2024-01-31 09:43

In the fourth quarter, inflation in Australia hit a two-year low, coming in at 0.6%. Market participants have placed an almost 50% chance of the first RBA rate cut in May. Traders are gearing up for the conclusion of the FOMC policy meeting. The AUD/USD forecast on Wednesday was bearish as inflation in Australia fell, increasing the likelihood of RBA rate cuts. However, the reaction to the report was little, with the currency recovering after an initial decline. In the fourth quarter, inflation in Australia hit a two-year low, coming in at 0.6% compared to expectations of 0.8%. This will play a significant role in the RBA’s policy meeting outcome next Tuesday. Market participants have placed an almost 50% chance of the first RBA rate cut in May. This is a significant increase from 30% before the inflation report. Meanwhile, in the US, traders are gearing up for the conclusion of the FOMC policy meeting. At the moment, traders expect the Fed to hold rates at the meeting and possibly give clues on the timing of rate cuts. Recent data from the US, including employment and GDP, have shown a resilient economy. The most recent report on job vacancies in the US came out on Tuesday. Job vacancies rose significantly, showing a robust labor market. Therefore, the Fed still has room to hold on to high interest rates. As a result, bets for a March rate cut have fallen significantly. Notably, interest rate futures show an almost 43% chance the Fed will cut rates starting in March. This is a big drop from the probability of 73% when the year began. AUD/USD key events today US private employment change Federal Funds Rate FOMC Statement FOMC Press Conference AUD/USD technical forecast: Price holds in a narrow range below 0.6625 On the charts, Aussie continues to trade in a tight range below the0.6625 key level. The price is below the 30-SMA within this tight range, meaning bears have the upper hand. Moreover, the RSI supports bearish momentum as it sits slightly below 50. If bears can keep the price below the 30-SMA, it might drop further to break out of consolidation. A strong break below the 0.6550 support would signal a continuation of the previous bearish trend. However, if bears fail to make a significant swing below 0.6550, it could be a second bottom for the downtrend. This would lead to a bullish reversal. https://www.forexcrunch.com/blog/2024/01/31/aud-usd-forecast-inflation-slide-signals-potential-rba-rate-cuts/

2024-01-31 08:24

The dollar is on track for its most significant monthly gain since September. Investors will closely watch for any hints from Fed Chair Jerome Powell regarding the possibility of a rate cut in March. Analysts predict that Canadian GDP will show a 0.1% increase in November. In today’s USD/CAD price analysis, the scales tilt slightly in favor of the bulls as the dollar edges higher in anticipation of the upcoming FOMC policy meeting. The greenback is gearing up for an impressive monthly surge, set to mark its most substantial gain since September. Meanwhile, Tuesday’s Canadian dollar reached a two-week high against its US counterpart. However, the gains were modest, occurring a day before domestic GDP data. According to Kyle Chapman, an FX markets analyst at Ballinger & Co in London, the Canadian currency has been influenced positively by rallying equities and improved sentiment throughout the week. However, it faced resistance at the 1.34 level. Notably, with the looming Fed decision and GDP data, traders have been cautious about pushing it higher. Markets expect the Fed to keep rates unchanged after its two-day policy meeting on Wednesday. Moreover, investors will closely watch for any hints from Fed Chair Jerome Powell regarding the possibility of a rate cut in March. Interest rate futures show a roughly 43% chance of a Fed rate cut in March. This is a decrease from 73% at the beginning of the year. Meanwhile, analysts predict that Canadian GDP will show a 0.1% increase in November. As the domestic economy slows, the Bank of Canada is now shifting its focus towards the timing of potential rate cuts. USD/CAD key events today US ADP Non-Farm Employment Change Canada GDP m/m Fed monetary policy meeting USD/CAD technical price analysis: Bears fight to reverse the trend On the technical side, the USD/CAD price has fallen to the 1.3400 support level as the bearish RSI divergence plays out. The bias is bearish, with the price under the 30-SMA and the RSI in bearish territory. Bears have taken over after the previous bullish trend paused at the 1.3525 resistance level. However, they are yet to find their footing below the 30-SMA. Moreover, to confirm a bearish trend, bears must start making lower lows and highs by breaking below the 1.3400 support level. However, if they fail to break below 1.3400, the price will likely climb to retest the 1.3525 resistance. https://www.forexcrunch.com/blog/2024/01/31/usd-cad-price-analysis-dollar-poised-for-significant-monthly-gain/

2024-01-30 11:28

XAU/USD is bullish as long as it stays above the lower median line. The US data should bring high action today. A new higher high activates further growth. The gold price extended its growth, reaching $2,040 today. Now, the precious metal has retreated a little and is trading at $2,035 at the time of writing. XAU/USD jumped higher as the US dollar dropped after reaching yesterday’s high of 103.82. Today, the US data should be decisive. The CB Consumer Confidence is expected to jump to 114.2 from 110.7 points, while JOLTS Job Openings may drop from 8.79M to 8.73M. Poor economic figures should weaken the greenback. On the contrary, positive data could punish the price of gold. Tomorrow, the Australian CPI q/q may report a 0.8% growth after a 1.2% growth in the previous reporting period, while CPI y/y is expected to register a 3.7% growth. Lower inflation could boost the XAU/USD. Furthermore, the US ADP-Non Farm Employment Change could drop from 164K to 145K, the Employment Cost Index could report a 1.0% growth, while Chicago PMI may jump to 47.9 points. Still, the most important event of the week is represented by the FOMC. The Federal Funds Rate should remain at 5.50% but the FOMC Press Conference and FOMC Statement should bring sharp movements. As you can see on the hourly chart, the price jumped above the downtrend line after retesting the lower median line (lml) of the ascending pitchfork, signaling an upside continuation. The bias is bullish in the short term as long as it stays above the lower median line (lml). In the short term, the rate could retest the broken downtrend line before extending its growth. A new higher high validates more gains ahead. Only failing to stay above the downtrend line may invalidate the upside scenario. https://www.forexcrunch.com/blog/2024/01/30/gold-price-breakout-needs-confirmation-fomc-eyed/

2024-01-30 10:29

Traders reduced the likelihood of the Fed lowering rates in March from 89% a month ago to 48%. Discussions among ECB policymakers on Monday revealed disagreements on the timing of rate cuts. Traders are fully pricing in an ECB rate cut in April. Tuesday’s EUR/USD price analysis revealed a bearish sentiment as investors braced for the possibility that the Fed might push back on expectations of an early rate cut. The Fed will end its policy meeting on Wednesday. Notably, the likelihood of the Fed lowering rates in March fell from 89% a month ago to 48% as the US economy remained robust. In contrast, there is a less favorable economic outlook for European countries, making the euro less attractive. Helen Given, an FX trader at Monex USA in Washington, remarked, “The macro picture in the US looks a lot better than the macro picture in European Union countries and the eurozone in general.” Tomorrow, investors will closely monitor comments from Fed Chairman Jerome Powell. Powell had indicated in December that the Fed is shifting towards a cycle of rate cuts. Meanwhile, the ECB kept interest rates at a record-high 4% on Thursday, emphasizing its commitment to fight inflation. Discussions among ECB policymakers on Monday revealed disagreements on the timing for potential rate cuts. ECB policymaker Peter Kazimir expressed in a blog post, “The next move will be a cut, and it is within our reach.” He emphasized that the precise timing, whether in April or June, is less important. Meanwhile, Mario Centeno, Portugal’s central bank governor, preferred earlier action, stating that it would enable the ECB to implement changes more gradually. Traders are now fully pricing in a move in April. EUR/USD key events today The US CB Consumer Confidence report The US JOLTS Job Openings report EUR/USD technical price analysis: Price reaches crucial 1.0800 support On the charts, the pair has finally touched the 1.0800 support level. However, the decline from the 1.0900 key resistance level was slow and shallow, indicating that bears had weakened. Moreover, weakness can be seen in the RSI, which has made higher lows while the price declines. Therefore, there is a bullish divergence that might lead to a reversal in the trend. For bulls to take over, the price must break above the 30-SMA and the 1.0900 to start making higher highs and lows. However, if the bearish bias persists, the price might break below the 1.0800 support. https://www.forexcrunch.com/blog/2024/01/30/eur-usd-price-analysis-feds-resistance-to-cut-bets-looms/

2024-01-30 09:59

Australia’s retail sales fell in December after a big surge the previous month. There is a 70% probability of an RBA rate cut in August. The US Department of Labor Statistics will release data on job openings later on Tuesday. Tuesday’s AUD/USD outlook leans towards a bearish tilt following the revelation of a dip in Australia’s retail sales for December, retracting from the previous month’s surge. As a result, this downturn has heightened investor confidence that the RBA is unlikely to implement a rate hike next week. Additionally, there is a 70% probability of an RBA rate cut in August. Meanwhile, investors are awaiting the highly anticipated four-quarter inflation report coming on Wednesday. Economists predict that headline consumer inflation might drop to a two-year low of 4.3%. On the other hand, the US dollar was mostly flat ahead of employment data and the Fed’s monetary policy decision tomorrow. Traders will look for insights into potential rate cuts by the US central bank. The US will release job openings data later on Tuesday, giving a preview of the upcoming payroll report on Friday. Meanwhile, tomorrow, the Fed will likely keep interest rates unchanged. However, everyone will focus on the messaging by Fed Chair Jerome Powell in Wednesday’s press conference. Markets are currently pricing in a 46.6% chance of the US central bank starting rate cuts in March, down from 73.4% a month ago. This shift came after data showed that the US economy remains resilient. AUD/USD key events today US CB Consumer Confidence US JOLTS Job Openings AUD/USD technical outlook: Price trades in a tight range On the technical side, AUD/USD is trapped in consolidation, with the nearest support at 0.6550 and the nearest resistance at 0.6625. The ranging market came after a strong bearish trend that failed to go below the 0.6550 support level. Consequently, the price pulled back to the 30-SMA. At this point, the price confirmed a range by chopping through the SMA. Similarly, the RSI started chopping through the pivotal 50 level. If this consolidation is a pause in the downtrend, then the price will likely soon break below the range support and the 0.6550 support level. On the other hand, the trend will reverse to bullish if the price breaks above the 0.6625 resistance level. https://www.forexcrunch.com/blog/2024/01/30/aud-usd-outlook-australias-sales-dip-following-nov-surge/

2024-01-29 14:31

The bias remains bullish as the DXY rallies. A new lower low activates a sell-off. The FOMC is seen as the most important event of the week. The USD/JPY price remains bullish despite minor retreats. The pair is trading at 147.98 at the time of writing and is struggling to extend its growth amid the dollar’s lack of conviction. The Greenback’s further growth should help the pair gain meaningful traction. The Japanese Tokyo Core CPI came in worse than expected on Friday, while SPPI matched expectations. On the other hand, the US Pending Home Sales and Personal Spending beat expectations, while Personal Income and Core PCE Price Index came in line with expectations. Today, the price could be driven by technical factors as we don’t have important economic events. Tomorrow, the Japanese Unemployment Rate could remain steady at 2.5%. The US is to release high-impact data, such as the CB Consumer Confidence which is expected to jump from 110.7 to 113.9 points, and the JOLTS Job Openings. The FOMC represents the most important event of the week. The FED is expected to retain the policy rates on Wednesday, but the FOMC Press Conference may trigger the volatility. From the technical point of view, the USD/JPY price turned to the upside in the short term, erasing some of the previous losses. Still, the rebound could be only temporary as the price could only retest the immediate supply zones or the resistance levels before going down. The pair remains trapped between the inside sliding lines (sl, sl1). Its failure to retest the median line (ml) announced exhausted buyers. The rebound may represent a flag pattern, signalling a new leg down. Coming back below the weekly pivot point of 147.82 and making a new lower low activates a new sell-off towards the sliding line (sl). https://www.forexcrunch.com/blog/2024/01/29/usd-jpy-price-wobbling-at-148-0-on-a-thin-trading-day/