2024-01-18 11:58
The EUR/USD maintains a bearish bias if it stays below the downtrend line. A new lower low activates more declines. The US economic figures should bring more action today. The EUR/USD price bounced back within the broad bearish trend. The US dollar’s minor correction weakened the greenback in the short term. The pair is trading at 1.0889 at the time of writing, far above yesterday’s low of 1.0844. After the last sell-off, a minor rebound was expected before extending its downward movement. –Are you interested to learn more about forex options trading? Check our detailed guide- Fundamentally, the US Retail Sales, Core Retail Sales, Import Prices, and Industrial Production came in better than expected in the last trading session. Only the Capacity Utilization Rate came in worse than expected. Today, the Eurozone Current Account was reported at 24.6B compared to the 30.9B expected versus the 32.3B in the previous reporting period. The US session should bring some volatility as the US is to release important economic data. The Unemployment Claims is expected at 206K above 202K in the previous reporting period, Building Permits could remain steady at 1.47M, the Philly Fed Manufacturing Index may jump to -6.6 points from -10.5 points, while the Housing Starts indicator could drop to 1.43M. Technically, the EUR/USD price extended its downward movement after escaping from the minor up channel. This represented a downside continuation formation. –Are you interested to learn about forex robots? Check our detailed guide- The pair has also taken out the uptrend line, activating more declines. It has failed to stay below the weekly S2 of 1.0863, signaling exhausted sellers. The bias remains bearish as long as it stays below the downtrend line. As you can see on the hourly chart, the rebound was stopped by the weekly S1 of 1.0905 before dropping again. Still, only a new lower low activates more declines. https://www.forexcrunch.com/blog/2024/01/18/eur-usd-price-rejected-by-1-09-level-amid-risk-off/
2024-01-18 10:31
Robust US retail sales data reduced bets on a Fed interest rate cut in March. The likelihood of a rate cut in March has reduced to 61% from 65.1% on Tuesday. Investors have steadily reduced bets on a hawkish Bank of Japan. Thursday’s USD/JPY forecast maintains its optimistic stance, staying bullish despite a minor retreat. The dollar, lingering near a one-month high against major peers, draws strength from robust US retail sales data, which reduced expectations for a March Fed cut. –Are you interested to learn more about forex options trading? Check our detailed guide- Moreover, the likelihood of a rate cut in March has reduced to 61% from 65.1% on Tuesday, according to CME’s FedWatch Tool. Notably, the dollar reached 148.525 yen overnight, a level not seen since the end of November. Investors steadily reduced bets on a hawkish Bank of Japan, partly influenced by the recent New Year’s Day quake in central Japan. The BOJ will have its policy meeting next week on Monday and Tuesday. Meanwhile, Shoki Omori, Chief Japan Desk Strategist at Mizuho Securities, said that the dollar yen could fluctuate between 145 and 150 in the near term. This range was last seen in mid-November. Furthermore, if the BOJ maintains its dovish stance next week and Fed Chair Jerome Powell is hawkish at the US central bank’s policy meeting this month, Omori suggested the dollar might rise above 150 yen by the start of February. Additionally, he said that Japanese officials could start to come in and verbally intervene at any time now” to stop the yen’s decline. USD/JPY key events today US Initial Jobless Claims USD/JPY technical forecast: Price hits resistance wall at 148.25 On the charts, the USD/JPY price has hit a ceiling at the 148.25 key resistance level and is retreating. However, the bullish bias is strong as the indicators on the chart point to a robust bullish trend. Notably, the price has respected the 30-SMA as support, bouncing higher every time to make a new high. Moreover, the RSI, which has stayed above 50 since the bulls took over, is currently overbought. –Are you interested to learn about forex robots? Check our detailed guide- The price has made a series of swing highs and swing lows. The most recent swing high has paused at 148.25. Therefore, the next move will likely be a swing low to retest the 30-SMA support. From there, bulls might target the 150.02 resistance level. https://www.forexcrunch.com/blog/2024/01/18/usd-jpy-forecast-robust-us-sales-push-dollar-to-1-month-top/
2024-01-18 09:25
Australian employment experienced a sharp decline in December. The US reported robust retail sales in December. Traders have reduced the likelihood of a first Fed rate cut by March to 61%. The AUD/USD outlook shows a hint of bearish momentum, with the Australian dollar dipping by as much as 0.04% due to lower-than-expected December employment data. As a result, there is speculation that interest rates in Australia might have peaked. –Are you interested to learn more about forex options trading? Check our detailed guide- City Index’s senior market analyst, Matt Simpson, noted, “There’s some technical support around $0.6520, which bears are hesitant to breach.” However, he added, “Yet the jobs report doesn’t provide any meaningful reason to be long AUD,” Consequently, the next move depends on Fed expectations and the US dollar. Notably, Australian employment experienced a sharp decline in December. Meanwhile, the jobless rate remained constant due to a decrease in people actively seeking employment. There was a significant drop of 65,100 in net employment for December compared to the revised surge of 72,600 in November. Moreover, this decline contrasted with market expectations of an increase of approximately 17,600. Elsewhere, the US released data on retail sales showing an unexpected surge. The robust US retail sales data reduced expectations that the Fed would lower interest rates as soon as March. Traders have reduced the likelihood of a March rate cut to 61%, down from 65.1% on Tuesday. At the same time, Fed officials, including Governor Christopher Waller, are pushing back against expectations of quick policy easing. However, the market still expects 150 basis points of cuts by the end of the year. AUD/USD key events today US unemployment claims AUD/USD technical outlook: 0.6550 emerges as a formidable barrier On the technical side, the AUD/USD price has found support at the 0.6550 key level after a sharp decline. Although there has been a small recovery, the bias remains bearish as the price trades well below the 30-SMA. At the same time, the RSI is in the oversold region. –Are you interested to learn about forex robots? Check our detailed guide- However, since the price made such a big swing from the 30-SMA, it might pause or pull back to retest the SMA. Moreover, price action near the 0.6550 key level supports a reversal. The price has made candlesticks with long bottom wicks below 0.6550. This shows that bears have been rejected below this key level. Still, a push below this support would lead to a retest of the 0.6500 key level. https://www.forexcrunch.com/blog/2024/01/18/aud-usd-outlook-aussie-dips-after-employment-drop/
2024-01-16 10:17
A new higher high validates further growth. The US data should have a big impact during the week. The bias remains bullish as long as it stays above the 50% Fibonacci line. The USD/JPY price rallied in the short term, trading at 146.45 above the former high of 146.41. The bias is bullish as the US dollar soared amid poor risk appetite. –Are you interested to learn more about forex options trading? Check our detailed guide- The Yen depreciated a little even though the Japanese PPI rose by 0.0% compared to the 0.3% drop estimated. Later, the US and the Canadian data should have a big impact on all markets. The Empire State Manufacturing Index is expected at -4.9 points versus -14.5 points in the previous reporting period. Furthermore, the Canadian CPI m/m may announce a 0.3% drop after a 0.1% growth in the previous reporting period. Positive US data helps the greenback to dominate the currency market. Tomorrow, the US will release the Retail Sales indicator which is expected to report a 0.4% growth, and the Core Retail Sales data. The US figures should move the rate, so the fundamentals could be decisive during the week. Technically, the USD/JPY price edged higher after escaping from the flag pattern. You knew from my previous analysis that the bias is bullish as long as it stays above the downside 50% Fibonacci line of the ascending pitchfork. –Are you interested to learn about forex robots? Check our detailed guide- Now, the pair has passed again above the median line (ml) and it challenges the former high of 146.41. This stands as a static resistance, so it remains to see if the price validates its breakout, confirming a potential upside continuation. The 146.58 historical level represents a static upside obstacle as well. So, taking out this resistance, making a new higher high validates more gains ahead. https://www.forexcrunch.com/blog/2024/01/16/usd-jpy-price-challenges-146-5-as-risk-remains-sour/
2024-01-16 09:43
Concerns about potential Red Sea ship attacks dampened risk sentiment. Comments from ECB officials opposing early rate cuts cast a shadow on the global rate outlook. Money markets expect cuts of almost 145 basis points in the ECB’s deposit rate this year. A bearish tone dominated Tuesday’s EUR/USD price analysis as the dollar surged. Investors recalibrated their expectations of a March rate cut by the Fed, swayed by the hawkish sentiments expressed by European Central Bank officials. –Are you interested to learn more about forex options trading? Check our detailed guide- Simultaneously, concerns about potential Red Sea ship attacks dampened risk sentiment. Comments from ECB officials opposing early rate cuts cast a shadow on the global rate outlook. Consequently, market expectations for a quarter basis point Fed rate cut in March have decreased to a 66% probability, down from 77% the previous day. On Monday, ECB’s Joachim Nagel cautioned against the mistake of premature interest rate reductions. Moreover, he said, “It’s too early to talk about cuts; inflation is too high. ” Meanwhile, money markets are currently pricing 145 basis points of cuts to the ECB’s deposit rate this year, likely starting in April. Charu Chanana, Head of Currency Strategy at Saxo in Singapore, noted, “The hawkish ECB commentaries last night have fueled concerns that market pricing for the Fed rate path may also be aggressive. Moreover, some safe-haven demand is likely at play with Red Sea disruptions escalating.” On Monday, a Houthi movement official from Yemen declared an expansion of their Red Sea targets, including US ships. Furthermore, they vowed to continue with attacks following US and British strikes on their Yemen sites. EUR/USD key events today The US Empire State Manufacturing Index EUR/USD technical price analysis: Bears threaten with a new impulse leg On the technical side, the EUR/USD price is on the verge of breaking below the 1.0900 support level. The bias is bearish, with the price below the 30-SMA and the RSI nearly oversold. The bearish move comes after the price found strong resistance at the 1.1000 key level. Additionally, the price got near the 0.5 fib level, another strong resistance. –Are you interested to learn about forex robots? Check our detailed guide- Moreover, there is a high chance the price will push below 1.0900, as this comes after a corrective move. Therefore, bears might be gearing up to make an impulsive move to the 1.0800 support level. However, if the 1.0900 support holds firm, the price will continue in the corrective move with the nearest resistance at 1.1000. https://www.forexcrunch.com/blog/2024/01/16/eur-usd-price-analysis-ecb-hawks-alter-investor-outlook-on-fed-rate-cuts/
2024-01-16 08:08
Data revealed a deceleration in British wage growth throughout November. Markets expect substantial interest rate cuts by the Bank of England this year. Money markets are currently factoring in approximately 130 basis points of BoE interest rate cuts by year-end. On Tuesday, the GBP/USD outlook took a bearish turn as the pound faced a decline, fuelled by data revealing a drop in British wage growth throughout November. This development has intensified anticipation for substantial interest rate cuts by the Bank of England this year. –Are you interested to learn more about forex options trading? Check our detailed guide- Official data on Tuesday revealed a drop in the growth of British wages, excluding bonuses, to 6.6% in the September-to-November period compared to the same period a year earlier. Meanwhile, economists had anticipated a 6.6% rise in the regular earnings measure. Notably, the Bank of England has been concerned about rapid pay increases. Consequently, the bank has worked to bring inflation down to its 2% target despite a recent slowdown in the headline rate of price growth. However, now there is less pressure due to the slowdown in pay increases. Markets await insights from Britain’s inflation figures to gauge the BoE’s timeline for starting monetary policy easing. At the same time, money markets are currently factoring in approximately 130 basis points of BoE interest rate cuts by year-end, with a probable initial cut in May. The central bank is concerned about persistent inflation and the potential risk of more fiscal easing in the UK March budget. Moreover, recent data revealed that Britain’s economy exceeded expectations in November but remains susceptible to a mild recession. This poses a challenge for Prime Minister Rishi Sunak ahead of the anticipated 2024 election. GBP/USD key events today US Empire State Manufacturing Index BOE Gov Bailey Speaks GBP/USD technical outlook: Eyes on 1.2600 as Bears gain momentum On the technical side, the GBP/USD price is bearish as the price is falling well below the 30-SMA. At the same time, the RSI is quickly falling toward the oversold region, a sign that bears are gaining momentum. Therefore, the price might soon retest the 1.2600 support level. –Are you interested to learn about forex robots? Check our detailed guide- However, on a larger scale, the price is still stuck in a sideways move between the 1.2800 resistance and 1.2600 support levels. As such, a bearish trend can only emerge if the price breaks below the 1.2600 support level. Bears would then retest the 1.2503 support level. https://www.forexcrunch.com/blog/2024/01/16/gbp-usd-outlook-british-wage-growth-hits-the-brakes-in-nov/
