2024-05-04 08:44
The dollar had its worst week in over two months. Poor employment figures from the US increased the likelihood that the Fed will cut rates in September. The Reserve Bank of Australia will make its rate decision on Tuesday. The AUD/USD weekly forecast leans bullish as the likelihood of a Fed rate cut in September increases due to weaker US data. Ups and downs of AUD/USD The Aussie ended the week up due to dollar weakness. With no key economic reports from Australia, the Australian dollar was at the mercy of the US dollar. Meanwhile, the dollar had its worst week in over two months. Dollar bears returned to the market after Powell maintained that the Fed would eventually cut rates. Moreover, poor employment figures from the US increased the likelihood that the Fed will cut rates in September. Additionally, the ISM released dismal US services PMI figures, further supporting bets for a September cut. Next week’s key events for AUD/USD Investors will only focus on one major event next week. The Reserve Bank of Australia will make its rate decision on Tuesday. According to a Reuters poll of economists, the central bank will keep rates unchanged as it works to lower inflation. However, investors will look for rate-cut clues from policymakers’ statements after the meeting. Moreover, economists changed their outlook for rate cuts and now only expect one from the previous two in 2024. This change follows recent data showing a smaller drop in inflation in Q1 than expected. AUD/USD weekly technical forecast: Bulls make another attempt at breaking key resistance zone On the technical side, the AUD/USD price has returned to the resistance zone comprising the 0.6600 key psychological level and the 0.5 Fib level. Bulls have struggled to break above this zone for a long time but have failed. Consequently, the price has mostly moved sideways. A recent surge in bullish momentum at the 0.6400 support level has pushed the price to retest this resistance zone. The bullish bias is strong, with the price well above the 22-SMA and the RSI heading for the overbought region. However, bulls must close well above this zone and make another bullish candle to confirm a break above the zone. Otherwise, the price will fall back below the SMA. If bulls succeed in breaching the resistance, the price will likely retest the 0.6851 level. https://www.forexcrunch.com/blog/2024/05/04/aud-usd-weekly-forecast-odds-of-fed-rate-cut-in-sep/
2024-05-03 11:32
The ECB’s Stournaras said on Friday that there might only be three ECB rate cuts this year. Eurozone economic growth beat forecasts in Q1. The dollar was heading for its worst week in two months. The EUR/USD price analysis shows bullish momentum as the euro gains strength on moderately less dovish ECB policy remarks. At the same time, the dollar is set for its worst week in two months, with all eyes on the upcoming US employment report. –Are you interested to learn more about crypto signals? Check our detailed guide- On Friday, ECB policymaker Yannis Stournaras said there might only be three ECB rate cuts this year. According to him, inflation is likely to remain high given recent upbeat economic data. Eurozone economic growth beat forecasts in Q1, which could lead to an increase in price pressure. However, the ECB is set to implement its first rate cut well ahead of the Fed in June. Therefore, the longer-term outlook for the euro remains bearish. Moreover, three rate cuts are much more than a possible single cut by the Fed. Meanwhile, the dollar was on the back foot on Friday ahead of the US nonfarm payrolls report. Its recent decline comes after the Fed held rates but maintained its stance on rate cuts. Investors had expected a more hawkish speech from Fed Chair Powell. However, he maintained that the next policy move would be a rate cut. The next big report from the US is the NFP, which will shape the outlook for rate cuts. Economists expect a drop in employment from the previous month. However, if the figures beat estimates as they have recently, the EUR/USD pair could rally. EUR/USD key events today US average hourly earnings US nonfarm employment change US unemployment rate US ISM services PMI EUR/USD technical price analysis: Bulls challenging strong resistance On the technical side, the EUR/USD price is challenging the 0.5 Fib retracement level, which sits near the 1.0750 key level. Moreover, the bias is bullish because the price recently broke above the 30-SMA after reversing at the 1.0650 key support level. At the same time, the RSI broke above 50 to trade in bullish territory. –Are you interested to learn more about forex robots? Check our detailed guide- Consequently, the price might soon break above the 0.5 Fib and the 1.0750 key resistance level to make a new high. Moreover, the path will be clear for bulls to retest the 1.0850 key level. https://www.forexcrunch.com/blog/2024/05/03/eur-usd-price-analysis-ecbs-less-dovish-remarks-boost-euro/
2024-05-03 08:13
The BoC might wait on a clearer Fed policy outlook to avoid a big divergence. Canada recorded a surprise trade deficit of C$ 2.28 billion in March. US equities rallied a day after the Fed held rates and sounded less hawkish than expected. The USD/CAD outlook sharply turned toward bearish territory, stirred by the hawkish sentiments of Bank of Canada Governor Tiff Macklem. At the same time, the Canadian dollar, which usually tracks US equities, strengthened amid a rebound on Wall Street. Meanwhile, investors awaited the US nonfarm payrolls report for more clues on Fed policy. –Are you interested to learn more about crypto signals? Check our detailed guide- On Thursday, BoC governor Macklem said there is a limit to how much US and Canadian interest rates can diverge. Although he added that the limit was still far, it confirmed the view that the BoC will wait to see what the Fed does on interest rates to avoid a big divergence. Investors remain confident that the Bank of Canada will cut rates before the Fed. Moreover, this could happen in June. Canada’s economy is slowly declining, while inflation is easing faster than expected. Therefore, conditions are aligning for the Bank of Canada to cut rates. Notably, data from Canada revealed a surprise trade deficit of C$ 2.28 billion as exports in the country fell faster than imports in March. At the same time, US equities rallied a day after the Fed held rates and sounded less hawkish than expected. Investors cheered the fact that Powell maintained the outlook for rate cuts, eliminating fears of possible hikes to control inflation. However, the timing for the first cut remains unclear. Investors will likely wait for more guidance from the upcoming US employment figures. USD/CAD key events today US nonfarm payrolls report US ISM Services PMI USD/CAD technical outlook: Bears to pounce 1.3650 support On the technical side, the USD/CAD price has fallen below the 30-SMA and could soon break below a solid support trendline. However, bears also face the 1.3650 key support level that could stop further declines. –Are you interested to learn more about forex robots? Check our detailed guide- Notably, the price has made a whiplash move, sharply rising before declining and reversing most of the previous move. Bearish momentum is now stronger as the RSI sits well below 50. Therefore, there is a good chance the price will break below 1.3650. In this case, bears would target the 1.3551 support level. https://www.forexcrunch.com/blog/2024/05/03/usd-cad-outlook-boc-governors-remarks-lift-canadian-dollar/
2024-05-02 09:48
The dollar fell Wednesday as investors absorbed the Fed’s policy meeting outcome. Powell maintained that the Fed’s next move would be a rate cut. British manufacturing fell in April. The GBP/USD outlook remains optimistic as the pound holds strong against a faltering dollar. Recent remarks from Fed Chair Jerome Powell have increased the likelihood that the Bank of England will cut rates well ahead of the Federal Reserve. –Are you interested to learn more about crypto signals? Check our detailed guide- The dollar fell Wednesday as investors absorbed the Fed’s policy meeting outcome. The central bank held rates. However, policymakers were cautious due to the recent pause in the decline in US inflation. Notably, Powell said he was less confident that inflation would reach the 2% target. However, he maintained that the Fed’s next move would be a rate cut. Therefore, investors who had expected a more hawkish speech were disappointed. There was no indication that the Fed would switch to rate hikes. Still, the outlook for rate cuts remains unclear. Moreover, Powell confirmed that the central bank would keep rates high until inflation resumed its downtrend. Investors still expect the first rate cut in September or December. Meanwhile, data from the US revealed a more significant increase in private employment than expected, highlighting the still-high demand in the labor market. However, another report showed that vacancies fell more than expected. Meanwhile, there was a mixed picture of manufacturing data as well. However, these reports had little impact on prices as investors had their focus on the FOMC meeting. Meanwhile, data from the UK revealed an unexpected drop in British house prices, indicating a decline in housing market activity. At the same time, British manufacturing fell in April, another sign that the recent economic recovery had paused. GBP/USD key events today US jobless claims GBP/USD technical outlook: Price struggles to sustain uptrend amid market pressure On the technical side, the GBP/USD price is struggling to hold on to its uptrend. The price sits slightly above the 30-SMA and the RSI slightly above 50. However, bulls face a solid barrier. The uptrend has paused near a solid resistance trendline and the 1.2550 key level. –Are you interested to learn more about forex robots? Check our detailed guide- Only an impulsive move could push above this resistance zone. In such a case, the price would climb to retest the 1.2701 key resistance level. On the other hand, if the resistance holds firm, the price will break below the 30-SMA and target the 1.2301 support level. https://www.forexcrunch.com/blog/2024/05/02/gbp-usd-outlook-pound-holds-firm-against-weakening-dollar/
2024-05-02 08:30
There is a high chance that Japanese authorities intervened again to support the yen. Powell maintained that the Fed was still looking to cut interest rates. The gap in long-term government bond yields between Japan and the US is 376 basis points. The USD/JPY forecast indicates a bearish trend as the yen gains ground following speculation of another Bank of Japan intervention. Meanwhile, the dollar weakened as Fed Chair Powell’s tone was less hawkish than anticipated. –Are you interested to learn more about crypto signals? Check our detailed guide- The yen had another sharp increase on Wednesday night, leading to a significant decline in the USD/JPY pair. There is a high chance that Japanese authorities intervened again to support their currency. However, they refused to comment on this. Furthermore, the BoJ intervention had a more significant impact since it came when the dollar was weak. Notably, the Fed maintained rates and signaled a delay in rate cuts due to the recent higher-than-expected inflation figures. However, Powell maintained that the central bank was still looking to cut interest rates. This eliminated any fears in the market that the central bank would indicate possible rate hikes. However, despite the recent strength in the yen, fundamentals still point to future declines. Notably, the gap in long-term government bond yields between Japan and the US is 376 basis points. As long as this gap remains wide, there will always be a reason to sell the yen and buy the dollar. However, the Bank of Japan is now focused on $160.00 as its line in the sand, making it a strong resistance. Meanwhile, mixed reports from the US showed a bigger-than-expected increase in employment and a drop in job vacancies. Investors are now waiting for Friday’s NFP report. USD/JPY key events today US unemployment claims USD/JPY technical forecast: Bears take control after a surge in momentum On the technical side, the USD/JPY price has broken below the 30-SMA, indicating a shift in sentiment to bearish. The first indication of bearish strength came when the price made a bearish engulfing candle at the 160.00 key level. –Are you interested to learn more about forex robots? Check our detailed guide- The decline paused at the 30-SMA, where bulls attempted to resume the uptrend. However, they found resistance at the 158.00 key level. This resistance allowed bears to breach the 30-SMA support barrier and retest the 154.01 support level. With this new sentiment, the price trades in a bearish channel. Therefore, the decline will likely continue with the next target at 151.01. https://www.forexcrunch.com/blog/2024/05/02/usd-jpy-forecast-yen-surges-on-another-possible-intervention/
2024-05-01 09:39
There was a bigger-than-expected increase in US employment cost growth. Markets have scaled back Fed rate cut expectations to only one cut in 2024. The policy outlooks of the Fed and the RBA are pretty similar. The AUD/USD forecast is leaning bearish as the US dollar strengthens following encouraging employment figures. Additionally, investor sentiment is tilting towards a hawkish stance from the FOMC, further bolstering the greenback and putting pressure on the Australian dollar. –Are you interested to learn more about crypto signals? Check our detailed guide- The US Labor Department reported a bigger-than-expected increase in employment cost growth. This report was another pointer to high inflation in the country. Consequently, there was a decline in Fed rate cut expectations. As investors await more employment figures from the US, there is a chance that they will continue beating forecasts. This, in turn, will keep the Fed hesitant to start cutting interest rates. Currently, markets have scaled back rate cut expectations to only one cut in 2024. However, after the FOMC meeting, this might change. If Powell is hawkish and highlights the still-high inflation, the dollar might make new highs, further weighing on the Aussie. However, the policy outlooks of the Fed and the RBA are pretty similar. Last week, inflation data from Australia beat estimates and led to an erosion of rate cut expectations. As a result, investors do not expect any cuts from the Reserve Bank of Australia this year. Additionally, some are pricing in a slight chance that the central bank will hike interest rates. This similarity in policy outlooks will keep a floor on any declines in the AUD/USD pair. AUD/USD key events today US ADP employment change US ISM manufacturing PMI US job vacancies FOMC policy meeting Bank of Canada governor Macklem speaks AUD/USD technical forecast: Bears trigger a sentiment shift and eye the 0.6400 support On the charts, the AUD/USD price has broken below the 30-SMA and the 0.6500 critical level to signal a bearish sentiment shift. This marks the end of the previous bullish trend, which paused at the 0.6575 critical level. When it stopped at this level, the RSI made a bearish divergence with the price, showing bullish momentum was fading. –Are you interested to learn more about forex robots? Check our detailed guide- Soon afterwards, bearish momentum surged, reversing the trend. After breaking below 0.6500, the price might retest this level as resistance before targeting the 0.6400 support level. https://www.forexcrunch.com/blog/2024/05/01/aud-usd-forecast-employment-data-boosts-greenback/
