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/

2024-01-22 08:06

Data on Friday revealed a significant drop in UK retail sales. Investors still believe the BoE will be slower to cut rates than the ECB and the Fed. Data released late last week indicated that US economic activity remains robust. The GBP/USD forecast hints at a modest bullish trend after a slight rise on Monday, momentarily disrupting the downward momentum from Friday. On Friday, the pound collapsed due to a notable plunge in retail sales, marking the most substantial decline in three years. -Are you interested in learning about the forex signals telegram group? Click here for details- Despite this, the currency finds support in persistent inflation. Moreover, investors believe the Bank of England won’t reduce rates as quickly as the ECB or the Fed. At the moment, market indicators suggest a roughly 50% chance that the BoE will cut rates in May. Furthermore, the pound has experienced the smallest decline among G10 currencies, while the dollar strengthened broadly throughout the year. On Friday, data from the UK revealed a surprising decrease in December’s consumer spending. Consequently, it increased recession risks and paused the currency’s recent advances. The Office for National Statistics attributed a 3.2% contraction in retail sales volumes between December and November to earlier-than-usual Christmas shopping, particularly for food. Meanwhile, data released late last week indicated that US economic activity remains robust even with interest rates at their highest levels in decades. As a result, there was a revision in market expectations. There are fewer bets on Fed rate cuts starting in March. Traders have shifted their bets, predicting that rate cuts will likely start in May. GBP/USD key events today Investors do not expect any key events today. Therefore, the pair might move sideways as markets absorb last week’s releases. GBP/USD technical forecast: Range-bound between 1.2600 and 1.2800 On the technical side, the GBP/USD price remains trapped between the 1.2800 resistance and the 1.2600 support. Each time the price gets near the 1.2800 resistance, bears take control. Meanwhile, when it gets near the 1.2600, bulls take over. Notably, the most recent bullish takeover came when the pair touched the 1.2600 support level. At this point, the price made a bullish engulfing candle, engulfing six previous candles. This indicated a surge in bullish momentum. Moreover, the takeover was confirmed when the price broke above the 30-SMA. Bulls are now targeting the 1.2800 range resistance. https://www.forexcrunch.com/blog/2024/01/22/gbp-usd-forecast-greenbacks-correction-helping-sterling/

2024-01-21 06:23

The dollar strengthened amid upbeat data from the US. The yen weakened as investors lost hope for a BoJ pivot to interest rate hikes. Inflation in Japan slowed for the second month. The USD/JPY weekly forecast reveals a bullish outlook as the resilient US economy propels the dollar to new heights. On the flip side, the yen faces headwinds as the Bank of Japan leans towards a dovish stance. -Are you interested in learning about the forex signals telegram group? Click here for details- Ups and downs of USD/JPY USD/JPY had a very bullish week as the dollar strengthened amid upbeat data from the US. Meanwhile, the yen weakened as investors lost hope for a BoJ pivot to interest rate hikes. Notably, data on retail sales and the labor market pointed to strength in the US economy. Retail sales came in higher than expected, while initial jobless claims fell significantly. Meanwhile, in Japan, inflation slowed for the second month, solidifying expectations that the BoJ will keep its dovish stance. Next week’s key events for USD/JPY Next week, traders will pay attention to the BoJ policy meeting in Japan. Meanwhile, the US will release data on GDP and core durable goods orders. The Bank of Japan is expected to keep its ultra-loose monetary policy. The focus will be on any hints Governor Kazuo Ueda provides about the central bank’s plan to raise short-term interest rates from negative territory. Market expectations point towards a potential rate increase in March or April as policymakers work towards sustaining inflation at the BOJ’s 2% target. On the other hand, data from the US will show the current state of the economy as investors speculate on the timing of Fed rate cuts. USD/JPY weekly technical forecast: Bullish bias strengthens with break above 0.618 fib The bullish bias for USD/JPY has strengthened as the price has broken above the key 0.618 fib level. As a result, the price now sits far above the 22-SMA, with the RSI just below the overbought region. Bulls have been in the lead since the price touched and reversed from the 140.05 support level. After breaching the 0.618 fib level, the steep, bullish move is targeting the next resistance at 152.00. However, before getting there, the price will likely pause or pull back to retest the 22-SMA. However, the bullish move will continue if the price stays above the SMA and the RSI above 50. https://www.forexcrunch.com/blog/2024/01/21/usd-jpy-weekly-forecast-dovish-boj-upbeat-us-data/

2024-01-21 06:21

Inflation in Canada came in higher than expected, dashing hopes for early rate cuts by the BoC. The US economy remained resilient, with robust retail sales. The Canadian dollar strengthened as oil prices surged. The USD/CAD weekly forecast paints a slightly bearish picture, with the Canadian dollar riding the wave amid surging oil prices. Ups and downs of USD/CAD The pair had a bullish week. However, it closed well below its highs. During the week, investors got to assess data from the US and Canada. Inflation in Canada came in higher than expected, dashing hopes for early rate cuts by the BoC. Meanwhile, the US economy remained resilient, with robust retail sales and a significant drop in initial jobless claims. -Are you interested in learning about the forex signals telegram group? Click here for details- However, the main driver for the pair towards the end of the week was the rally in oil prices. The Canadian dollar strengthened with oil, leading to a lower close for the pair. Next week’s key events for USD/CAD The consensus among economists is that the Bank of Canada will maintain its overnight key interest rate at 5.00% on January 24 and March. Additionally, most economists expect the Bank of Canada to delay any key interest rate cuts until at least June. Meanwhile, in the US, investors still struggle to predict when the Fed will start rate cuts. The US economy is still strong, and GDP and core durable goods data next week will shed more light on the economy. USD/CAD weekly technical forecast: Pullback eyes 22-SMA support On the technical side, USD/CAD is retreating after meeting a strong resistance zone. However, the bias is bullish because buyers managed to push the price above the 22-SMA. They took over when the downtrend stopped at the 1.3201 support level. However, the new bullish move has paused at a resistance zone comprising the 0.5 fib level and the 1.3501 resistance level. Consequently, there is a pullback that might reach the 22-SMA support in the coming week. This will allow sellers to test the new bullish trend. If buyers are ready to push the price beyond the 1.3501 level, then the price will respect the 22-SMA support. However, if this was a deep retracement in the downtrend, then bears might resume the downtrend next week. In this case, the price would break below the 22-SMA to retest the 1.3201 support. https://www.forexcrunch.com/blog/2024/01/21/usd-cad-weekly-forecast-surging-oil-supports-canadian-dollar/