2024-06-18 13:43
US retail sales data on Tuesday revealed a smaller-than-expected increase. The Fed has projected only one cut this year. The pound fell ahead of the Bank of England policy meeting. The GBP/USD price analysis pointed south despite a decline in the dollar after retail sales missed forecasts. The pound remained weak as investors prepared for the Bank of England policy meeting later in the week. US retail sales data on Tuesday revealed a smaller-than-expected increase, showing consumer spending was not as great as expected in May. Moreover, figures for April were revised lower, indicating a slowdown in the economy. Retail sales increased by 0.1% in May after falling 0.2% in the previous month. This was in line with recent US data that has revealed weaker demand in the economy and cooler inflation. All this indicates a higher likelihood of the Fed implementing two rate cuts this year. However, the Fed has projected only one cut this year, which has led to some confusion in the markets. If data continues showing weak economic activity, the Fed might be forced to cut rates earlier than December. Meanwhile, the pound fell ahead of the Bank of England policy meeting, where the central bank will likely keep rates unchanged. At the same time, policymakers might hint at the possible timing of the first rate cut. Investors are also gearing up for the UK CPI report coming on Wednesday, which will likely guide markets on the outlook for cuts in the UK. Economists believe inflation rose by 2.0% in May after a 2.3% increase in April. GBP/USD key events today Investors will keep digesting the US retail sales report as there are no more key events for the day. GBP/USD technical price analysis: Bears find footing below 1.2700 On the technical side, the GBP/USD price has broken below the 1.2700 support, retested it, and is now moving lower. This is a big step for bears because the price has tried and failed to break below this support level for a long time. This break allows the price to trend lower and target the 1.2600 support level. The price trades well below the 30-SMA, and the RSI is below 50 in bearish territory, supporting the bearish bias. This bias will continue if the price trades below the 30-SMA, and the price might continue below the 1.2600 support. https://www.forexcrunch.com/blog/2024/06/18/gbp-usd-price-analysis-downbeat-us-retail-sales-boosts-pound/
2024-06-18 10:37
The Reserve Bank of Australia held rates at 4.35% on Tuesday. Australia’s inflation is at 3.6%, well above the central bank’s target. Economists expect the US retail sales figure to come in at 0.3%. The AUD/USD outlook is slightly bullish as the Aussie edges up after the Reserve Bank of Australia policy meeting. Meanwhile, the dollar remained steady as investors waited for the US retail sales report to provide more clues on the state of the economy. The Reserve Bank of Australia held rates at 4.35% on Tuesday but discussed the possibility of hiking interest rates. Australia’s inflation is at 3.6%, well above the central bank’s target. Therefore, the RBA has remained cautious, and markets expect it to be among the last central banks to start cutting interest rates. RBA Governor Bullock said recent data had raised fears that inflation remained high. After the decision, the Aussie rose slightly before reversing. At the same time, bets for an RBA cut in December fell from 65% to 44%. Meanwhile, the US dollar was steady as investors waited for the US retail sales report, which will show the state of consumer spending. Economists expect the figure to come in at 0.3%, higher than the previous month’s 0.0%. If this is the case, it will indicate an increase in consumer spending, likely boosting the dollar. At the same time, market participants await speeches from several Fed officials that will give clues on the outlook for rate cuts. Last week, Fed rate cut expectations fluctuated as the data showed easing inflation while the Fed maintained a cautious outlook, projecting only one rate cut this year. AUD/USD key events today US core retail sales US retail sales AUD/USD technical outlook: Price nears 0.6580 range support. On the technical side, the AUD/USD price is consolidating between the 0.6580 support and the 0.6701 resistance levels. Bears are in the lead within this range area because the price trades below the 30-SMA. At the same time, the RSI is below 50, in bearish territory. Moreover, the price is closer to the range support than the range resistance. Currently, bulls are testing the 30-SMA resistance but have made a large wick, indicating rejection. Therefore, there is a high chance the price will fall to retest the range support. A break below this level would allow the price to start trending lower. https://www.forexcrunch.com/blog/2024/06/18/aud-usd-outlook-aussie-gains-following-rba-policy-meeting/
2024-06-17 11:58
The euro remained weak due to fears of a financial crisis in France. The loonie strengthened on Friday as data revealed a 1.1% increase in factory sales. Expectations for BoC cuts have fallen since the Fed’s slightly hawkish policy meeting. The USD/CAD outlook shows bullish momentum on Monday as the dollar rises amid political uncertainty in the Eurozone. Meanwhile, the Canadian dollar retreated from Friday’s highs when data showed a robust Canadian economy. The greenback started the week positively as the euro remained weak due to fears of a financial crisis in France. The recent announcement of a snap election means a change in leadership in the country that could worsen its financial state. Consequently, French markets sold off last week, bringing back memories of the UK budget crisis. Meanwhile, the Euro fell to an over-one-month low last week, especially since the ECB showed no signs that it would support French markets. The euro’s decline has boosted the dollar as it makes up 57% of the dollar index. Meanwhile, the Canadian dollar gave up some of the gains it made last week due to a strong dollar. The loonie strengthened on Friday as data revealed a 1.1% increase in factory sales in April. At the same time, wholesale trade rose by 2.4% in April. Furthermore, USD/CAD traders have already priced in the Bank of Canada’s cuts this year. This means that any talk on rate cuts will have little impact on the pair. Last week, the Bank of Canada became the first major central bank to cut interest rates. However, expectations for cuts have fallen since the Fed’s slightly hawkish policy meeting. USD/CAD key events today Empire State Manufacturing Index USD/CAD technical outlook: Bulls challenge 30-SMA On the technical side, the USD/CAD price is on the verge of breaking above the 30-SMA to retest the 1.3780 resistance level. At the same time, the RSI has gone slightly above 50 into bullish territory. Consequently, there is a chance the price will breach the SMA. If this happens, bulls might challenge the 1.3780 resistance level, seeking a new high. However, bears have also shown strength with a bearish engulfing candle. If this strength continues, the price might fail to go above the SMA. This could mean a drop to the bullish trendline or the 1.3700 support level. https://www.forexcrunch.com/blog/2024/06/17/usd-cad-outlook-dollar-climbs-amid-eurozone-political-turmoil/
2024-06-17 09:13
The announcement of a snap election in France has caused considerable turmoil in the Eurozone. The ECB has remained quiet about supporting French markets. Markets are still absorbing Fed forecasts for one rate cut this year. The EUR/USD forecast points to a bearish trend as the euro lingers near a recent low reached last week due to political uncertainty in the Eurozone. At the same time, investors were waiting for more data this week to give clues on the outlook for Fed rate cuts. The announcement of a snap election in France has caused considerable turmoil in the Eurozone. Investors are concerned that a new government would worsen the country’s financial state. This has weighed on the euro and boosted the US dollar. At the same time, the ECB has remained quiet about supporting French markets, which have sold off since the announcement. This uncertainty will likely keep the euro on the back foot for some time. On the other hand, the dollar has remained strong as safe-haven demand rises with the uncertainty in the Eurozone. Moreover, markets are still absorbing Fed forecasts for one rate cut this year in December. Notably, on Sunday, Fed’s Neel Kashkari supported this outlook, saying it was reasonable to cut rates once. This has reversed moves after softer-than-expected US inflation. Nevertheless, market participants are pricing in the possibility of a rate cut in September since the economy is showing signs of slowing down. A survey on Friday showed a significant decline in US consumer sentiment amid inflation concerns. Meanwhile, another report showed a decrease in US import prices, supporting the view that inflation is easing. Traders are awaiting data on retail sales and flash PMIs later this week. EUR/USD key events today Empire State manufacturing index EUR/USD technical forecast: Price trends downward after consolidation On the technical side, the EUR/USD price is in a bearish trend after breaking out of its consolidation area. Previously, it had been caught between the 1.0800 support and the 1.0900 resistance level. However, when bulls tried to break out of the range, they failed and the RSI made a bearish divergence, indicating weaker bullish momentum. After this, bears took over with enough strength to break below the 1.0800 range support. Currently, the price is trading in a new bearish channel. Furthermore, bears recently broke below the 1.0725 critical level, a sign that the price could continue lower. https://www.forexcrunch.com/blog/2024/06/17/eur-usd-forecast-sellers-regain-amid-political-uncertainty/
2024-06-16 08:00
US consumer and wholesale inflation figures came in below estimates. The Fed forecast only one rate cut this year. The Reserve Bank of Australia will hold its policy meeting next week. The AUD/USD weekly forecast is slightly bearish as the dollar recovers on the Fed’s outlook for one rate cut in 2024. Ups and downs of AUD/USD The Aussie ended on a bullish candle but closed well below its highs as the dollar rallied towards the end of the week. During the week, investors focused on consumer and wholesale inflation figures, which came in below estimates. Consequently, there was more confidence that the Fed would cut rates twice this year. However, the Fed had a more hawkish outlook, with policymakers noting that the economy remained strong. As a result, the central bank forecast only one rate cut this year. Therefore, although the dollar started the week down, it ended strong, leading to a decline in the AUD/USD price. Next week’s key events for AUD/USD Next week, the Reserve Bank of Australia will hold its policy meeting, probably keeping interest rates unchanged. Furthermore, investors will focus on the US retail sales report, which will show the state of consumer spending in the country. The RBA is widely expected to maintain rates. However, the market focus will be on the messaging after the meeting, which might indicate when the central bank will start cutting interest rates. Futures currently show a lower than 50% likelihood of a cut in December. Meanwhile, the US retail sales report will likely show no growth during the month, increasing policymakers’ confidence that the economy is slowing down. AUD/USD weekly technical forecast: Price fluctuates within 0.6580 support and 0.6701 resistance On the technical side, the AUD/USD price is caught in a range between the 0.6580 support and the 0.6701 resistance levels. However, bears show more strength within the range, with bigger candles than bulls. Moreover, the price sits below the 22-SMA, a sign that bears are in the lead. The RSI has also crossed below 50, supporting bearish momentum. Therefore, there is a high chance that the price will break below the 0.6580 range support. If this happens, it might collapse further to retest the 0.6401 support level. The price will confirm a downtrend when it starts making lower highs and lows. https://www.forexcrunch.com/blog/2024/06/16/aud-usd-weekly-forecast-fed-signals-one-rate-cut-for-2024/
2024-06-15 08:19
UK data revealed a significant jump in monthly unemployment claims. US data revealed a smaller-than-expected figure for consumer inflation in May. Fed forecasts at the FOMC meeting showed only one rate cut in December. The GBP/USD weekly forecast shows more downside potential as Fed forecasts for rate cuts overshadow the recent cooler inflation figures. Ups and downs of GBP/USD The pound had a bearish week amid a range of economic reports from the US and the UK. At the start of the week, UK data revealed a significant jump in monthly unemployment claims, showing a decline in the labor market that weighed on the pound. However, the move later reversed when US data revealed a smaller-than-expected figure for consumer inflation in May. Investors raised bets for a Fed rate cut in September, pushing the dollar lower. Unfortunately, Fed forecasts at the FOMC meeting showed only one rate cut in December, which helped the dollar recover as the week ended. This recovery continued despite softer-than-expected wholesale inflation data. Next week’s key events for GBP/USD Next week, the UK will release several major reports, including the CPI, retail sales, and manufacturing PMI. At the same time, investors will pay attention to Thursday’s Bank of England policy meeting. Meanwhile, the US will only release its retail sales report. The UK consumer inflation report will significantly shape the outlook for interest rates. Inflation in the country has been on a downtrend and is currently at 2.3%, near the central bank’s target. However, in the last report, economists had expected it to reach 2.1%. Another bigger-than-expected figure would lower bets for a cut in August. Meanwhile, the Bank of England will likely maintain rates at its policy meeting. GBP/USD weekly technical forecast: Break below 22-SMA triggers shift in sentiment On the technical side, the GBP/USD price has broken below the 22-SMA after failing to breach the 1.2800 critical resistance level. At the same time, the RSI has broken below 50, signaling a shift in sentiment to bearish. The previous bullish move paused at 1.2800, and bears started showing strength with large candles. The shift in sentiment will allow them to revisit the 1.2600 support level. If bears can break below this level to start making lower highs and lows, they will confirm a new downtrend. Moreover, the decline might continue to the 1.2400 key level. https://www.forexcrunch.com/blog/2024/06/15/gbp-usd-weekly-forecast-fed-rate-forecasts-pushes-dollar-up/
