2024-01-05 08:50
The yen experienced a 2.5% decline against the dollar in the first week of the year. Traders are pricing in less than 140 basis points of Fed rate cuts. Economists anticipate the creation of 170,000 US jobs in December. On Friday, the USD/JPY outlook was optimistic, fueled by the dollar’s impressive weekly performance, as it recorded its strongest week since July. This surge comes amid fading expectations for imminent and substantial interest rate cuts. However, there was caution in the market before the awaited US payroll data later in the day. If you are interested in automated forex trading, check our detailed guide- The strong dollar overshadowed the Japanese yen, which experienced a 2.5% decline against the dollar in the first week of the year. It marks the weakest weekly performance since August 2022. December’s policy meeting minutes indicated that policymakers were ready to maintain high borrowing costs for an extended period. Consequently, some speculators have already reduced their bets on aggressive Fed rate cuts this year. Despite the Fed’s previous prediction of 75 basis points of rate cuts in 2024, market expectations have scaled back since the beginning of the year. Traders are now pricing in less than 140 basis points of cuts. Moreover, the likelihood of a March cut decreased from 86% to 65% within a week. However, the dollar’s recovery faces a test with the upcoming nonfarm payrolls report. Economists anticipate the creation of 170,000 jobs in December, fewer than the 199,000 in November. Elsewhere, data on Thursday revealed that US private employers employed more workers than expected in December, indicating continued strength in the labor market. USD/JPY key events today US average hourly earnings US non-farm employment change US unemployment rate US ISM services PMI USD/JPY technical outlook: Bullish momentum spikes after descending triangle On the charts, the bias for USD/JPY is bullish. The price has made a steep bullish move after breaking out of a descending triangle. Moreover, the RSI is overbought, and the price has left the 30-SMA far below, showing strong momentum. With this recent move, the price broke above the 143.00 key resistance level and rose to retest the 145.01 key resistance level. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- However, after such a sharp move, bulls might be exhausted. Therefore, the price will likely pause at 145.01 and pull back as the SMA catches up. Still, the new direction is promising, and bulls will likely break above 145.01 to retest the 146.51 resistance. https://www.forexcrunch.com/blog/2024/01/05/usd-jpy-outlook-dollar-set-for-strongest-week-since-july/
2024-01-04 12:29
The bias remains bearish as long as it stays below the downtrend line. Positive US data could punish the price of gold. A new lower low activates more declines. The gold price edged higher and is now trading at $2,050, far above yesterday’s low of $2,030. The metal has turned to the upside as the US dollar slumped. If you are interested in automated forex trading, check our detailed guide- Fundamentally, the US dollar took a hit from the US data and the FOMC Meeting Minutes yesterday. The JOLTS Job Openings and ISM Manufacturing Prices came in worse than expected. Furthermore, the meeting minutes confirmed a potential 75 bps rate cut in 2024, so the price of gold took advantage of this situation. Today, the US economic figures could have a big impact again. The ADP Non-Farm Employment Change could be reported at 120K above 103K in the previous reporting period. In comparison, the Unemployment Claims indicator is expected at 217K in the last week. In addition, the Final Services PMI will be released as well. Also, don’t forget that the US will release the NFP, Average Hourly Earnings, Unemployment Claims, and ISM Services PMI tomorrow, so positive economic figures should lift the greenback and may force XAU/USD to drop. Technically, a correction was expected after taking out the uptrend line and the 23.6% retracement level. Still, the sell-off was stopped by 50% (2,030), and now it has jumped above the 38.2% (2,044). The rebound could be only temporary as the price may retest the immediate resistance levels before dropping again. The XAU/USD could extend its downward movement if it stays below the downtrend line. Though only a new lower low, a valid breakdown below 50% may trigger more declines. https://www.forexcrunch.com/blog/2024/01/04/gold-price-turns-bullish-as-fomc-minutes-weigh-on-greenback/
2024-01-04 10:37
Oil prices increased due to persistent concerns over Middle Eastern supply disruptions. There is uncertainty over the start of Fed rate cuts. Economists anticipate a job gain of 13,500 in Canada. There has been a bearish shift in the USD/CAD outlook, mainly spurred by incidents at a Libyan field and escalating tensions in the Israel-Gaza conflict. The Canadian dollar is stronger, riding the wave of rising oil prices fueled by worries about supply disruptions in the Middle East. If you are interested in automated forex trading, check our detailed guide- Local protests on Wednesday led to a complete shutdown of production at Libya’s Sharara oilfield, which produces up to 300,000 barrels per day. Meanwhile, on Wednesday, the currency strengthened to a nearly two-week high. This rally came as investor confidence in an imminent shift by the Fed to rate cuts decreased. Notably, recent strong performances in risk-sensitive assets like stocks have boosted the Canadian dollar. Elsewhere, minutes from the Fed’s December 12-13 policy meeting provided little insight into the timing of potential rate cuts. Still, they indicated a growing belief that inflation is in check. Moreover, there are concerns about the risks associated with an “overly restrictive” monetary policy on the economy. This document marks the end of a year when the Fed was uncertain about the necessary measures to control inflation. However, by the end of the year, inflation was decreasing more rapidly than anticipated. The next big events for the pair include employment reports from the US and Canada on Friday. Economists anticipate a job gain of 13,500 in Canada and 168,000 in the US. USD/CAD key events today The US ADP non-farm employment change US initial jobless claims USD/CAD technical outlook: 1.3350 resistance triggers a pullback The pair has paused its recent rally after reaching the 1.3350 resistance level. At the same time, bulls could not push beyond the 0.382 fib retracement level. As such, the price is retreating and heading for the 30-SMA support. However, the bullish bias is still strong as the price is above the SMA, and the RSI is in bullish territory above 50. Therefore, the decline will likely pause at the 30-SMA, where bulls are waiting to resume the new uptrend. If this happens, the price will climb to the 1.3451 resistance level. However, if bears break below the 30-SMA, the price will dip to the 1.3200 support. https://www.forexcrunch.com/blog/2024/01/04/usd-cad-outlook-bullish-wti-supporting-loonie/
2024-01-04 09:25
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2024-01-04 08:44
The FOMC meeting minutes showed confidence that inflation is under control. There are no clear indications of when the Fed might initiate rate cuts. A third consecutive monthly decline in US job openings in November indicated a softening labor market. Thursday’s EUR/USD forecast points to a bearish trend as investors reassess their predictions for this year’s Federal Reserve rate cuts. Consequently, there is an air of caution in the markets after a strong risk rally just last month. If you are interested in automated forex trading, check our detailed guide- The minutes of the Fed’s December policy meeting on Wednesday indicated officials’ confidence in easing inflation. However, policymakers still perceived the need to keep rates restrictive for a while. Still, they raised concerns about the potential adverse effects of an “overly restrictive” monetary policy on the economy. Moreover, there were no clear indications of when the Fed might initiate rate cuts. Christopher Wong, a currency strategist at OCBC, noted, “The messaging that rates will stay elevated raises a second look at the aggressive cut expectations markets are pricing.” Meanwhile, data on Wednesday revealed a further contraction in US manufacturing in December. Additionally, a third consecutive monthly decline in US job openings in November indicated a softening labor market. Ongoing signs of a cooling US economy have reinforced expectations of Fed rate cuts this year, as inflation is easing. However, traders remain divided on the timing and extent of easing by the central bank. Current market pricing suggests a roughly 72% chance of the Fed initiating rate cuts in March, down from 87% a week ago. EUR/USD key events today German preliminary CPI m/m The US ADP non-farm employment change US unemployment claims EUR/USD technical forecast: Price action sinks below 30-SMA threshold The bias for EUR/USD is bearish on the charts as the price is now trading on the lower side of the 30-SMA. Initially, the price had been ascending, making higher highs. However, it was overbought at the reversal point, and sellers made a bearish engulfing candle, the first sign of a looming shift in sentiment. This shift came when the price finally broke below the 30-SMA, and the RSI dipped below the pivotal 50 level. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Currently, sellers have paused near a strong support zone comprising the 1.0900 key level and 0.618 fib retracement level. This support might trigger a pullback to retest the 30-SMA before the decline continues. The next target for the downtrend is at the 1.0750 support. https://www.forexcrunch.com/blog/2024/01/04/eur-usd-forecast-dollar-soars-amid-revised-rate-cut-outlook/
2024-01-03 12:18
Validating its breakout activates an upside continuation. Taking out the median line (ml), validates a larger growth. The FOMC Meeting Minutes should be decisive today. The USD/JPY price is trading at 142.64 at the time of writing and is fighting hard to resume its leg higher. The Japanese banks were also closed today in observance of the 4-day Bank Holiday. If you are interested in automated forex trading, check our detailed guide- The greenback took the lead even though the US Final Manufacturing PMI and Construction Spending came in worse than expected in the last trading session. Today, the US economic figures should bring high action. The JOLTS Job Openings could be reported at 8.84M versus 8.73M in the previous reporting period, ISM Manufacturing PMI could jump to 47.2 points from 46.7, while ISM Manufacturing Prices may drop to 49.5 points from 49.9 points. In addition, the Wards Total Vehicle Sales data should be released as well. Still, the traders are focused on the FOMC Meeting Minutes. The report represents a high-impact event, so the volatility should be huge. A dovish speech could punish the USD again, and the sentiment could change. From the technical point of view, the USD/JPY price jumped above the downtrend line, and now it challenges the supply zone from right below 142.83, which was previously high. Validating its breakout through the downtrend line and making a new higher high activates further growth towards the median line (ml) of the ascending pitchfork. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Still, a larger swing higher should be triggered after making a valid breakout through the median line (ml). On the contrary, invalidating its breakout may announce a new sell-off towards 141.00 psychological level. https://www.forexcrunch.com/blog/2024/01/03/usd-jpy-price-challenges-key-supply-zone-ahead-of-fomc/
