2024-01-29 09:56
The Canadian dollar benefited from higher oil prices. USD/CAD recorded a weekly rise due to the Bank of Canada’s recent shift in guidance The Fed will announce its interest rate decision on Wednesday. Monday saw a bearish turn in the USD/CAD outlook, driven by the surge in oil prices triggered by a drone strike on US forces in Jordan. This event escalated worries about potential supply disruptions in the Middle East. Notably, the Canadian dollar benefits from higher oil prices because Canada is a net oil exporter. The pair saw a slight decline on Friday. However, it recorded a weekly gain. Investors digested the Bank of Canada’s recent shift in guidance, anticipating increased volatility for the Canadian dollar. Notably, Bank of Canada officials said they were considering when to cut borrowing costs rather than thinking of further rate hikes. In domestic data, a preliminary estimate revealed a 0.8% increase in Canada’s wholesale trade in December compared to November. Meanwhile, the Federal Reserve will announce its interest rate decision on Wednesday. December saw a marginal rise in US prices. However, the annual inflation increase stayed below 3% for the third consecutive month. This reinforced expectations that the Federal Reserve would initiate interest rate cuts this year. Still, the timing of the anticipated rate cut remains uncertain. Additionally, the Friday report indicated a surge in consumer spending at the end of 2023 as Americans indulged in goods and services during the holidays. USD/CAD key events today Investors do not expect key events from Canada or the US on Monday. As a result, investors will likely focus on developments in the Middle East. USD/CAD technical outlook: Bears strive to breach the 1.3425 support barrier On the charts, bears are attempting to breach the 1.3425 support level. This bearish move comes after the price made a double-top pattern and a bearish divergence. Meanwhile, the double top came when the bullish trend paused at the 1.3525 key resistance level. At the same time, the RSI confirmed that bulls were exhausted when it made a lower high. Consequently, bears took over by breaching the 30-SMA support line. However, the price must now break below the 1.3425 support level to make a lower low and confirm a bearish reversal. Otherwise, it will keep consolidating between the 1.3525 resistance and the 1.3425 support. https://www.forexcrunch.com/blog/2024/01/29/usd-cad-outlook-middle-east-tensions-lift-oil-price-loonie/
2024-01-29 08:33
Elevated geopolitical tensions in the Middle East dampened risk sentiment. Recent data indicated a moderate increase in US prices for December. The US Federal Reserve will most likely keep rates unchanged on Tuesday. Today’s EUR/USD forecast revealed a subtle bearish tilt. The dollar held steady as investors carefully evaluated crucial US economic data ahead of the eagerly anticipated Fed policy meeting. At the same time, an undercurrent of elevated geopolitical tensions in the Middle East dampened risk sentiment, further supporting the dollar. Recent data indicated a moderate increase in US prices for December, keeping the annual inflation rise below 3% for a third consecutive month. As a result, it reinforced the prevailing anticipation of potential rate cuts later in the year. Meanwhile, this week, investors will focus on the Fed’s two-day policy meeting starting on Tuesday. The central bank will most likely keep rates unchanged. Therefore, the focus will be on the comments of Fed Chair Jerome Powell. Elsewhere, traders bet heavily on Thursday that the ECB would start cutting rates in April. They believe policymakers are more comfortable with the inflation outlook. Notably, the ECB failed to mention that domestic price pressures remain elevated. As a result of this omission, markets believe that the ECB is increasingly convinced that inflation is slowing down. Meanwhile, a survey on Friday revealed that there will be a downturn in German consumer sentiment for February, as households remain concerned amid the economic uncertainty. This setback dashed any hopes of a recovery for Europe’s largest economy following a slight rebound at the beginning of the year. EUR/USD key events today It will likely be a slow day for the pair as no high-impact events are scheduled for today. EUR/USD technical forecast: RSI bullish divergence On the technical side, the bias for EUR/USD is bearish. The price has made lower lows and highs and is trading below the 30-SMA. At the same time, the RSI is below 50, indicating strong bearish momentum. Moreover, the price currently trades with the nearest resistance at 1.0900 and the nearest support at 1.0800. However, the current bearish move might be nearing its end as the RSI has made a bullish divergence. Therefore, the trend might reverse if bulls break above the 30-SMA and the 1.0900 resistance. https://www.forexcrunch.com/blog/2024/01/29/eur-usd-forecast-firm-dollar-casting-shadows-ahead-of-fomc/
2024-01-27 17:05
Traders pushed back bets for rate cuts in the UK and the US. US GDP figures came in higher than expected, indicating strong economic performance. Market participants expect the BoE to maintain rates next week. The GBP/USD weekly forecast is neutral as the resilience of both the US and UK economies creates a level playing field for the currency. Ups and downs of GBP/USD The pound ended the week flat, with the UK and the US economies showing resilience. Business activity in the manufacturing and services sectors for both countries rose. As a result, traders pushed back bets for rate cuts in the UK and the US. More data from the US supported the view that Fed rate cuts will not start in March. GDP figures came in higher than expected, indicating strong economic performance. Meanwhile, the Fed’s preferred inflation measure came in line with expectations. Next week’s key events for GBP/USD Next week, major reports from the US will include the FOMC meeting minutes, the ISM manufacturing PMI, and the employment report. Meanwhile, traders will pay close attention to the Bank of England policy meeting in the UK. On February 1, the BoE will likely maintain interest rates at 5.25%. At the same time, investors will closely monitor any indications regarding the timing of potential rate cuts. Meanwhile, there will be clues on possible Fed rate cuts in the FOMC meeting minutes and the NFP report. Another upbeat employment report could further reduce rate-cut bets, leading to a decline in the pair. The opposite is also true. GBP/USD weekly technical forecast: Bullish momentum weakens near 1.2800 The pound is consolidating in a tight range with support at 1.2600 and resistance at 1.2800. The bullish trend slowly weakened when the price neared 1.2800. The price started sticking close to the 22-SMA until it started chopping through the line. This indicates a shift from a trending to a ranging market. If this is a pause in the bullish trend, the price will eventually break above the range resistance to continue higher. However, there are indications that bears might take over. The RSI has made a bearish divergence with the price, showing weaker bullish momentum. Therefore, if bulls fail to regain momentum, bears might break below the range support to start a new downtrend. https://www.forexcrunch.com/blog/2024/01/27/gbp-usd-weekly-forecast-us-uk-economies-display-resilience/
2024-01-27 16:58
Business activity data showed expansion in the US manufacturing and services sectors. US GDP data came in higher than expected. Australia will release data on consumer inflation next week. The AUD/USD weekly forecast is bearish as the resilient US economy has shifted the outlook, prompting a decrease in expectations for Fed rate cuts. Ups and downs of AUD/USD Aussie had a bearish week as the dollar strengthened due to upbeat data from the US. Last week, the US released business activity data showing expansion in the manufacturing and services sectors. Moreover, GDP data came in higher than expected, showing resilience in the US economy. Additionally, this indicated that the Fed did not need to cut rates any time soon. As a result, the dollar strengthened, pushing AUD/USD lower. Meanwhile, the core PCE price index came in as expected. Next week’s key events for AUD/USD Australia will release data on consumer inflation next week. Meanwhile, the US will release figures on manufacturing and employment. Additionally, traders will get to review the Fed’s meeting minutes. This might give clues on what will come next for interest rates in the US. The last report on inflation in Australia showed a sharp decline to a two-year low. Consequently, investors became convinced that the RBA was done raising rates. Meanwhile, the crucial nonfarm payrolls report will show the state of the US labor market. A positive report might cause a drop in rate-cut bets and a rally in the dollar. AUD/USD weekly technical forecast: Solid support stalls bearish momentum On the charts, AUD/USD has fallen sharply after touching the 0.6850 resistance level. As a result, the bias has gone from bullish to bearish, with the price now trading below the 22-SMA. At the same time, the RSI has gone from trading near the overbought level to trading closer to the oversold region. However, the new bearish momentum has paused at a solid support zone. The price is struggling at the 0.5 fib retracement level and the 0.6550 key support level. Price action shows indecision at the support zone with small-bodied candles and big wicks. This indecision might lead to a pullback to the 22-SMA or a break below the support zone. Given the strong bearish bias, there is a bigger chance the price will break through the zone. If this happens, bears will be free to push the price lower to the 0.6351 support level. https://www.forexcrunch.com/blog/2024/01/27/aud-usd-weekly-forecast-us-economy-shows-resilience/
2024-01-26 13:02
The median line could attract the USD/CAD pair. The US economic data should be decisive today. Taking out the median line activates more declines. The USD/CAD price is trading in the red at 1.3450 at the time of writing. The pair seems determined to hit new lows as the US dollar weakens. The price jumped higher after the BOC as the Canadian central bank developed a dovish tone. On the other hand, the US manufacturing and services sectors confirmed expansion. –Are you interested to learn more about forex options trading? Check our detailed guide- The Canadian dollar retook the lead yesterday, even though the US reported mixed data while the ECB maintained its monetary policy. The US Advance GDP, New Home Sales, and Core Durable Goods Orders came in better than expected. At the same time, unemployment claims, the Advance GDP Price Index, durable goods orders, goods trade balance, and preliminary wholesale inventories are disappointing. Today, the US economic figures should move the markets again. The Core PCE Price Index may announce a 0.2% growth versus the 0.1% growth in the previous reporting period. Pending Home Sales is expected to report a 2.1% growth, exceeding the 0.0% growth during the last reporting period. Furthermore, the Personal Spending and Personal Income data will also be released. Positive economic data should help the USD to dominate the currency market. On the contrary, the Greenback could lose significant ground versus its rivals. From the technical point of view, the USD/CAD pair escaped from a significant up-channel pattern, indicating a potential corrective phase. The price tried to come back above the broken uptrend line but failed to stabilize beyond this dynamic obstacle, confirming exhausted buyers. -If you are interested in knowing about scalping forex brokers, then read our guidelines to get started- The upper median line (uml) retest confirmed I’ve drawn a descending pitchfork. So, the price could be attracted by the median line (ml), which acts like a magnet. Taking out this dynamic support opens the door for a more significant downside movement. Still, after the current sell-off, we cannot exclude a temporary rebound as the rate challenges a demand zone. https://www.forexcrunch.com/blog/2024/01/26/usd-cad-price-targeting-new-lows-core-pce-price-index-eyed/
2024-01-26 11:16
The pound recovered ahead of crucial US inflation data later in the day. The US economy beat forecasts in the fourth quarter, growing at 3.3%. The pound remains steady against the dollar amid signs of a recovery in the UK economy. On Friday, the GBP/USD price analysis hinted at a modest bullish tone as the pound staged a recovery ahead of pivotal US inflation data. The spotlight is on the US personal consumption expenditures data, the Federal Reserve’s preferred inflation gauge. –Are you interested to learn more about forex options trading? Check our detailed guide- Meanwhile, Thursday’s data indicated that the US economy beat forecasts in the fourth quarter, growing at 3.3%. Consequently, there was a rally in the dollar and a decline in the pound. The robust fourth-quarter economic performance, driven by strong consumer spending, eased recession concerns. The full-year growth stood at 2.5%. Moreover, the advance report on fourth-quarter gross domestic product revealed a further easing of inflation pressures. Despite the impressive year-end results, doubts about the Federal Reserve starting to cut rates in March persist. However, March remains a possibility due to the favorable inflation data within the GDP report. The pound remains steady against the dollar, supported by robust British business activity data earlier in the week. Furthermore, Goldman Sachs analysts noted that the UK’s growth momentum is improving, fueled by the consistent service sector expansion, setting the UK apart from the rest of Europe. In recent weeks, expectations of the ECB and the Fed to start rate cuts before the Bank of England has bolstered the pound. The BoE is scheduled for a meeting next Thursday. GBP/USD key events today The US Core PCE Price Index report GBP/USD technical price analysis: Bulls reemerge at channel support On the charts, the pound is trading in a bullish channel and is bouncing higher after respecting the channel support. The bullish channel is shallow because the price is still trapped in a range between the 1.2800 resistance and the 1.2600 support. For this reason, the price does not respect the 30-SMA as support or resistance. Similarly, the RSI keeps crossing the pivotal 50 mark, showing bears and bulls are battling for control. -If you are interested in knowing about scalping forex brokers, then read our guidelines to get started- Still, within the channel, the price seems to climb and retest the channel resistance. Such a move would also allow the bulls to retest the 1.2800 resistance. https://www.forexcrunch.com/blog/2024/01/26/gbp-usd-price-analysis-recovering-to-1-2750-ahead-of-us-pce/
