2024-03-15 10:38
US wholesale inflation rose 0.6% in February. Investors have scaled back bets for a Fed rate cut in June. The RBA will likely hold rates at next week’s meeting. The AUD/USD price analysis paints a bearish picture on Friday amidst the dollar’s continued surge following a significant spike in US wholesale inflation. Meanwhile, a Reuters poll of economists revealed that the RBA will likely hold rates at next week’s meeting. The dollar surged on Thursday after the US released the Producer Price Index (PPI) report. Wholesale inflation rose 0.6% in February, according to estimates for a 0.3% increase. There are fears that US inflation is picking up as consumer prices also rose more than expected. Consequently, investors have scaled back bets for a rate cut in June. However, there is a lot of uncertainty in the market. Notably, the economy is showing signs of slowing down. Retail sales missed forecasts, showing there was weaker consumer spending. Meanwhile, unemployment in the US jumped in February, showing a weaker labor market. With inflation high and the economy slowing down, markets will wait for guidance from Fed policymakers on rate cuts. This might come next week, when the central bank will make its policy decision. The outcome of the meeting will likely be a hold on interest rates. Meanwhile, in Australia, there is no clear outlook on rate cuts as the RBA has remained hawkish. While the Fed might start cutting rates in June, economists expect the first RBA cut in September. However, there is still no clear majority. Still, markets believe the central bank is done with hikes and will hold rates on Tuesday. AUD/USD key events today US Empire State Manufacturing Index US consumer sentiment AUD/USD technical price analysis: Plunges as 0.6600 level gives way On the charts, AUD/USD is in freefall after breaking below the 30-SMA and the 0.6600 key support level. The price has fallen far below the 30-SMA, showing a steep decline. At the same time, the RSI is nearly oversold, a sign that bearish momentum is strong. The price reversed when it failed to go beyond the 0.6650 key level. Moreover, there was a big doji candle at the level showing indecision. The price made a strong bearish candle after the doji, showing bears were ready to take over. Therefore, the decline will likely reach the 0.6500 key support level and the shallow trendline support. https://www.forexcrunch.com/blog/2024/03/15/aud-usd-price-analysis-dollar-strengthens-rba-set-to-hold/
2024-03-15 08:39
Producer prices rose 0.6%, beating estimates of a 0.3% increase. US retail sales missed forecasts, showing a slowdown in consumer spending. The yen was steady as investors awaited the final results of the wage negotiations. The USD/JPY outlook shows a bullish wave today ignited by the dollar’s surge following encouraging wholesale inflation figures. However, there was a slight pullback as investors took profits ahead of policy meetings in the US and Japan. Notably, US wholesale inflation rose more than expected in February, leading to a drop in rate cut expectations. Producer prices rose 0.6%, beating estimates of a 0.3% increase. This was the second inflation report in the week that showed inflation in the US remains high. Other data from the US included weekly jobless claims, which fell, indicating tight labor market conditions. Additionally, US retail sales missed forecasts, showing a slowdown in consumer spending. Despite the mixed data, there was a decline in rate cut expectations as investors focused on inflation. Next week, the Fed will meet to decide on interest rates. Markets expect the Fed to hold current rates. Moreover, traders will focus on what policymakers will say regarding the outlook for rate cuts, especially after the recent inflation reports. Meanwhile, the yen was steady on Friday as investors awaited the final results of the wage negotiations. So far, most major companies in Japan have agreed to pay increases. Therefore, there is a high chance that the Bank of Japan will be ready to shift policy next week. Such a move would greatly boost the yen. USD/JPY key events today US Empire State Manufacturing Index US preliminary UoM consumer sentiment USD/JPY technical outlook: Bulls above strong resistance On the technical side, the USD/JPY pair has broken above the 148.01 key resistance level and the 0.382 Fib level. Moreover, the bias is bullish as the price trades above the 30-SMA while the RSI is above 50. The recent shift in sentiment came when the price found support at the 146.51 key level. Bulls took over control when the price broke above the 30-SMA resistance. At the moment, the price is retracing the previous bearish move and might soon reach the 0.618 Fib level. However, the price might consolidate as the SMA catches up before continuing higher. https://www.forexcrunch.com/blog/2024/03/15/usd-jpy-outlook-upbeat-us-wholesale-inflation-lends-support/
2024-03-14 10:02
The Canadian dollar strengthened after a massive surge in oil prices on Wednesday. The EIA reported a higher-than-expected draw in crude inventories last week. Traders expect US data on wholesale inflation, retail sales, and initial jobless claims. The USD/CAD outlook is dim on Thursday as the Canadian dollar gains momentum, riding high on a substantial oil price surge from the previous session. Meanwhile, the US dollar treads cautiously as investors brace for crucial economic data USD/CAD traded near lows hit on Wednesday as oil prices rallied. Notably, the rally in oil prices came after the EIA reported a higher-than-expected draw in crude inventories last week. At the same time, gasoline stocks had a bigger-than-expected decline, showing increasing demand. At the same time, the Canadian dollar remains strong amid a robust economy and slightly hawkish policymakers. Last week, the Bank of Canada held rates and said it was too early to consider rate cuts. Meanwhile, other major central banks, including the Fed, are inching closer to rate cuts. Additionally, employment data from Canada revealed a robust labor market that will give the BoC enough room to hold higher interest rates. Investors are now expecting data on manufacturing sales. This might give more clues on the state of the economy. Meanwhile, the dollar was range-bound as traders stayed on the sidelines ahead of key economic data. Bets for a June Fed rate cut have fallen from 71% to 65%. Notably, recent data has had little impact on the outlook for Fed policy. The US has released mixed data showing a weaker labor market and still high inflation. Currently, traders are awaiting data on wholesale inflation, retail sales, and initial jobless claims. These reports might change the outlook for Fed policy ahead of next week’s Fed meeting. USD/CAD key events today US retail sales US wholesale inflation US jobless claims USD/CAD technical outlook: Price reverses after retesting channel support. On the charts, USD/CAD is bouncing lower after retesting the recently broken channel support. At the same time, the price retested and respected the 30-SMA resistance. Meanwhile, the RSI has stayed below the pivotal 50 level, showing solid bearish momentum. However, bears have yet to confirm the recent channel breakout. They must push below the 1.3450 key support level to make a lower low to do this. If this happens, the price will likely retest the 1.3375 support level and start a downtrend. https://www.forexcrunch.com/blog/2024/03/14/usd-cad-outlook-loonie-strengthens-following-oil-price-surge/
2024-03-14 09:58
The US data should move the rate today. Taking out the pivot point activates a larger drop. The median line could attract the price. The gold price turned to the downside and is trading at $2,168 at the time of writing. The US dollar’s rebound weighed down the precious metal. However, the bias remains bullish despite minor retreats. A larger correction is far from being confirmed. The US reported higher inflation in February, but the price of gold changed little, as the USD seemed undecided. Today, the fundamentals should be decisive again. The US is to release high-impact data. Retail sales are expected to announce a growth of 0.8% after the drop of 0.8% in the previous reporting period, while core retail sales could register a growth of 0.5%. Furthermore, the PPI may report a 0.3% growth for the second month in February. Core PPI could register a 0.2% growth in the last month versus the 0.5% growth in January, while the Unemployment Claims indicator is expected to be at 218K in the last week. Positive US data should lift the greenback and could push the XAU/USD down again. From a technical point of view, the XAU/USD moves sideways in the short term. Escaping from the up-channel pattern, the price signaled a potential corrective phase. Still, the outlook remains bullish as long as it stays above the weekly pivot point of $2,151. After the last drop, a minor rebound was in the cards as the metal needed to retest the new supply zone before going down. I’ve drawn a descending pitchfork, so gold could slip lower if it stays below the upper median line (uml). The median line (ml) could attract the price if it stays within the pitchfork’s body. However, a larger downside movement could be activated only after a valid breakdown below the pivot point (2,151) and through the median line (ml). https://www.forexcrunch.com/blog/2024/03/14/gold-price-loses-strength-us-retail-sales-ppi-in-focus/
2024-03-14 08:40
Data on Wednesday showed that the UK economy grew at a rate of 0.2% in January. Market participants expect the first BoE cut in June. Investors are awaiting the US Producer Price Index (PPI) report. Today’s GBP/USD forecast is slightly bullish after UK data revealed economic growth in January following a brief recession. Meanwhile, investors remained cautious ahead of more high-impact economic data from the US. Data on Wednesday showed that the UK economy grew at a rate of 0.2% in January. This came after a decline in the previous month. However, despite this positive report, rate-cut bets remained steady, with market participants now expecting the first BoE cut in June. Consequently, the pound barely rose. Notably, the shift in expectations for the first rate cut from August to June came after the UK’s recent jobs report. The employment report revealed weakness in the labor market with a surge in the unemployment rate. As a result, traders now believe the Bank of England will cut rates sooner. Previously, the pound had risen on the view that the BoE would be among the last major central banks to cut rates. However, that view has changed, making the pound vulnerable. Meanwhile, the dollar held steady ahead of more inflation data from the US. Investors are awaiting the Producer Price Index (PPI) report later today. A higher-than-expected value could strengthen the dollar, as it would likely lead to a decline in rate cut expectations. Additionally, the US will release data on retail sales, showing the state of consumer spending. GBP/USD key events today US Producer Price Index report US retail sales report US unemployment claims report GBP/USD technical forecast: Price falls below 30-SMA, threatening uptrend On the technical side, GBP/USD has broken below the 30-SMA, showing bears are challenging the bullish trend. However, bulls still maintain control as the price sticks close to the 30-SMA. At the same time, the RSI is above 50, showing bullish momentum remains strong. If bears cannot detach from the SMA, the price will likely push back above the SMA to retest the 1.2850 resistance level. Moreover, a break above 1.2850 would allow bulls to retest the 1.2900 psychological level. Consequently, the price would make a higher high, continuing the bullish trend. However, if bears take over, it will fall to retest the 1.2750 support. https://www.forexcrunch.com/blog/2024/03/14/gbp-usd-forecast-pound-recovers-on-positive-economic-growth/
2024-03-13 11:49
The US released a report on inflation showing a higher-than-expected annual figure. Toyota announced the biggest pay increase for its workers in 25 years. Ueda said Japan’s economy was recovering, but there were pockets of weakness. The USD/JPY forecast revealed a bullish sentiment as the dollar stood resilient after a surprising US inflation report. Meanwhile, the yen remained weak despite substantial pay hikes in Japan. On Tuesday, the US released a report on inflation showing a higher-than-expected annual figure. Consequently, there were doubts about whether the Fed would cut rates in June. If inflation fails to show a downtrend to the 2% target, the Fed might choose to keep interest rates high. Consequently, the dollar would remain strong. However, the outlook for rate cuts remains uncertain because the jobs report revealed weaker demand in the labor market. As a result, rate-cut bets went up. Additionally, Powell sounded more dovish in his testimony last week. However, the inflation report tells a different story. This confusion can also be seen in rate-cut bets, which only fell slightly after the inflation report. Ideally, such an upbeat report would have led to a bigger decline in rate cut expectations. On the other hand, the yen remained weak on Wednesday despite positive wage news. Notably, Toyota announced the biggest pay increase for its workers in 25 years. This is bullish for the yen, as it paves the way for the BoJ to start hiking interest rates as soon as this month. However, on Tuesday, BoJ governor Kazuo Ueda said the economy was recovering, but there were pockets of weakness. This was a poorer assessment than he gave in January, which weighed on the yen. USD/JPY key events today 30-year US Bond Auction USD/JPY technical forecast: Rebound faces strong resistance zone On the technical side, the USD/JPY pair is recovering after a recent decline to the 146.51 key level. Bulls have managed to break above the 30-SMA resistance, showing a shift in sentiment to bullish. At the same time, the RSI has crossed above 50 into bullish territory, showing stronger bullish momentum. However, the price also faces a strong resistance zone comprising the 0.382 Fib retracement and the 148.01 key level. A break above this zone would confirm a bullish reversal. However, if the price reverses to retest the 146.51 support level, the previous decline will continue lower. https://www.forexcrunch.com/blog/2024/03/13/usd-jpy-forecast-dollar-holds-firm-after-inflation-yen-weakens/
