2024-01-25 08:07
The fourth-quarter US gross domestic product will likely reveal a 2% annualized growth. On Wednesday, the Bank of Canada maintained its key overnight rate at 5%. Money markets fully anticipate a 25 basis point BoC rate cut in June. Thursday’s USD/CAD forecast hinted at bullish prospects, with the dollar standing resilient near a six-week high. Investors eagerly awaited GDP and other critical data, seeking valuable insights that could give clues on the outlook for US interest rates. –Are you interested to learn more about forex options trading? Check our detailed guide- The initial report on the fourth-quarter US gross domestic product will likely reveal a 2% annualized growth. Moreover, the report might show that the US avoided a recession in 2023. Furthermore, it will likely indicate a slowdown in inflation during the last quarter. This could fuel expectations of potential rate cuts in the first half of 2024. Meanwhile, the Canadian dollar weakened after the Bank of Canada held its key overnight rate at 5% on Wednesday. Additionally, it emphasized a shift in focus from concerns about underlying inflation to considering when to cut rates. Canadian money markets expect a 25 basis point cut in June. The BoC removed language from previous policy statements on possible rate hikes. However, Governor Macklem later mentioned that the possibility of additional rate hikes had not been ruled out. Furthermore, the BoC adjusted its growth outlook, anticipating weak growth in the first quarter, followed by a gradual pickup. Inflation will likely stay around 3% in the first half of 2024, easing to 2.5% in the second half. Meanwhile, a return to the 2% target will likely happen sometime in 2025. USD/CAD key events today Advance US GDP q/q US unemployment claims USD/CAD technical forecast: Bulls make a comeback On the technical side, USD/CAD has retested the 1.3525 resistance level after the bearish takeover failed at the 1.3425 support level. At the moment, bulls are attempting to resume the previous bullish trend. They have pushed the price above the 30-SMA, and the RSI is above 50. -If you are interested in knowing about scalping forex brokers, then read our guidelines to get started- Initially, bears had attempted to take control when the price broke below the 30-SMA. However, they were not strong enough to continue below the 1.3425 support level, allowing bulls to regain control. Now, bulls are facing strong resistance. At the same time, the RSI is showing weaker bullish momentum at this resistance. If it holds, the price will fall back to the 1.3425 support. Meanwhile, the bullish trend will continue if bulls regain momentum. https://www.forexcrunch.com/blog/2024/01/25/usd-cad-forecast-dollar-holds-near-6-week-high-ahead-of-gdp/
2024-01-24 13:50
Taking out the median line activates further growth. The US manufacturing and services data should bring high action today. The BOC Press Conference could change the sentiment. The gold price is trading in the green at $2,033 at the time of writing. The metal seems determined to hit new highs as the US dollar lost momentum. In the short term, the XAU/USD stays sideways. Hence, we need to wait for a clear direction. -Are you interested in learning about the forex signals telegram group? Click here for details- Yesterday, the BOJ left its monetary policy unchanged, while the New Zealand Consumer Price Index rose by 0.5%, as expected. Today, the manufacturing and services data and the BOC should move the markets. The German and the Eurozone services and manufacturing sectors confirmed contraction again, while the United Kingdom Flash Services PMI announced further expansion after being reported at 53.8 points above 53.1 expected. Later, the US Flash Manufacturing PMI is expected to drop from 47.9 points to 47.6 points, conforming to further contraction, while the Flash Services PMI could remain at 51.4 points for the second month in January. Also, the Bank of Canada should keep the Overnight Rate at 5.00%. Still, the BOC Press Conference, BOC Rate Statement, and BOC Monetary Policy Report could change the sentiment. Tomorrow, the ECB and the US Advance GDP represent high-impact events. From the technical point of view, the XAU/USD seems undecided in the short term. The price action developed a symmetrical triangle, so only escaping from this pattern brings us new opportunities. The yellow metal has found demand above the $2,020. Now, it tries to approach new highs. I have drawn an ascending pitchfork, hoping to catch an upward movement. The price is trapped between the median and lower median lines (ml) lines (LML). A valid breakout through the triangle’s resistance and above the median line validates a larger growth and could be seen as a long opportunity. https://www.forexcrunch.com/blog/2024/01/24/gold-price-forms-triangle-eyes-on-us-pmi-data/
2024-01-24 11:27
British services firms experienced increased growth this month. Data revealed a smaller-than-anticipated budget deficit for December in Britain. Market indicators suggest approximately a 50% probability that the BoE will start rate cuts in May. Wednesday brought a bullish outlook to the GBP/USD forecast due to signs of resilience in the British economy. Moreover, there were expectations that the Bank of England would delay rate cuts compared to other central banks. –Are you interested to learn more about forex options trading? Check our detailed guide- British services firms experienced increased growth this month, indicating a modest recovery in the sluggish economy. However, factories are now feeling the impact of tensions in the Red Sea. The PMI data will likely reassure the Bank of England before the upcoming interest rate meeting, suggesting a reduction in overall inflation pressure. Nevertheless, it may support the argument for a cautious approach in gradually lowering borrowing costs. The preliminary S&P Global/CIPS UK Composite PMI rose to 52.5 in January, marking the highest level in seven months. Moreover, it was an improvement from December’s reading of 52.1. Meanwhile, on Tuesday, data revealed a smaller-than-anticipated budget deficit for December in Britain. Therefore, there is space for tax cuts in the upcoming March budget. Analysts at Monex Europe mentioned that sentiment toward the UK economy is “generally improving.” In the medium term, the key question for the British currency is whether the Bank of England will trail behind the Fed and the ECB in cutting rates and by what margin. Meanwhile, market indicators suggest approximately a 50% probability that the BoE will start rate cuts in May. However, this timeline might be too early for the bank, which has expressed concerns about persistent inflation. GBP/USD key events today US Flash Manufacturing PMI US Flash Services PMI GBP/USD technical forecast: Renewed bullish momentum targets 1.2800 The pound is continuing higher and is on the verge of breaking above the 1.2750 resistance level. The bullish bias is strong and has been since the price made a bullish engulfing candle at the 1.2600 support level. -If you are interested in knowing about scalping forex brokers, then read our guidelines to get started- Initially, the bullish move paused at the 1.2750 resistance level, allowing bears to attempt a takeover at the 30-SMA. However, they failed as bulls returned with renewed momentum. If the price closes above 1.2750, bulls will soon retest the 1.2800. Additionally, a break above 1.2800 would finally allow the pair to trend after a long time in consolidation. https://www.forexcrunch.com/blog/2024/01/24/gbp-usd-forecast-resilience-in-uk-economy-boosts-pound/
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/
