bulls, but a breakout could usher in a move towards 1.2720, the 61.8% Fib retracement of the July/October 2023 downturn. GBP/USD PRICE ACTION CHART GBP/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-s-path-tied-to-inflation-outlook-setups-on-eur-usd-usd-jpy-gbp-usd-20240512.html

2024-05-10 15:45

Most Read: EUR/USD, USD/JPY, GBP/USD – Technical Analysis and Price Outlook The U.S. dollar asserted its strength on Friday, riding on higher U.S. Treasury yields in anticipation of next week's highly awaited U.S. consumer price index data. Investors are closely watching the CPI figures, as they could guide the Fed’s next step in terms of monetary policy. That said, a hot CPI report could spark a hawkish repricing of interest rate expectations, further boosting the greenback. Conversely, softer-than-anticipated numbers could dampen the dollar's strength by rekindling hopes for early rate cuts. Putting fundamentals aside now, the next section of this article will focus on analyzing the technical outlook for three U.S. dollar pairs: EUR/USD, USD/JPY and GBP/USD. Here we will take an in-depth look at important price thresholds that can serve as support or resistance in the coming days. These levels can not only provide valuable information for risk management, but also play a crucial role in strategic decision making when establishing positions in the currency market. Want to know where EUR/USD is headed over the coming months? Explore all the insights available in our second-quarter forecast. Request your complimentary guide today! EUR/USD FORECAST - TECHNICAL ANALYSIS EUR/USD declined on Friday following an unsuccessful attempt to surpass its 50-day and 200-day simple moving averages at 1.0790, a robust technical barrier, causing the exchange rate to dip towards 1.0750. If the pullback gathers traction in the coming days, support awaits at 1.0725, followed by 1.0695. Further downside movement could lead to a retreat towards 1.0645. In the scenario of a bullish reversal, the first hurdle on the upward journey emerges at 1.0790. Breaching this ceiling might pose a challenge, yet upon a successful breakout, the pair could potentially rally towards trendline resistance at 1.0810. Upside progress beyond this region could open the door to move towards a key Fibonacci level at 1.0865. EUR/USD PRICE ACTION CHART EUR/USD Chart Created Using TradingView Wondering about the yen's prospects – will it continue to weaken or mount a bullish comeback? Discover all the details in our Q2 forecast. Don't miss out – request your free guide today! USD/JPY FORECAST - TECHNICAL ANALYSIS USD/JPY rose on Friday, tentatively approaching the 156.00 mark. If gains continue in the coming trading sessions, resistance looms at 158.00, followed by 160.00. Traders need to approach any upward movement towards these levels cautiously, refraining from blinding riding with momentum, given the risk of Tokyo intervening in the FX space to prop up the yen, which could quickly send the pair tumbling. Conversely, if sellers return and prices start heading lower, the first support to monitor materializes at 154.65, followed by 153.15. Additional losses below this point may boost bearish impetus, creating the perfect environment for a drop towards trendline support and the 50-day simple moving located slightly above the 152.00 handle. USD/JPY PRICE ACTION CHART USD/JPY Chart Created Using TradingView Interested in learning how retail positioning can offer clues about GBP/USD’s directional bias? Our sentiment guide contains valuable insights into market psychology as a trend indicator. Request a free copy now! GBP/USD FORECAST - TECHNICAL ANALYSIS GBP/USD dipped slightly on Friday but held firm above the 1.2500 mark. Bulls must vigorously defend this technical floor; any failure to do so might precipitate a decline toward 1.2430. Although prices could stabilize around this region before a potential rebound, a breakdown could pave the way for a descent toward April's low at 1.2300. On the other hand, if buyers mount a comeback and propel prices above the 200-day SMA, confluence resistance spans from 1.2600 to 1.2630, an area that marks the convergence of the 50-day simple moving average with two significant trendlines. Taking out this barrier could inject optimism into the market, fueling further gains for the pound and potentially leading to a move towards 1.2720. GBP/USD PRICE ACTION CHART GBP/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-gains-ahead-of-us-cpi-data-setups-on-eur-usd-usd-jpy-gbp-usd-20240510.html