2024-03-15 09:15

USD/JPY News and Analysis Rengo announces highest wage increase in 30 years BoJ maintains longer-term uptrend and prices continue to rise Remaining central banks to meet next week: BoJ, RBA, Fed, BoE The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Rengo Announces Highest Wage Increase in 30 Years Rengo announced a wage agreement at 5.28% - the largest increase in the last 30 years as conditions begin to align for the Bank of Japan (BoJ) ahead of next weeks policy meeting. Rengo is Japan’s largest trade union group, representing over seven million workers at some of Japan’s largest companies. Previously, the BoJ mentioned the precondition for a rate hike will be to observe a ‘virtuous wage-price cycle’. Inflation remains above 2% for well over a year, although, it has been falling towards the target from well over 3% raising concerns around the persistence of underlying inflation. Nevertheless, recent developments appear to bode well for the BoJ to forge a new path towards positive interest rates once again. The immediate reaction to the announcement suggested a slight yen bid but it wasn’t long before USD/JPY surprisingly turned higher. USD/JPY 5-Minute Chart Source: TradingView, prepared by Richard Snow USD/JPY Maintains its Long-Term Uptrend as Prices Continue to Rise The US dollar received a boost yesterday after PPI data printed slightly hotter-than-expected, buoyed further by rising US treasury yields (2, 10-year). That momentum has continued in the early hours of the London session as USD/JPY looks to end the week with four straight days of gains. The bullish lift presents improved entry levels for bears looking for further yen appreciation and a move lower in USD/JPY. However, the recent bullish lift has gathered pace after bouncing off the 200-day simple moving average (SMA) and the 146.50 marker, trading above the 50 SMA. Naturally, 150 reappears as the next level of resistance. 146.50 marks the tripwire for a potential change in sentiment if the threat of rate hikes becomes more imminent over the next few days. One potential stumbling block is Governor Ueda’s own assessment of the local economy where he has noted the recovery is modest and he has seen in some data. This is after a recent revision in Q4 GDP revealed that Japan has not entered into a technical recession, but the slight revision appears academic at this point, with the Japanese economy showing signs of concern. USD/JPY Daily Chart Source: TradingView, prepared by Richard Snow Remaining Central Banks to Meet Next Week The BoJ is due to meet again next Tuesday to set monetary policy but markets anticipate there will be no change, but the chances of a surprise hike are not to be dismissed (41% at the time of writing). Instead, a more likely outcome will be for the Bank to use the opportunity to tee up the April or June meetings as ‘live’ events for a withdrawal from negative interest rates. The minutes of the meeting will be heavily scrutinised late on 24 March when the transcript is released. Stay up to date with the latest breaking news and themes driving the market by signing up to our weekly newsletter: https://www.dailyfx.com/news/japanese-wages-rise-to-30-year-high-fueling-boj-rate-speculation-20240315.html

2024-03-15 00:10

Most Read: British Pound Outlook & Market Sentiment – GBP/USD, GBP/JPY, EUR/GBP The U.S. dollar surged on Thursday after a subdued performance in recent days, boosted by soaring U.S. Treasury yields following higher-than-anticipated February’s PPI numbers, released on the heels of Tuesday’s hot CPI report. Labor market data, showing that the number of Americans applying for jobless benefits stayed at historically low levels last week, further solidified the greenback’s gains by bolstering confidence in the country’s economic prospects. Presented below are key economic releases from today’s session. Although the Fed has indicated that it would likely be appropriate to remove policy restriction this year, stagnating progress on disinflation, juxtaposed with the economy's resilience, could reduce the scope of incoming rate cuts and perhaps delay the start of the easing cycle, currently projected for June. We will know more about the FOMC's monetary policy outlook next week when policymakers gather for their March meeting and release updated macro projections (SEP), including the dot-plot - a diagram that maps out Fed officials' estimates of how borrowing costs are likely to evolve over various years. With upside inflation risks starting to materialize, traders should not be surprised if the central bank signals fewer rate reductions for 2024 compared to three months ago. This scenario could keep bond yields biased upwards in the near term, reinforcing the greenback's bullish comeback. Want to know where EUR/USD is headed over the coming months? Explore all the insights available in our quarterly forecast. Request your complimentary guide today! EUR/USD FORECAST - TECHNICAL ANALYSIS EUR/USD fell sharply on Thursday, but managed to hold above confluence support around 1.0875. Bulls must protect this technical floor tooth and nail; failure to do so could result in a pullback towards 1.0850, followed by 1.0790. On further weakness, all eyes will be on 1.0725. On the other hand, if buyers trigger a bullish reversal and prices rebound off current levels, resistance is located at 1.0980 and 1.1020 thereafter. Above these thresholds, the focus will be on 1.1075, a key ceiling created by a medium-term descending trendline. EUR/USD PRICE ACTION CHART EUR/USD Chart Created Using TradingView Wondering about the yen's outlook – will it weaken or recover in the near term? Discover all the details in our quarterly forecast. Don't miss out – request your complimentary guide today! USD/JPY FORECAST - TECHNICAL ANALYSIS USD/JPY extended its rebound on Thursday, coming within striking distance from reclaiming its 50-day simple moving average at 148.40. The market reaction here will be key, with a breakout possibly fueling an advance towards 148.90, followed by 149.70. Conversely, if renewed selling pressure emerges and drives the exchange rate lower, support looms at 147.50. Below this floor, market focus will shift towards the 200-day simple moving average, located near 146.40, and subsequently towards February's swing lows in the vicinity of 146.00. USD/JPY PRICE ACTION CHART USD/JPY Chart Created Using TradingView GBP/USD FORECAST - TECHNICAL ANALYSIS GBP/USD continued to lose ground on Thursday, steadily approaching an important support zone near 1.2700. This area should provide stability in case of further losses, but a breakdown is likely to spark a retracement toward trendline support at 1.2665. Moving lower, attention will be on the 1.2600 handle. Alternatively, if sentiment improves and cable mounts a turnaround, initial resistance appears at 1.2830, followed by 1.2895. Breaking through this barrier might pose a challenge for the bullish camp, although a successful breach could lead to a rally toward the psychological 1.3000 mark. GBP/USD PRICE ACTION CHART GBP/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-us-dollar-soars-on-inflation-risks-as-fed-looms-eur-usd-gbp-usd-usd-jpy-setups-20240315.html

2024-03-14 18:00

Oil (Brent, WTI) Analysis IEA projects improved oil outlook for 2024, contingent upon OPEC+ cuts into year end Brent crude oil surpasses $85 a barrel WTI crude oil breaks above prior level of resistance to trade at a 3-month high The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library IEA Projects Improved Oil Outlook for 2024 The International Energy Agency (IEA) revised its full year outlook for oil demand growth but it still remains a long way off the OPEC forecast. The IEA has cited Houthi attacks in the Red Sea and an improved outlook for the United States as reasons it revised oil demand growth by an additional 110,000 barrels per day (bpd), taking the figure to 1.3 million bpd. The number is still a far cry from OPEC’s forecast of 2.25m bpd and is contingent on the assumption that OPEC+ cuts remain for the full year. So far, OPEC+ has extended these to the end of June. The Houthi attacks on shipping vessels has forced many tankers to avoid the corridor, seeking safer, but longer routes around the Cape of Good Hope in Southern Africa. Travelling a longer distance, often at a faster pace, is likely to add to fuel consumption and lessen/delay supplies. ‘Oil on the water’ surged by 85 million barrels in February, bringing the total to 1.9 billion barrels, as tankers are forced to re-route. However, the IEA issued a caveat that economic headwinds cloud the outlook with uncertainty despite shipping concerns providing a short-term boost. On the supply side, the agency noted the greater prominence of non-OPEC suppliers but sees the extended OPEC+ cuts bringing the picture into greater balance. All in all, the changes now see the demand/supply equation shift from surplus to slight deficit. Demand/Supply Balance (IEA) Source: IEA, Reuters, prepared by Richard Snow Brent crude oil Surpasses $85 a Barrel Brent has made a notable effort to break above the prior range of consolidation which formed mostly between $82 and $84. With the oil price above $85 (at the time of writing) a close on the daily chart above this level bodes well for a potential extension of the move. The longer-term bullish trend remains intact as prices continue to make higher highs and higher lows since the December bottom. More recently, bulls will be encouraged by the bounce off the 200-day simple moving average as it acted as a springboard for the latest move. The upside level of interest comes in at $89 which is some distance away. Immediate support is the $85 level, followed by $82. Brent Crude Oil Daily Chart Source: TradingView, prepared by Richard Snow The oil market is driven by fundamental factors such as demand and supply, geopolitical developments and global growth prospects to name a few. Find out all there is to know in our comprehensive guide below: WTI crude oil breaks above prior level of resistance to trade at a 3-month high WTI crude oil futures continue to trade within the broader ascending channel. Like the Brent crude chart, WTI also bounced off the 200 SMA but also the significant $77.40 level. This long-term level has provided major pivot points on the monthly chart dating all the way back to 2006. Now that WTI trades above the prior November high of $79.80, the next level to the upside emerges around channel resistance at the $83/$84 zone, followed by $86. WTI (CL1!) Futures Daily Chart Source: TradingView, prepared by Richard Snow Stay up to date with breaking news and themes currently driving the market by signing up to our weekly newsletter : https://www.dailyfx.com/news/iea-revises-oil-demand-outlook-tweaks-supply-estimates-oil-rises-20240314.html

2024-03-14 14:03

Gold (XAU/USD) and Silver (XAG/USD) Price, Analysis and Chart Gold trading on either side of $2,165/oz. but a break may be near. Silver prints a fresh three-month high. Most Read: Euro Slides Against Perky Dollar as US Inflation Springs Upside Surprise. The latest US PPI data – wholesale inflation - came in above market expectations, and last month’s print, but the dollar and US rate cut forecasts, remain little changed. US Retail Sales in February picked up, turning positive, but again missed market forecasts. The net effect of today’s US data releases left the US dollar index trading on either of 103.00 in lackluster trade. The dollar has been stuck in a restrictive range this week ahead of next week’s FOMC meeting. US Dollar Index Daily Chart With the greenback barely moving, gold has found it difficult to make a move, one way or the other. This period of consolidation is starting to look like a new bullish pennant formation, although it will need another couple of candles to see if this plays out. If this pattern is formed, gold is likely to push further ahead and make a fresh record high. Support is seen at $2,148/oz. ahead of $2,128/oz. Pennant Patterns: Trading Bullish and Bearish Pennants Gold Daily Price Chart Retail trader data show 40.95% of traders are net-long with the ratio of traders short to long at 1.44 to 1.The number of traders net-long is 1.53% higher than yesterday and 2.21% lower than last week, while the number of traders net-short is 1.91% higher than yesterday and 6.62% higher than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Gold prices may continue to rise. See what these swings in positioning mean for the price of gold. Silver has been on a roll since the end of February with yesterday’s sharp rise taking it to highs last seen in early December last year. We noted recently that the silver market had become heavily oversold using the CCI indicator, again highlighting a move higher in the precious metal. Resistance is seen at $25.26 ahead of $25.92 and this second level may prove difficult to overcome shortly. Initial support at $24.54. Silver Daily Price 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-price-coils-further-silver-hits-a-multi-week-high-20240314.html

2024-03-14 12:30

Japanese Yen (USD/JPY) Price and Charts USD/JPY ticks up again However it remains close to two months lows Next week’s BoJ policy meet could provide some unusual excitement Learn how to trade USD/JPY with our free guide The Japanese Yen drifted lower against the United States Dollar on Thursday but remains close to two-month highs as the market looks with unusual interest toward the Bank of Japan’s next monetary policy meeting on March 19. There are perhaps the clearest ever signs that the central bank could be serious about ending decades of extremely low-interest rates. The BoJ has stuck to ultra-loose policy settings, even as other central banks ramped up borrowing costs to fight a global wave of inflation. That’s because Japanese authorities have for years been trying to generate some pricing power in the face of moribund domestic demand. Now, it seems, they might have succeeded. Various BoJ policymakers seem better disposed to raising interest rates, or at least considering such a thing. The latest news on the inflation front is that wage settlements look to be heading higher again. The manufacturing bellwether has reportedly agreed to the highest pay rises for twenty-five years, with peer companies all but bound to follow its lead. This suggests that corporate finance departments sense a more durable recovery. Earlier this week came news that Japan avoided a technical recession at the start of this year, with Gross Domestic Product growth revised higher. Admittedly growth is hardly stellar, but at least the BoJ won’t be accused of tightening credit in a recessionary environment if it should move. Of course, the Yen will likely continue as a yield-laggard currency for a long time to come, but the prospect of a major shift at the BoJ will continue to offer it support. The rest of this week’s major USD/JPY economic data cues will come from the US side, with retail sales and consumer sentiment numbers both due before the close of play on Friday. USD/JPY Technical Analysis Chart Compiled Using TradingView USD/JPY has staged a modest bounce in the past week. This was rooted in the fundamentals with the Dollar gaining some ground on a modest expectation beat for US inflation figures on Monday. However, this hasn’t shifted the dial on US interest rate expectations. Cuts are still expected to start in June. For now, USD/JPY looks stuck in the broad range between the first and second retracement levels of the rise from December’s lows to the three-month peaks of mid-February. The upside of that range is 148.398, with 146.842 as the lower bound. That latter point has been probed by Dollar bears on three daily occasions in the past two weeks, but even then the market has always closed above it. Below that mark, the 200-day moving average offers further support. It comes in at 146.248 now. Unless Dollar bulls can regain recent highs, the impression that the current pause is just a break on the road lower is likely to endure. The pair was edging toward oversold conditions after its recent fall, so a break was likely. The market looks to be developing a head and shoulders pattern, the classic top out. This process will bear watching into the next week of trade. It promises to be an interesting one for the Yen. --By David Cottle for DailyFX https://www.dailyfx.com/news/japanese-yen-slips-a-little-but-boj-policy-hopes-still-lend-support-20240314.html

2024-03-14 09:10

EUR/USD News and Analysis ECB member favours multiple rate cuts ahead of the summer EUR/USD flirts with familiar zone of resistance More ECB speakers scheduled today as event risk quietens down The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library ECB Member Favours Multiple Rate Cuts Ahead of the Summer The Greek central bank head, Yannis Stournaras (dove) mentioned in an interview this morning that there remains around 30% of past tightening yet to filter into the real economy, stressing the need to move the needle on rates ahead of the Fed. The European economy has stagnated since Q4 2024, with GDP growth oscillating around zero percent while the US shows remarkable economic resilience. Therefore, there is some logic behind the recent call to ease monetary policy in an attempt to support the ailing economy. Stournaras went as far as to advocate for two cuts before the summer break which means a total of 50 basis points shaved off the current benchmark interest rate. The ECB official warned against exaggerating the potential for a wage-price spiral as Christie Lagarde and other governing council members turned their focus on wage negotiations and the potential for higher wages adding to inflation concerns. Immediate Market Reaction EUR/USD dropped as Stournaras’ statements filtered appeared across trading monitors, but the pair managed to stabilise moments after. EUR/USD 5-Minute Chart Source: TradingView, prepared by Richard Snow EUR/USD Flirts with Familiar Zone of Resistance EUR/USD Weekly Chart Source: TradingView, prepared by Richard Snow The daily chart highlights the resistance zone as the area between the two Fibonacci retracements which are made up of the 2020 to 2022 major decline and the 2023 decline. The levels of interest correspond to the 50% and 61.8% retracements of the respective, implied Fibonacci projections. Price action remains above the 50 and 200-day simple moving averages (SMAs) – which is typically bullish. However, price momentum appears to be stalling and the 50 SMA reveals as much, dropping lower towards the 200 SMA. Should the bullish move continue, a break above 1.0960 will be required with subsequent momentum, eying 1.1017. EUR/USD Daily Chart Source: TradingView, prepared by Richard Snow Stay up to date with the latest market moves and themes driving price action by signing up to our weekly newsletter: Keep an eye out for any further support of this view as a number of other governing council members are due to provide their thoughts on monetary policy later today. https://www.dailyfx.com/news/eur-usd-stumbles-as-ecb-official-calls-for-two-rate-cuts-before-the-summer-20240314.html