2024-05-06 08:28

The US economy added a smaller 175,000 jobs last month. The US unemployment rate increased to 3.9% in April. The yen gained 3.5% last week, ending its best week since December 2022. The USD/JPY forecast shows a temporary pause in a downward trend as the dollar recovered on Monday. Still, a recent decline in US employment has fueled expectations for Fed rate cuts in 2024. Meanwhile, the yen maintains its strength after a suspected intervention by the Bank of Japan last week. The US economy added 175,000 jobs last month, compared to estimates for 243,000. Meanwhile, the unemployment rate increased to 3.9% when economists had expected it to hold at 3.8%. This was the first downbeat NFP report in a while and came as a relief to Fed policymakers. As a result, the Fed might cut rates at least twice this year. After the report, markets are pricing in 45 bps of cuts in 2024. However, analysts believe policymakers need more evidence that the downtrend in the labor market will continue. However, if the following employment report is robust, policymakers will remain cautious about rate cuts. Meanwhile, they will cheer any signs of weakness in the labor market as it will mean less inflationary pressure. Elsewhere, the yen remained strong despite a pullback on Monday. Notably, the currency gained 3.5% last week, ending its best week since December 2022. The gains came after two suspected interventions by Japanese authorities on Monday and Wednesday. This has given them some time to reduce the economic effects of a weak currency. USD/JPY key events today There are no critical reports from the US today. Meanwhile, Japan is observing a holiday, which will keep investors on alert for any intervention. USD/JPY technical forecast: Pullback within the bullish flag On the technical side, the USD/JPY price has retested the 154.01 critical level after making a new low. The bias is bearish because the price trades well below the 30-SMA, while the RSI sits below 50 in bearish territory. Moreover, the price trades in a flag pattern, respecting its support and resistance. If the 154.01 key level holds as resistance, the price will bounce lower and likely reach the 151.01 support level. However, if the resistance gives way, it will retest its channel resistance and the 30-SMA before declining. https://www.forexcrunch.com/blog/2024/05/06/usd-jpy-forecast-fed-rate-cut-bets-surge-after-dismal-nfp/

2024-05-05 07:44

Powell confirmed that the Fed’s next policy move would be a rate cut. Data on Friday revealed a bigger-than-expected dip in US employment. Investors will focus on the Bank of England interest rate decision on Thursday. The GBP/USD weekly forecast indicates a bullish trend as poor US employment data strengthens expectations for a Fed rate cut, putting pressure on the dollar. Ups and downs of GBP/USD The pound had a bullish week as the dollar fell due to Powell’s remarks and downbeat data from the US. When the week began, data from the US revealed a bigger-than-expected increase in labor cost growth. This gave the dollar a small lift. However, it gave up all its gains when Powell confirmed that the Fed’s next policy move would be a rate cut. Furthermore, data on Friday revealed a bigger-than-expected dip in US employment. At the same time, the unemployment rate increased, showing a slowdown in the labor market. This relieved the Fed, which is keeping a close eye on the labor market. At the same time, business activity in the service sector fell significantly, pointing to easing inflationary pressures. Next week’s key events for GBP/USD Next week, the UK will release data on manufacturing production and economic growth. However, investors will focus more on the Bank of England interest rate decision on Thursday. The central bank will likely hold rates to give clues on the future of interest rates in the UK. Notably, investors have pushed back the timing for BoE rate cuts. This is because the UK economy has recovered from its shallow recession. At the same time, BoE policymakers are keeping an eye on the Fed, which has said it will delay rate cuts. GBP/USD weekly technical forecast: Bullish momentum pushes past solid trendline On the technical side, the GBP/USD price has broken above a solid resistance trendline and is testing the 1.2550 key resistance level. This indicates a surge in bullish momentum. At the same time, it has broken above the 22-SMA, confirming a shift in sentiment to bullish. However, bears are putting pressure on the move, leading to a big wick. It is clear that the tides are about to change for the pound, and this will become clearer with the next candle. There is a high chance that the new bias will continue next week. The price will likely retest the 1.2802 resistance level in such a case. https://www.forexcrunch.com/blog/2024/05/05/gbp-usd-weekly-forecast-dismal-nfp-boosts-pound-eyes-on-boe/

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/