2024-03-13 10:43
A new lower low activates more declines. The median line (ml) is seen as a potential target. Tomorrow, the US data should bring high action. The EUR/USD price is trading in the red at 1.0922 at the time of writing. The pair faces resistance as the price corrects lower amid profit-taking. The US dollar turned to the upside. Yesterday, the fundamentals brought some volatility. The US CPI m/m rose 0.4% last month, matching expectations. The CPI y/y reported a 3.2% growth, beating the 3.1% growth estimated, while the Core CPI announced a 0.4% growth, exceeding the 0.3% growth expected. Higher inflation could force the Federal Reserve to maintain monetary policy. Today, Eurozone Industrial Production reported a 3.2% drop versus a 1.8% drop expected after a 1.6% growth in the previous reporting period, while the Italian Quarterly Unemployment Rate came in at 7.4% in Q4, above 7.3% expected but below 7.6% in Q3. The fundamentals should be decisive tomorrow as the US releases the PPI, Core PPI, Retail Sales, Core Retail Sales, and Unemployment Claims. Positive economic figures should boost the USD. As you can see on the hourly chart, the EUR/USD pair registered only a false breakout through the warning line (wl1), confirming buyers’ exhaustion. Now, it has turned to the downside and slipped below the upper median line (uml), representing dynamic support. The price retested this line, and now it looks under pressure again. Still, only dropping and stabilizing below the pivot point of 1.0916 and making a new lower low activates more declines. If the pair drops deeper, the ascending pitchfork’s median line (ml) is seen as a potential target. https://www.forexcrunch.com/blog/2024/03/13/eur-usd-price-may-plummet-as-us-reports-a-warm-inflation/
2024-03-13 10:24
The dollar strengthened on Tuesday after US inflation data beat forecasts. Annual US inflation rose by 3.2%. Oil fell on Tuesday after a higher-than-expected US oil production forecast. The USD/CAD price analysis reveals a subtle bullish tilt on Wednesday in response to the dollar’s resurgence after an upbeat inflation report. Simultaneously, the Canadian dollar is grappling with weakened strength amid a decline in oil prices. The dollar strengthened on Tuesday after US inflation data beat forecasts. Annual inflation rose by 3.2%, higher than economists forecast for a 3.1% increase. Meanwhile, the monthly figure rose by 0.4%. Consequently, there was a decline in rate cut expectations. Currently, there is a 67% likelihood of a rate cut at the June meeting. This is a decrease from 71% before the inflation report. The Fed will only be confident enough to start cutting rates when there is a consistent decline in inflation. However, if inflation remains stubbornly above the 2% target, it could lead to more delays in interest rate cuts. Investors will now wait to assess the US retail sales report, which shows the state of consumer spending. Retail sales have remained mostly resilient despite higher interest rates. Therefore, there is a chance this trend will continue. If it does, bets for a June cut might fall further. Meanwhile, the Canadian dollar weakened amid a decline in oil prices. Canada is a significant exporter of oil. Therefore, a decrease in oil prices leads to a weaker currency. Notably, oil fell on Tuesday after a higher-than-expected US oil production forecast. Higher production in the US leads to an increase in supply, which weighs on oil prices. USD/CAD key events today 30-year US Bond Auction USD/CAD technical price analysis: Pause after channel support retest On the technical side, USD/CAD has paused at the recently broken channel support. Bears and bulls are fighting for control at this level. However, there is a higher chance that bears will win because the indicators support a further decline in the pair. Notably, the 30-SMA is still facing down as bulls struggle to push the price higher. Meanwhile, the RSI trades slightly below 50 in bearish territory. If bears win the battle and make a lower low below the 1.3450 key support level, it will confirm the channel breakout and a new downtrend. Moreover, the price will likely fall to retest the 1.3375 support level. https://www.forexcrunch.com/blog/2024/03/13/usd-cad-price-analysis-strengthens-following-upbeat-cpi/
2024-03-12 12:11
XAU/USD escaped from an up channel, signaling an overbought situation. Taking out the pivot point activates more declines. The US inflation figures should shake the markets. The gold price climbed to $2,195 on Friday, registering a new all-time high. Now, the metal has retreated a little and is trading at $2,175 at the time of writing. The fundamentals should move today’s prices as the US releases the inflation figures. The Consumer Price Index is expected to report a 0.4% growth in February versus the estimated 0.3% growth so that CPI y/y could announce a 3.1% growth for the second month in February. Meanwhile, the Core CPI is expected to register a 0.3% growth after a 0.4% growth in January. Higher inflation should boost the greenback, as the FED should postpone a first rate cut. The Federal Reserve is expected to deliver a 75-bps cut this year. On the contrary, lower inflation should weaken the USD. Still, it remains to see how the yellow metal reacts as the price action signaled an overbought situation. XAU/USD turned to the downside ahead of the US figures. These should bring high volatility and sharp movements. Earlier, the UK reported mixed data. The Unemployment Rate jumped from 3.8% to 3.9% even if the specialists expected the rate to stay at 3.8%, Average Hourly Earnings reported a 5.6% growth, less versus the 5.7% growth estimated, while Claimant Count Change came in at 16.8K points, above the 20.3K forecasts. The XAU/USD climbed toward new highs within an up-channel pattern. The price dropped below the uptrend line, signaling exhausted buyers and an overbought. The yellow metal tested the broken uptrend line (channel’s support) and seems determined to print a corrective phase. The weekly pivot point of $2,151 is a potential downside target and obstacle. A larger downside movement could be activated only after making a valid breakdown through this support. https://www.forexcrunch.com/blog/2024/03/12/gold-price-shows-overbought-signs-ahead-of-us-cpi/
2024-03-12 10:12
British wages minus bonuses grew much slower than expected. Investors expect a bigger 74bps of cuts by the BoE this year. Investors are preparing to receive the US CPI report showing the state of consumer inflation. This Tuesday, the GBP/USD price analysis takes a bearish turn as soft UK labor market data fuels BoE rate cut bets. Meanwhile, the dollar held steady ahead of the US Consumer Price Index (CPI) report, impacting the Fed’s rate cut decision. Notably, data on Tuesday revealed that British wages minus bonuses grew much slower than expected in the three months to January. At the same time, the unemployment rate unexpectedly increased. This report raised hopes that the Bank of England will start cutting rates this year. As a result, the pound slipped, pulling back sharply from recent highs. The recent rally in the pound came as traders gained confidence that the Fed would cut rates ahead of the BoE. Markets believe the BoE will be among the last major banks to cut rates. As a result, the pound has strengthened due to the divergence in policy outlooks. However, after the jobs data, investors expect a bigger 74bps of cuts by the BoE this year. This increase from 67bps before the data brings it closer to the Fed’s 75bps of cuts. This means that the pound is losing some of its edge. At the same time, investors are preparing to receive the US CPI report showing the state of consumer inflation. A higher-than-expected figure could lower Fed rate cut expectations. Meanwhile, a decline in inflation might raise rate-cut bets. GBP/USD key events today US Core CPI m/m US CPI m/m US CPI y/y GBP/USD technical price analysis: Bears challenge uptrend at the 30-SMA support On the charts, the pound has fallen to the 30-SMA after failing to trade above the 1.2850 resistance level. Meanwhile, the RSI has broken below 50, showing a shift in sentiment to bearish. With stronger bearish momentum, the price will likely soon break below the 30-SMA to retest the 1.2750 support level. However, the price must break below 1.2750 to confirm a bearish reversal and make lower highs and lows. Still, the bullish trend will continue if the price fails to break below the 30-SMA or the 1.2750. The bulls might make a new high at the 1.2900 key psychological level if they regain momentum. https://www.forexcrunch.com/blog/2024/03/12/gbp-usd-price-analysis-boe-cut-odds-rise-after-weak-uk-data/
2024-03-12 08:43
Economists expect a monthly increase of 0.3% in US consumer inflation. Data on Friday revealed a softer US labor market. Markets expect the first ECB rate cut in June. The EUR/USD outlook is mildly bullish on Tuesday morning, setting a positive tone ahead of the highly anticipated US inflation report. Adding fuel to the euro’s momentum, Peter Kazimir, Chief of Slovakia’s Central Bank, said the ECB should hold off on rate cuts until they have enough economic data. The US inflation report will give more clues on when the Fed might start cutting interest rates. Economists expect a monthly increase of 0.3% in US consumer inflation. However, the focus will be whether the report will beat or miss forecasts. A higher-than-expected reading could mean more delays on Fed rate cuts. Consequently, the dollar would rise, pushing EUR/USD lower. Meanwhile, a lower-than-expected reading would increase rate-cut bets, pressuring the dollar and boosting EUR/USD. Currently, traders are more convinced that the Fed will cut rates in June. This confidence came after Powell’s dovish testimony. Notably, he said there was progress on inflation, making a rate cut more likely. Additionally, data on Friday revealed a softer labor market, with the unemployment rate higher than expected. This will allow the Fed to start lowering interest rates in the second half of the year. Meanwhile, inflation is declining in the Eurozone, and the ECB is gaining confidence in the progress. As a result, markets expect the first cut in June. On Monday, Peter Kazimir noted that the ECB had done a lot to lower inflation. However, he emphasised the need for patience before cutting rates. EUR/USD key events today US Core CPI m/m US CPI m/m US CPI y/y EUR/USD technical outlook: Bulls stalled by 1.0950 On the technical side, the bias for EUR/USD is bullish as the price trades above the 30-SMA, and the RSI is above 50 in bullish territory. At the same time, the price is trading in a bullish channel. It bounces higher each time it hits the channel support. However, the bullish move has paused after reaching the channel resistance and the 1.0950 key level. If this resistance zone holds firm, the price will likely fall to retest the channel support before the uptrend continues. However, the price will continue to rise if it breaks above 1.0950. https://www.forexcrunch.com/blog/2024/03/12/eur-usd-outlook-stable-above-1-09-as-markets-await-us-cpi/
2024-03-11 14:23
The bias remains bullish despite temporary retreats. The US inflation should move the markets tomorrow. Failing to stay above the upper median line signaled exhausted buyers. The GBP/USD price turned to the downside after reaching a high of 1.2893 on Friday. The pair is trading at 1.2820 at the time of writing. The pair is correcting gains after a massive bull run. Fundamentally, the US reported mixed data in the last trading session. The NFP came in at 275K in February, versus 198K expected and above 229K in the last reporting period. However, the unemployment rate jumped from 3.7% to 3.9%, while average hourly earnings rose by 0.1%, less than the estimated growth of 0.2%. Today, the technicals could move the price. Meanwhile, the fundamentals should bring high action again tomorrow. The United Kingdom claimant count change is expected at 20.3K, above 14.1K in the previous reporting period. The unemployment rate should remain at 3.8%, while the average hourly earnings indicator may announce a growth of 5.7%. Still, the US inflation data publication represents the most important event of the current week. The CPI m/m may announce a 0.4% growth in February versus a 0.3% growth in January. CPI y/y could remain at 3.1%, while Core CPI may report a 0.3% growth. Higher inflation could boost the greenback. Technically, the GBP/USD price jumped above the ascending pitchfork’s upper median line (uml) but failed to stay above this dynamic resistance, signaling exhausted buyers. The pair tried to retest this upside obstacle, and now it could approach the 1.2800 former resistance that turned into support. The weekly pivot point of 1.2780 is also seen as a potential downside target. Failing to take out the upper median line (uml) may result in a correction towards the median line (ml), which is a critical downside obstacle. The bias remains bullish as long as it stays above it. https://www.forexcrunch.com/blog/2024/03/11/gbp-usd-price-corrects-gains-after-mixed-us-nfp-data/
