2024-03-18 12:30

Euro (EUR/USD) Price and Analysis EUR/USD holds above 1.08 in a week packed with central bank policy decisions. The near-term uptrend is under pressure, but the longer-term one looks safe enough. June could now be the month in which both the Fed and ECB loosen credit Learn How to Trade EUR/USD with our Complimentary Trading Guide The Euro edged higher against the United States Dollar as a new trading week began in Europe on Monday, with moves likely to remain extremely limited at least until Wednesday’s monetary policy decision from the Federal Reserve. This is always a showstopper of course, and this month’s call promises plenty of interest even though it’s all but impossible that interest rates will be going anywhere. This is quite some change from the start of this year. March was thought of as very possibly the month in which Chair Jerome Powell and his colleagues would fire the starting gun on an easing cycle by cutting rates at last. However, US inflation has proven sticky and the economy overall more resilient. Now, while markets continue to price in lower borrowing costs this year, investors will be keen to see if the Fed’s economic projections trim the number of likely reductions from three to two. If they do, the Dollar can expect more support across the board, including against the Euro. Of course, the Euro is not without a monetary boost of its own at present, with Eurozone rates at record highs and the European Central Bank by its admission ‘in no hurry’ to reduce them. ECB Policymaker Pablo Hernandez de Cos said in an interview published on Sunday that the bank could be in a position to cut rates in June, which is when the Fed is also thought most likely to start the process. EUR/USD is holding above the 1.08 mark as the market looks toward Wednesday’s main event. It might be vulnerable, at least in the short term, if the Fed leaves markets with the impression that fewer, more gradual cuts are coming. EUR/USD Technical Analysis EUR/USD Chart Compiled Using TradingView While the Euro remains within a quite well-respected uptrend channel from the lows of mid-February, the channel base is now coming under renewed pressure. It now offers support very close at hand, at 1.08870, but approaches to it aren’t yet bringing out the sellers in force, and Euro bulls seem able to defend it in what may admittedly be a thin market, ahead of the Fed. They’ll need to get the single currency back above 1.09519 if they’re going to make back the sharp falls seen on March 14 and get the pair back up to its recent highs. Despite some near-term volatility, the Euro remains well within an overall uptrend from last October. Indeed, that won’t be threatened until the 1.074 region, well below the current market. IG’s own sentiment data finds traders pretty evenly split on the likely near-term fortunes of EUR/USD, with 53% bullish against 47% coming to it from the bearish side. --By David Cottle for DailyFX https://www.dailyfx.com/news/euro-higher-despite-market-worries-of-more-gradualist-fed-20240318.html

2024-03-18 08:46

Japanese Yen Prices, Charts, and Analysis Current market pricing shows a 44% chance of a 10 basis point rate hike tomorrow. Recent wage negotiations may well give the BoJ confidence to move. Tuesday’s BoJ policy meeting may see the Japanese Bank Rate lifted out of negative territory for the first time in over eight years after Japan’s largest trade union agreed to the largest wage increase in over three decades. The central bank has been pushing for higher wages to help domestic inflation stay at target and help boost the economy. Japanese Wages Rise to 30-Year High Fuelling BoJ Rate Speculation Financial markets are currently showing a 44% probability of a 10bp interest rate hike tomorrow and a 62% chance at the April meeting. The Quarterly Economic Outlook is released in April and the Bank of Japan may wait for this before pulling the trigger and raising interest rates for the first time in 17 years. Markets also predict that the BoJ will end their yield curve control, allowing bond rates to rise. The US dollar is currently driving USD/JPY price action. The greenback picked up a bid over the past few days as stronger-than-expected CPI and PPI data questioned market expectations of a rate cut at the June FOMC. The Fed will announce their latest policy decision on Wednesday and it will be Chair Jerome Powell’s post-decision commentary that will be the next driver of the US dollar direction. This US dollar strength has pushed USD/JPY back above 149.00 ahead of the BoJ’s decision. There is a solid block of recent resistance between 150 and 151 on the chart that is very unlikely to be broken, while the 50- and 200-day smas and the recent double-low at 146.50 guard a move lower to 145. USD/JPY Daily Price Chart Retail trader data shows 24.11% of traders are net-long with the ratio of traders short to long at 3.15 to 1.The number of traders net-long is 14.58% higher than yesterday and 13.50% lower from last week, while the number of traders net-short is 4.95% higher than yesterday and 15.39% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/JPY prices may continue to rise. What is your view on the Japanese Yen – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/japanese-yen-usd-jpy-rally-continues-boj-policy-decision-imminent-20240318.html

2024-03-17 18:00

Markets Week Ahead: Nasdaq Slips, Gold Steadies, Central Banks on Tap The economic data and central bank calendars are packed full next week with a range of potentially market-moving releases. Five central banks will announce their latest monetary policy decisions, with the Bank of Japan the most interesting. Markets currently see a 40% chance that the BoJ will hike rates by 10 basis points as the latest Japanese wage negotiations show large hikes to workers’ pay across various industries. Japanese Wages Rise to a 30-Year High, Fuelling BoJ Rate Speculation Along with the central bank announcements, there are important data releases throughout the week with UK inflation, German Manufacturing PMIs, and Euro Area sentiment PMIs the standouts. The US dollar rallied Thursday after the latest US PPI data showed wholesale price inflation increasing. As it stands, it is unlikely that this release will overly worry the Federal Reserve but it serves as a reminder that price pressures remain sticky in the US. US Dollar Soars on Inflation Risks as Fed Looms; EUR/USD, GBP/USD, USD/JPY Markets Overview – Gold, Nasdaq, Nvidia, MicroStrategy Gold has been under pressure this week due to the US dollars rebound, although the precious metal remains near a multi-decade high. Technical analysts will be closely watching a Bullish Pennant formation that is nearly complete. The next few days will see if this pattern plays out. Gold Daily Price Chart Learn how to trade gold with our complimentary guide: The Nasdaq ended the week lower and is starting to fall out of a multi-month ascending trend. The tech bellwether is also showing signs of topping out and unless Fed Chair Powell turns dovish at the FOMC meeting on Wednesday, the Nasdaq may continue to struggle. Nasdaq 100 Daily Price Chart One of the largest companies in the Nasdaq, Nvidia, is also struggling. The chip giant balked at just under the $1,000 level on March 8th and despite a couple of short-term rallies, Nvidia ended lower on the week. Nvidia (NVDA) Daily Price Chart MicroStrategy has been rallying hard in recent weeks, on the back of heavy ETF demand for Bitcoin. MicroStrategy holds in excess of 200,000 Bitcoin on its books and continues to buy BTC on a regular basis. MSTR posted a fresh high again on Friday, despite Bitcoin selling off with talk that a short-squeeze may be happening after traders piled in on the short MSTR/long BTC arbitrage. These positions are underwater and traders’ losses are mounting up. MicroStrategy (MSTR) Daily Price Chart All Charts using TradingView Technical and Fundamental Forecasts – w/c March 18th British Pound Weekly Forecast: GBP/USD Could Struggle as Rate Setters Convene This week will bring policy decisions from central banks on both sides of GBP/USD. Euro (EUR/USD) Forecast – Fed and BoE Will Drive EUR/USD and EUR/GBP Price Setups Euro traders will be looking at the Federal Reserve and the Bank of England this week to help gauge EUR/USD and EUR/GBP future price levels. Gold Price Forecast: Fed in Spotlight – Bullish Explosion or Crash Ahead? The Federal Reserve's decision and monetary policy guidance in the coming week will be the focus of financial markets. A hawkish outcome could be positive for the U.S. dollar and yields, but bearish for gold prices. US Dollar Forecast: FOMC in View – Setups on EUR/USD, GBP/USD, USD/JPY The FOMC will deliver updates on monetary policy and reveal the latest ‘dot plot’ which will confirm whether Fed officials maintain their prior stance of three cuts in 2024 https://www.dailyfx.com/news/markets-week-ahead-nasdaq-slips-gold-steadies-central-banks-on-tap-20240317.html

2024-03-16 18:00

GOLD PRICE OUTLOOK Gold prices retreated this week but are still up more than 5% in March The Fed’s monetary policy announcement will take center stage in the coming week This article examines XAU/USD’s technical outlook and key price levels Most Read: EUR/USD Levels Off at Support Ahead of Key Fed Decision – Outlook & Analysis Gold prices (XAU/USD) retreated this week, falling about 1.05% to $2,155, dragged lower by the rebound in U.S. Treasury yields and the U.S. dollar. Despite this setback, the precious metal maintains strong bullish momentum, reflected by its March performance to date, which has produced a gain of around 5.5% and led to recent all-time highs. GOLD, US DOLLAR & US YIELDS PERFOMANCE Source: TradingView Earlier this month, bullion climbed sharply on bets that the Federal Reserve would soon start cutting interest rates. The rally accelerated after Fed Chair Jerome Powell indicated in an appearance before Congress that policymakers were "not far" from gaining greater confidence in the inflation outlook to pivot to a less restrictive stance. Markets got overexcited by Powell’s comments, providing bullish investors with a reason to drive XAU/USD upwards. However, the picture has begun to change over the past few sessions, with a new storyline unfolding in the wake of disappointing consumer price data, revealing a stark reality: progress on disinflation is stalling and possibly even reversing. Eager to gain insights into gold's future path? Discover the answers in our complimentary quarterly trading guide. Request a copy now! With upside inflation risks starting to materialize, as seen in the last two CPI and PPI reports, traders should not be surprised if the central bank starts to adopt a more hawkish posture, signaling that more patience is needed before removing policy restraint and that fewer rate cuts than initially anticipated will likely occur once the process gets underway. We will know more about the Federal Reserve's plans next week (Wednesday) when the institution announces its March decision. While policymakers are seen keeping their policy settings unchanged, they could provide different guidance and forecasts in response to new information on the macroeconomic front; after all, data-dependency has been the guiding principle. In the latest Summary of Economic Projections, the Fed hinted that it would deliver 75 basis points of easing this year and market pricing has converged to this estimate of late. If policymakers were to indicate an intention to deliver fewer cuts than what’s currently discounted, we could see bond yields and the U.S. dollar push higher. This should be bearish for gold prices. Wondering how retail positioning can shape gold prices? Our sentiment guide provides the answers you are looking for—don't miss out, get the guide now! GOLD FORECAST - TECHNICAL ANALYSIS Gold prices fell this week, but managed to hold above support at $2,150. Bulls must actively protect this technical zone to prevent an escalation of selling pressure; failure to do so may trigger a pullback towards $2,085. In case of further weakness, the spotlight will be on $2,065. On the flip side, if buyers regain decisive control of the market and spark a bullish reversal from the metal’s current position, the first obstacle lies at the record peak established earlier this month at $2,195. Further upward movement will draw attention to trendline resistance near $2,205. GOLD PRICE TECHNICAL CHART Gold Price Chart Created Using TradingView https://www.dailyfx.com/news/xau-usd-gold-price-forecast-fed-in-spotlight-bullish-explosion-or-crash-ahead-20240316.html

2024-03-15 16:00

US DOLLAR FORECAST – EUR/USD EUR/USD moves without directional conviction ahead of next week’s FOMC decision The Fed is seen keeping interest rates steady, but there is no consensus on guidance This article looks at EUR/USD’s technical outlook over the coming trading sessions Most Read: US Dollar Soars on Inflation Risks as Fed Looms; EUR/USD, GBP/USD, USD/JPY Setups The U.S. dollar was broadly flat against the euro on Friday (EUR/USD 0.0% at 1.0885) after a strong showing in the previous session, despite an uptick in U.S. Treasury yields, with many traders opting to stay on the sidelines and avoid large directional bets ahead of next week's Federal Reserve’s decision. Source: TradingView Although the U.S. central bank is expected to keep its policy settings unchanged at its March meeting, there is no general consensus on what policymakers will say about the outlook. For this reason, volatility is likely to accelerate in the coming sessions across assets. Want to know where the U.S. dollar is headed over the medium term? Explore key insights in our quarterly forecast. Request your free guide now! In terms of possible scenarios, traders should not be surprised if the FOMC adopts a slightly more hawkish stance in light of upside inflation risks, which have clearly materialized in the latest CPI and PPI reports released a few days ago. While the Fed has stated that it intends to begin dialing back policy restraint at some point in 2024, stalled progress on disinflation, coupled with economic resilience, could force the institution to delay the start of its easing cycle and signal fewer rate cuts for the period. Presently, markets are anticipating approximately three quarter-point rate reductions through year’s end. Should policymakers indicate an intention to deliver fewer cuts than currently priced in, we could see yields push higher across the curve, bolstering the U.S. dollar in the process. 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 leveled off on Friday after falling sharply on Thursday, with prices hovering slightly above support at 1.0875. If this floor holds in the coming days, buyers may slowly start reentering the market again, setting the stage for a move towards 1.0980. On further strength, all eyes will be on 1.1020. On the flip side, if technical support caves in, sellers may feel emboldened to launch a bearish assault on 1.0850/1.0835, an area where three significant moving averages intersect. Below this band, attention will be directed towards 1.0790 and 1.0725 thereafter. EUR/USD PRICE ACTION CHART EUR/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-eur-usd-levels-off-at-support-ahead-of-key-fed-decision-outlook-analysis-20240315.html

2024-03-15 13:00

US Dollar Price, Analysis, and Charts Major central bank policy decisions next week. US dollar index nears a cluster of resistance points. British Pound edging lower ahead of UK inflation report. The latest US PPI report showed that wholesale inflation remains sticky, denting the recent disinflation story. US y/y inflation rose 1.6% in February, above market expectations of 0.9% and a prior month’s revised 1.0%. According to the US Bureau of Labor Statistics, 'On an unadjusted basis, the final demand index advanced 1.6 percent for the 12 months ended in February, the largest rise since moving up 1.8 percent for the 12 months ended September 2023. In February, nearly two-thirds of the rise in final demand prices can be traced to the index for final demand goods, which advanced 1.2 percent. Prices for final demand services moved up 0.3 percent. The index for final demand less foods, energy, and trade services increased 0.4 percent in February after rising 0.6 percent in January. For the 12 months ended in February, prices for final demand less foods, energy, and trade services moved up 2.8 percent.’ These numbers will have been noted by the Fed ahead of next Wednesday’s FOMC policy meeting and rate decision. The Fed is fully expected to keep rates unchanged next week but any nod to higher inflation by Fed Chair Jerome Powell will keep traders attention. After yesterday’s data, the probabilities for a June rate fell further with the market now seeing a rough 60% chance of a 35bp rate at the end of H1. The US dollar index rallied after Thursday’s data, paring recent losses. The index now nears a zone of resistance made up of the 50% Fibonacci retracement at 103.41 and all three simple moving averages that currently sit between 103.57 and 103.71. This zone of resistance should hold ahead of the FOMC decision. US Dollar Index Daily Price Chart The Bank of England (BoE) will also announce its latest policy decision next week and the UK central bank is fully expected to leave all policy settings untouched. The main point of interest at the meeting will be the interest rate vote split. At the last meeting, six out of the nine members voted for rates to be left unchanged, two members voted for a hike, and one member voted for a rate cut. If this split is changed, markets will likely re-price Sterling in the short term. For all major central bank meeting dates, see the DailyFX Central Bank Calendar GBP/USD is currently trading on either side of 1.2742, a prior level of resistance. A block of prior daily candles and the 20- and 50-day simple moving averages guard the next level of support at 1.2667. This is likely to hold until next week’s central bank meetings. If not, 1.2600 and 1.2547 come into focus. GBP/USD Daily Price Chart All Charts via TradingView What are your views on the US Dollar and 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/us-dollar-closes-in-on-resistance-gbp-usd-testing-support-interest-rate-decisions-near-20240315.html