2024-04-11 08:31

The US released yet another bigger-than-expected reading on inflation. Investors pushed back the timing of the first Fed rate cut to September. Markets are almost entirely pricing in the first ECB rate cut in June. Hot inflation figures shifted the EUR/USD forecast to bearish as the dollar gained due to a decline in rate cut expectations. Meanwhile, investors are awaiting the ECB policy meeting, during which the central bank might signal the start of rate cuts in June. On Wednesday, the US released yet another bigger-than-expected reading on inflation. This was the third month of high price increases, suggesting that the progress in inflation had stalled. Inflation rose by 0.4% in March, beating forecasts of a 0.3% increase. Furthermore, the inflation report came after an upbeat jobs report, showing a robust economy. Demand remains high in the US. Therefore, the Fed must maintain high interest rates for longer. Otherwise, inflation might get stuck at levels above the central bank’s target. After the report, investors pushed back the timing for the first rate cut to September. Additionally, investors now only expect two rate cuts in 2024 as opposed to three. Meanwhile, the outlook for the ECB is quite different. Markets are almost entirely pricing in the first rate cut in June. Inflation in the Eurozone will likely reach the 2% target by the end of the year. At the same time, the economy has slowed down significantly compared to the US. Therefore, there is more pressure on the ECB to cut rates. However, the ECB will likely maintain current rates at the policy meeting and signal the start of rate cuts. EUR/USD key events today European Central Bank policy meeting US PPI report US unemployment claims US 30-y bond auction EUR/USD technical forecast: Price falls sharply after false trendline break On the technical side, the EUR/USD price has fallen sharply after finding strong resistance at the 1.0875 key level. The price now trades well below the 30-SMA with the RSI in the oversold region, showing massive bearish momentum. Before the decline, bulls attempted to break above a strong resistance trendline. However, the price quickly reversed after making a bearish, engulfing candle. Consequently, this move turned out to be a false breakout, leading to a steep decline. The price broke below the 1.0800 key support and is now testing 1.0725. However, after such a strong move, it might pull back before continuing lower. https://www.forexcrunch.com/blog/2024/04/11/eur-usd-forecast-plummets-after-upbeat-us-cpi-eyes-on-ecb/

2024-04-10 12:07

The gold price remains bullish as long as it stays above 2,338. The US data should show sharp movements. Only a new higher high activates further growth. The gold price climbed as high as $2,365 in the last trading session, marking a fresh all-time high. The metal has now retreated a little and is trading at $2,345 at the time of writing. Today, anything could happen, as the economic calendar is filled with high-impact events. The RBNZ left the monetary policy unchanged, so the Official Cash Rate remained 5.50%. Later, the US Consumer Price Index could report a 0.3% growth in the last month versus a 0.4% growth in February. The CPI y/y may announce a 3.4% growth after a 3.2% growth reported in the previous reporting period, while the Core CPI is expected to register a 0.3% growth. Higher inflation could lift the greenback and punish the yellow metal. The volatility should be high before and after the US data dump. Furthermore, the FOMC Meeting Minutes and the BOC also represent high-impact events. The Bank of Canada should keep the Overnight Rate at 5.00%, but the FOMC minutes could change the sentiment. Technically, the XAU/USD found resistance at the weekly R1 of 2,364, and now it challenges the uptrend line, which is the flag’s support. It has dropped below this dynamic support, but the breakdown could still be invalidated. The bias remains bullish as long as it stays above the $2,338 former low. A new lower low, removing this downside obstacle, can activate more declines. On the other hand, false breakdowns may announce a new bullish momentum. Still, only a new higher high, a bullish closure above $2,365, activates further growth. https://www.forexcrunch.com/blog/2024/04/10/gold-price-maintains-up-bias-with-focus-on-us-cpi-fomc/

2024-04-10 11:56

Analysts expect the headline US inflation figure to have slowed to 0.3% in March. The likelihood of a Fed cut in June rose to 58%. Traders were preparing for the Bank of Canada policy meeting. The USD/CAD forecast horizon appears shrouded in bearish sentiment as the dollar weakens due to a surge in rate-cut bets ahead of the US inflation report. At the same time, the Canadian dollar strengthened due to an increase in oil prices. Investors were positioning themselves ahead of the US consumer inflation report. These figures will determine whether the Fed will cut interest rates in June. Analysts expect the headline figure to have slowed to 0.3% in March. Notably, rate-cut bets increased before the report, with the likelihood of a cut in June rising to 58%. This figure is up from 52% on Monday and shows that investors expect a slowdown in inflation. At the same time, markets now forecast 74 bps of cuts in 2024. On the other hand, the Canadian dollar was stronger on Wednesday as oil prices recovered. The deadlock in a Gaza ceasefire has caused a lot of worries about oil supply, pushing up prices. At the same time, traders were preparing for the Bank of Canada policy meeting later in the day. The BoC will likely hold rates at 5%. However, traders expect a more dovish meeting after recent economic data. Inflation in Canada has slowed down significantly. Similarly, the labor market has weakened, showing weaker economic demand. As a result, there is more pressure on the central bank to lower interest rates. Therefore, policymakers might signal the start of cuts in June. USD/CAD key events today US Consumer Price Index report BoC monetary policy meeting FOMC meeting minutes USD/CAD technical forecast: 30-SMA pauses decline to channel support On the technical side, the USD/CAD price has paused at the 30-SMA support. Similarly, the RSI has fallen to retest the pivotal 50 level. However, on a larger scale, the price is in a shallow uptrend that keeps chopping through the SMA. Furthermore, it trades in a bullish channel with clear support and resistance. Therefore, since the price recently touched the resistance, there is a high chance it will fall to retest the channel support. Consequently, bears might target the 1.3500 level. Still, the price must break below the SMA for this to happen. Otherwise, it might rise to a new high. https://www.forexcrunch.com/blog/2024/04/10/usd-cad-forecast-rate-cut-bets-surge-ahead-of-us-cpi/

2024-04-10 08:59

The US will release inflation data later today. UK data showed slower growth in starting salaries for permanent workers in March. Monetary policies in the UK and the US are converging. Excitement brews in GBP/USD price analysis as the pound gains ground in anticipation of pivotal US data. Investors are on the edge, awaiting the imminent US Consumer Price Index report. This eagerly anticipated release holds the potential to reshape perceptions regarding rate cuts in the US. The US will release inflation data later today that will give a clear picture of the state of price growth in the economy. Fed policymakers have monitored inflation over the past few months to see if it is on the path to 2%. A downtrend will give them enough confidence to settle on the first-rate cut’s timing. However, the last inflation report revealed that price growth had stalled. As a result, there is uncertainty about the outlook for interest rate cuts. Another unexpectedly hot report would likely further delay rate cuts and increase uncertainty. However, a decline would help policymakers decide the best time to start rate cuts. Meanwhile, in the UK, data on Monday showed slower growth in starting salaries for permanent workers in March. A drop in wage increases would allow inflation to drop to the 2% target. Consequently, the Bank of England would be more willing to cut interest rates. At the same time, investors are awaiting UK GDP data on Friday. Currently, monetary policies in the UK and the US are converging. This indicates that the Fed has become less dovish while the BoE is less hawkish. However, this might change with the incoming US inflation data. GBP/USD key events today US Core CPI m/m US CPI m/m US CPI y/y FOMC Meeting Minutes GBP/USD technical price analysis: Higher high solidifies bullish sentiment On the technical side, the GBP/USD price has fully confirmed the new bullish direction by making a higher high. Moreover, the price has broken above the 1.2650 key resistance level. The bullish bias is strong, with the 30-SMA facing up and the RSI above 50. Therefore, bulls will likely target the next resistance at the 1.2800 key level. However, the trend might be shallow because the price stays close to the 30-SMA. Still, bulls will maintain control if the price remains above the SMA. https://www.forexcrunch.com/blog/2024/04/10/gbp-usd-price-analysis-pound-edges-up-ahead-of-key-us-data/

2024-04-09 10:34

The bias remains bullish, so further growth is natural. Taking out the resistance levels activates further growth. The US data should bring sharp movements tomorrow. The EUR/USD price is struggling hard to resume its rally. The pair is trading at 1.0859 at the time of writing, below today’s high of 1.0865. The bias is overall bullish, so further upside remains possible as the US dollar is under downside pressure. Yesterday, the German Industrial Production and the Eurozone Sentix Investor Confidence came in better than expected, while the German Trade Balance was disappointed. Today, the US will release the RCM/TIPP Economic Optimism and the NFIB Small Business Index, but these are low-impact events. Still, the price could print strong moves ahead of the US inflation figures. The CPI m/m may report a 0.3% growth in March. CPI y/y is expected to register a 3.4% growth, while the Core CPI could announce a 0.3% growth. Stronger data should boost the USD as the FED could maintain the monetary policy unchanged in the next meetings. On the contrary, lower inflation may weaken the greenback. Also, the US will release the FOMC Meeting Minutes report, representing a high-impact event. Due to uncertainty, the EUR/USD pair could experience sharp movements in both directions. Technically, the EUR/USD price ended its temporary retreat. Now, it challenges the descending pitchfork’s upper median line (uml). This represents a dynamic resistance, so staying near indicates an imminent breakout. The former high of 1.0865 stands as a static resistance. Taking out the immediate resistance levels and making a new higher high may activate more declines. On the other hand, new false breakouts should precede a new sell-off, at least towards the weekly pivot point of 1.0812. https://www.forexcrunch.com/blog/2024/04/09/eur-usd-price-gains-lacking-momentum-ahead-of-us-cpi/

2024-04-09 10:30

Australia’s business conditions barely changed in March. Investors have scaled back Fed rate-cut expectations since the March employment report. Economists expect a decline in US inflation in March. The AUD/USD outlook looks up as the Aussie stands its ground following the latest data unveiling steady Australian business conditions in March. Meanwhile, the dollar was weak despite rising Treasury yields as investors cautiously awaited the US inflation report. Australia’s business conditions barely changed in March as higher interest rates pressured the economy. Moreover, sales and employment held steady. However, companies remained concerned about the economic outlook as the Reserve Bank of Australia is not looking to cut rates soon. At the moment, markets are expecting the first cut around November. Meanwhile, in the US, investors have scaled back rate-cut expectations since the March employment report revealed a still-hot labor market. Demand in the economy is still high. Therefore, any interest rate cuts by the Fed have to be timed well to avoid a spike in inflation. Consequently, there is doubt in the market whether the Fed will start cutting interest rates in June. Moreover, markets now only expect 60 basis points of rate cuts in 2024. The next major economic event in the US is the release of consumer inflation data. Economists expect a decline in inflation in March. However, these figures might also surprise to the upside. In such a case, rate-cut bets would decline further. Furthermore, investors would expect the first cut in July. AUD/USD key events today There are no key events from Australia or the US today. As a result, investors will keep speculating ahead of the US inflation report. AUD/USD technical outlook: Bulls aim for a higher high to confirm recent breakout On the technical side, the AUD/USD price is bullish as it trades above a recently broken trendline. The trend recently reversed to bullish when the price broke above a resistance trendline. Moreover, it pulled back to retest the trendline and is now climbing. Bulls must make a higher high above the 0.6620 critical resistance level to complete confirmation of the breakout. There is a high chance this will happen because the bullish bias is strong. The price sits far above the 30-SMA, and the RSI is in bullish territory above 50. Therefore, bulls might soon retest the 0.6660 key level. https://www.forexcrunch.com/blog/2024/04/09/aud-usd-outlook-aus-business-conditions-hold-ground-in-march/