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/
2024-01-15 11:52
The price validated its breakout through the downtrend line. It seems overbought after failing to reach Friday’s high. The Canadian inflation figures should move the rate tomorrow. The gold price is trading at $2,053 at the time of writing. The precious metal is struggling to stay higher. The buyers lack conviction despite a strong rally. –Are you interested to learn more about forex options trading? Check our detailed guide- The US dollar seems determined to extend its growth which could negatively impact the gold prices. The appreciation of the US dollar versus its rivals after the US reported higher inflation in December may force the yellow metal to drop. Fundamentally, the XAU/USD tried to resume its growth as the US PPI reported a 0.1% drop versus a 0.1% growth expected on Friday, while the Core PPI rose by 0.0%, less compared to the 0.2% growth estimated. Today, the US Manufacturing Sales, Wholesale Sales, and the BOC Business Outlook Survey could move the markets. The fundamentals should be decisive tomorrow as Canada is to release the inflation figures. The Consumer Price Index may announce a 0.3% drop versus the 0.1% growth in the previous reporting period. The Core, Median, Trimmed, and Common CPI data will also be published. Furthermore, the US Empire State Manufacturing Index also represents a high-impact event. From a technical point of view, the gold price found strong support on the $2,015 static support, and now it has turned to the upside. It has passed above the downtrend line (channel’s resistance), signaling a potential broader upward movement. –Are you interested to learn about forex robots? Check our detailed guide- The metal has confirmed the breakout, but it seems a little overbought after failing to reach Friday’s high of $2,062 again. The broken downtrend line and the weekly pivot point of $2,041 represent key support levels. As long as it stays above these levels, the price could jump higher again despite minor retreats. https://www.forexcrunch.com/blog/2024/01/15/gold-price-struggling-to-retain-gains-above-2050/
2024-01-15 09:40
The unexpected decline in US producer prices led to a decline in Treasury yields. There is a 78% chance of the US central bank starting rate cuts in March. The currency experienced a 0.2% increase last week, marking its second consecutive weekly gain. Monday’s USD/CAD outlook displayed a hint of optimism, yet the pair remained largely flat amid subdued trading activity in the US owing to a public holiday. Concurrently, investors continued assessing Friday’s data, revealing an unexpected easing in US producer prices. –Are you interested to learn more about forex options trading? Check our detailed guide- The likelihood of Fed cuts this year, potentially starting in March, increased after Friday’s data. The unexpected decline in US producer prices led to a decline in Treasury yields. Last month, the producer price index for final demand decreased by 0.1%. Market pricing now indicates a 78% chance of the US central bank starting rate cuts in March, up from 68% a week ago, based on the CME FedWatch tool. Meanwhile, on Friday, the Canadian dollar showed little movement against the US dollar as oil retraced much of its earlier gains. Oil fell from its earlier two-week high following US and British strikes on Houthi targets in Yemen. Still, it closed up 0.9%. Additionally, the currency experienced a 0.2% increase last week, marking its second consecutive weekly gain. It reached a four-week high on Thursday at 1.3442, influenced by higher-than-expected US inflation data that momentarily reduced expectations for the Fed to consider interest rate cuts in March. Elsewhere, according to economists, Canada’s December inflation report on Tuesday will likely show an increase from 3.1% to 3.3%. USD/CAD key events today Neither the US nor Canada will release high-impact reports today, which might lead to consolidation for the pair. USD/CAD technical outlook: Price achieves new highs while anchored at 1.3350 On the technical side, the USD/CAD price is making new highs but maintaining the same low at 1.3350. This is a sign that, although bulls are in control, bears are challenging the uptrend. As a result, the price is now chopping through the 30-SMA. –Are you interested to learn about forex robots? Check our detailed guide- Moreover, the RSI has made lower highs amid the uptrend, indicating weakening bullish momentum. Recently, bulls pushed off the 1.3350 support level with an engulfing candle. If bulls regain momentum, the price will likely climb to the 1.3501 resistance level. Otherwise, bears might finally breach the 1.3350 support. https://www.forexcrunch.com/blog/2024/01/15/usd-cad-outlook-pair-holds-steady-on-a-public-holiday/
2024-01-15 08:12
The data revealed an unexpected decline in US producer prices. Current market pricing indicates a 78% probability that the US central bank will initiate rate cuts in March. Philip Lane said the ECB could start cutting rates in June. Monday’s EUR/USD forecast leaned towards optimism, driven by a weakened dollar, as investors raised their expectations for early rate cuts by the Fed. With a potential kick-off in March, the prospects of Fed cuts gained momentum following Friday’s data showing an unexpected drop in US producer prices. –Are you interested to learn more about forex options trading? Check our detailed guide- Chris Weston, Pepperstone’s head of research, commented, “Following the US CPI and PPI releases, the market is increasingly certain about the Fed cuts starting in March. Moreover, markets expect a 25 bps cut at every meeting from that point.” Meanwhile, current market pricing indicates a 78% probability that the US central bank will initiate rate cuts in March. This is up from 68% a week ago. In contrast, the ECB plans to assess crucial data for potential interest rate cuts by June. Still, ECB chief economist Philip Lane cautioned against moving too quickly, as it could be counterproductive. Lane believes there will be a “series of rate cuts.” However, he noted that important wage data would only be fully accessible by the ECB’s meeting on June 6. Meanwhile, investors speculate that the ECB might reduce borrowing costs this year, starting in March. Money markets currently anticipate at least 150 basis points in cuts, bringing the ECB’s deposit interest rate for banks to 2.5%. EUR/USD key events today There won’t be any significant reports in the Eurozone. Meanwhile, the US is observing Martin Luther King Jr. Day, which might lead to thin trading. EUR/USD technical forecast: Corrective move continues between 1.0900 and 1.1000 On the charts, the EUR/USD price is in a corrective move after pausing its decline at the 1.0900 support level. However, this corrective move has failed to go beyond a strong resistance zone comprising the 1.1000 key level and the 0.5 fib retracement level. –Are you interested to learn about forex robots? Check our detailed guide- Moreover, the price is mostly chopping through the 30-SMA, indicating no clear direction. This can also be seen in the RSI, which has failed to respect the pivotal 50 level. After a corrective move, the price will likely make an impulsive leg. Furthermore, given the previous impulsive leg was bearish, EUR/USD might soon break below the 1.0900 support to retest 1.0800. https://www.forexcrunch.com/blog/2024/01/15/eur-usd-forecast-investors-ramp-up-bets-on-feds-cut/
