2024-01-24 08:31

Eurozone consumer confidence fell in January. The ECB will likely pause interest rate hikes in the upcoming meeting. Investors will scrutinize ECB chief Christine Lagarde’s press conference for indications of the future direction of rates. Wednesday witnessed a slight bullish tilt in the EUR/USD price analysis ahead of the pivotal European Central Bank rate decision. Additionally, investors were awaiting key PMI data from the Eurozone and the US. -Are you interested in learning about the forex signals telegram group? Click here for details- On Thursday, investors will focus on the ECB chief Christine Lagarde’s press conference, seeking crucial clues about the future trajectory of interest rates. There’s a consensus that the ECB will likely pause interest rate hikes in the upcoming meeting. However, traders foresee potential cuts totaling approximately 130 basis points throughout the year. Moreover, the likelihood of the first cut in June is nearly 97%. Elsewhere, data released on Tuesday revealed a decline in Eurozone consumer confidence for January compared to December. Meanwhile, the dollar pulled back slightly but remained firm due to the Fed’s cautious approach towards interest rate cuts. In her last remarks before the January 31 policy decision blackout period, San Francisco Fed President Mary Daly stated that monetary policy is in a “good place,” and it’s premature to expect imminent rate cuts. Similarly, Fed Governor Christopher Waller emphasized a “careful and slow” approach to rate cuts. James Kniveton, senior corporate FX dealer at Convera, noted that markets no longer expect imminent rate cuts, which is supporting the dollar. This trend aligns with a broader resistance to rate cuts among major central banks. Kniveton added, “We have seen ECB officials push back on rate cut expectations as well, just like the Federal Reserve.” EUR/USD key events today German flash manufacturing and services PMI US flash manufacturing and services PMI EUR/USD technical price analysis: Price edges closer to crucial 1.0800 support On the technical side, EUR/USD has made a lower low after respecting the 1.0900 key resistance level. Consequently, the price is getting closer to retesting the 1.0800 support level. After breaking below 1.0900, the price lingered near the level, pulling back every time bears tried to push it lower. However, a significant decline came when the price made a bearish engulfing candle at the 1.0900 level. Currently, the price is rebounding and might retest the 30-SMA as resistance. If the SMA holds firm, EUR/USD could soon touch the 1.0800 support. https://www.forexcrunch.com/blog/2024/01/24/eur-usd-price-analysis-euro-rises-on-eve-of-ecb-rate-decision/

2024-01-23 11:26

The EUR/USD pair could jump higher if it stays above the lower median line. The Eurozone and the US data should move the rate tomorrow. Taking out the lower median line invalidates the upside scenario. Today’s EUR/USD price climbed to mark a new high near 1.0915. The pair has dropped slightly and is at 1.0870 as the US dollar again gained traction. -Are you interested in learning about the forex signals telegram group? Click here for details- In the short term, the downside pressure remains high as the US dollar showed overbought signs despite positive US data lately. Yesterday, the CB Leading Index reported a 0.1% drop versus the 0.3% drop expected after the 0.5% drop in the previous reporting period. Today, the BOJ maintained the monetary policy as expected and had a minor impact on the EUR/USD pair. The Eurozone Consumer Confidence is expected at -14 points versus -15 points in the previous reporting period. In addition, the US is to release the Richmond Manufacturing Index, which may jump from -11 points to -7 points. The fundamentals should be decisive tomorrow as the US and Eurozone release the manufacturing and services data. The Eurozone services and manufacturing sectors could remain in the contraction territory. Also, the Bank of Canada is expected to keep the Overnight Rate at 5.00%. The EUR/USD pair validated its breakout through the downtrend line and jumped above the weekly pivot point of 1.0903, but it has failed to stay above it. Now, it could retest the immediate demand zones. The broken downtrend and lower median lines (LML) represent key downside obstacles. The rate could rise towards new highs if it stays above these lines. Technically, the price could be attracted by the median line (ml). The upside scenario could be invalidated if the price takes out the lower median line (LML). https://www.forexcrunch.com/blog/2024/01/23/eur-usd-price-retraces-below-1-09-eying-consumer-confidence/

2024-01-23 09:47

The BoJ decided to maintain its ultra-easy monetary settings. There is a growing likelihood of Japan achieving the bank’s 2% inflation target sustainably. Japan’s spring wage increases might exceed last year’s 30-year high of 3.58%. The USD/JPY price analysis on Tuesday displayed a bearish tone as the Japanese yen changed its course, gaining strength. The momentum was fueled by hints suggesting that the Bank of Japan could make policy adjustments in its upcoming meeting. -Are you interested in learning about the forex signals telegram group? Click here for details- Earlier, the yen had weakened following the central bank’s policy decision. Notably, the Bank of Japan held its ultra-easy monetary policy. However, it indicated an increasing belief that the conditions for gradually withdrawing its extensive stimulus were aligning. Therefore, the prospect of ending negative interest rates is approaching. BOJ Governor Kazuo Ueda mentioned that many businesses had already set wages, and labor unions were advocating for higher pay. Moreover, he expressed a growing likelihood of Japan achieving the bank’s 2% inflation target sustainably. This is due to recent steady increases in service prices. Market players expect the Bank of Japan to end negative rates sometime this year. Meanwhile, a Reuters poll indicates that such a move might come in April. However, Ueda emphasized the importance of delaying rate hikes until there is evidence that inflation will stay around 2% and there will be robust wage growth. Surveys and statements from business lobbies show a growing likelihood that Japan’s spring wage increases will exceed last year’s 30-year high of 3.58% for major firms. This is what the BoJ needs to start transitioning away from ultra-loose monetary policy. USD/JPY key events today The BOJ Press Conference USD/JPY technical price analysis: 30-SMA breach marks shift in sentiment On the charts, there has been a shift in sentiment from bullish to bearish as the price has broken below the 30-SMA. At the same time, the RSI has crossed into bearish territory. However, to confirm this shift, the price must close below the SMA. The first sign that bulls were ready to give up control came when the RSI made a bearish divergence. The price made a new high above the 148.02 resistance level, but bullish momentum was weaker. At the same time, bears showed strength when they made an engulfing candle, pushing the price back below 148.02. A reversal will allow bears to retest support levels at 146.01 and 144.00. https://www.forexcrunch.com/blog/2024/01/23/usd-jpy-price-analysis-yen-gains-amid-bojs-policy-shift/

2024-01-23 08:34

Investors assessed the possibility of a more dovish stance from the Bank of Canada. The Bank of Canada will likely hold its key overnight rate at a 22-year high of 5% on Wednesday. Money markets expect a 25 basis point cut by June. Tuesday’s USD/CAD outlook displayed a bullish stance, with the pair lingering close to the highs achieved on Monday. Investors assessed the possibility of a more dovish stance than expected from the Bank of Canada in its policy meeting on Wednesday. -Are you interested in learning about the forex signals telegram group? Click here for details- The Bank of Canada will likely hold its key overnight rate at a 22-year high of 5% on Wednesday. However, investors will focus on the release of updated forecasts on inflation and economic growth. If the central bank revises lower its growth projections, there is a chance the market will anticipate earlier interest rate cuts. However, there is still a chance rate cuts will be delayed. After three consecutive months of prices either declining or remaining flat year-over-year, headline inflation in December rose to 3.4% from 3.1%. Additionally, core inflation exceeded expectations. This shift prompted money markets to delay their expectations. Currently, money markets expect a 25 basis point cut by June. However, the likelihood of a similar cut in April has decreased from 100% before the December inflation data to 70%. Economists predict that inflation in Canada will stay more persistent compared to the US. Therefore, the Bank of Canada will likely lag behind the Fed in implementing the first rate cut this year. USD/CAD key events today There won’t be any key releases from Canada or the US today. Therefore, investors will anticipate the BoC policy meeting tomorrow. USD/CAD technical outlook: Price retests 30-SMA On the technical side, USD/CAD has pulled back to retest the 30-SMA resistance after bears took control. Buyers gave up control after failing to keep the price above the 1.3501 key resistance level. The shift in sentiment came when the price broke below the 30-SMA and the RSI went below 50. And now, the price is confirming this new direction by retesting the recently broken SMA. Further confirmation will come when the price makes a lower low. Currently, the price is poised to drop to the 1.3401 support level which coincides with the 0.382 fib retracement level. The downtrend will continue if the price breaches this support zone to retest the 1.3300 key level. https://www.forexcrunch.com/blog/2024/01/23/usd-cad-outlook-investors-brace-for-the-boc-meeting/

2024-01-22 15:07

The bias is bullish as long as it stays above the lower median line (lml). A new lower low invalidates the upside scenario. The BOJ could change the sentiment tomorrow. The gold price is trading in the green at $2,027 at the time of writing. The metal seems determined to hit new highs as the US dollar retreated. Greenback’s depreciation should help the XAU/USD buyers to take it higher. -Are you interested in learning about the forex signals telegram group? Click here for details- After the last rally, a minor correction was highly probable. On Friday, the US Prelim UoM Consumer Sentiment came in better than expected, while Existing Home Sales and Prelim UoM Inflation Expectations disappointed. Today, the US will release the CB Leading Index, expected to report a 0.3% drop after a 0.5% drop in the previous reporting period. The Bank of Japan can shake the markets tomorrow even if the BOJ Policy Rate remains at 0.10%. The BOJ Press Conference, Monetary Policy Statement, and BOJ Outlook Report could change the short-term sentiment. Also, the New Zealand Consumer Price Index and the US Richmond Manufacturing Index could have an impact. Furthermore, the BOC and the manufacturing and services data should move the rate on Wednesday, while the ECB and the US Advance GDP are seen as high-impact events on Thursday. Technically, the XAU/USD found support on the lower median line (LML) of the ascending pitchfork, and now it has turned to the upside. The retreat was expected, but the price registered only false breakdowns below the lower median line, and the former low of $2,020, signaling exhausted sellers already. The price action developed a flag pattern, which represents a bullish formation. The metal could develop a strong upward movement if it stays inside the ascending pitchfork’s body. Still, only a new higher high, jumping and closing above the former high of $2,032, validates further growth. On the contrary, a new lower low may invalidate the upside scenario and bring new shorts. https://www.forexcrunch.com/blog/2024/01/22/gold-price-looks-exhausted-above-2020-eyes-on-key-data/

2024-01-22 09:37

ECB policymakers are acknowledging an eventual rate cut. Market analysts foresee five ECB cuts in the coming year. J.P. Morgan now expects the ECB to start rate cuts earlier in June. Monday’s EUR/USD outlook leaned towards a modest bearish stance, with investors positioning themselves ahead of the ECB meeting later this week. As the ECB policy meeting approaches, the discussion has shifted among policymakers, acknowledging an eventual rate cut. Still, they expect it later and to a lesser extent than anticipated by the markets. -Are you interested in learning about the forex signals telegram group? Click here for details- Market analysts challenge the ECB’s inflation outlook, foreseeing five cuts in the coming year. According to NatWest Markets, some believe the balance of risks leans toward a dovish ECB stance. On Friday, JP Morgan revised its forecast for the ECB to start interest-rate cuts, moving the anticipated start from September to June. However, it maintained a “cautious” stance on inflation and wage growth trends. Moreover, JP Morgan predicts 100 basis points in rate cuts by the year’s end. This is an increase from the last expectation of 75 bps. Meanwhile, the dollar struggled to hold its gains. The dollar’s rally has been uncertain throughout the year as investors struggle to determine when the Fed will start rate cuts. Recently, data revealing resilient US economic activity led to a reassessment of rate cut expectations. Markets pushed the potential start date from March to May. However, a 100 basis point gap exists between market expectations and the Fed’s rate projections. EUR/USD key events today No significant US or Eurozone economic reports are scheduled for today. Therefore, it might be a slow day for the pair. EUR/USD technical outlook: Decline pauses, but bears target 1.0800 support After consolidating between the 1.0900 support and the 1.1000 resistance, EUR/USD broke below the range support. However, the decline paused to retest this range support as resistance. Moreover, the price stayed close to the 1.0900 key level as the 30-SMA caught up. If bears are willing to push prices lower, the pound will bounce lower from the 1.0900 key level to retest the 1.0800 support level. This would complete an impulse leg similar to the one before the consolidation. However, since the price sits slightly above the 30-SMA with the RSI above 50, bulls might take over if the price breaks above 1.0900. https://www.forexcrunch.com/blog/2024/01/22/eur-usd-outlook-investors-gear-up-for-crucial-ecb-meeting/