2024-01-06 11:04
The dollar strengthened due to upbeat employment data and reduced rate-cut bets. Analysts indicated that the jobs report means the Fed is unlikely to cut rates as soon as March. The Fed projected an approximately 75 basis points cut in rates for 2024. A surge in the dollar, fueled by an upbeat employment report, sets a bearish tone in the AUD/USD weekly forecast. The employment report showed the US economy remains hot and might need high rates for longer. Ups and downs of AUD/USD The Aussie closed the week lower as the dollar strengthened due to upbeat employment data and reduced rate-cut bets. Notably, at the start of the week, the dollar gained as investors became less confident about a March Fed rate cut. Later, the nonfarm payroll report gave it another boost. Analysts indicated that the jobs report means the Fed is unlikely to cut rates as soon as March. Moreover, they observed that the futures market would eventually align more closely with the Fed’s projection of approximately a 75 basis points cut in rates for 2024. Next week’s key events for AUD/USD The calendar for next week will feature inflation data from the US. The US will release the consumer and producer price index reports. These reports will majorly impact the pair as they will determine when the Fed will start cutting rates. A higher-than-expected reading on consumer inflation could lower bets for a rate cut as early as March. On the other hand, easing inflation would increase bets for a March cut. Consequently, it would weaken the dollar and support a rally in the pound. AUD/USD weekly technical forecast: Bears test channel support On the technical side, AUD/USD is trading in a bullish channel, respecting its support and resistance. At the same time, the price is respecting the 22-SMA support and bouncing higher every time it touches the line. Meanwhile, the RSI has traded above 50 since the price crossed above the 22-SMA, supporting bullish momentum. The bullish move recently paused at the 0.6850 resistance level, leading to a retracement. Bears managed to push the price down to a solid support zone comprising the 22-SMA and the 0.6674 support level. Moreover, the price has reached the channel support. Therefore, bulls will likely return next week to continue the uptrend from this support zone. On the other hand, if the price breaks below this zone, it will signal a shift in sentiment to bearish and a possible reversal. https://www.forexcrunch.com/blog/2024/01/06/aud-usd-weekly-forecast-dollar-strengthens-on-upbeat-nfp/
2024-01-05 12:56
The downside pressure remains high after failing to make a new higher high. A new lower low activates more declines. Positive US data should lift the greenback. The EUR/USD price lost its shine again on Friday. The pair is at 1.0913 at the time of writing. Fundamentally, the US dollar received a helping hand from upbeat US data in the last session. If you are interested in automated forex trading, check our detailed guide- The ADP Non-Farm Employment Change, Unemployment Claims, and Final Services PMI came in better than expected. Today, the Eurozone CPI Flash Estimate reported a 2.9% growth less versus the 3.0% growth expected. Core CPI Flash Estimate came in line with expectations, PPI reported a 0.3% drop, more than the 0.1% fall estimated, while German Retail Sales dropped by 2.5% compared to the 0.5% drop forecasted. Later, the US economic figures should drive the price. The Non-Farm Payrolls is expected at 168K versus 199K in the previous reporting period. Average Hourly Earnings may announce a 0.3% growth in December versus a 0.4% growth in November, while the Unemployment Rate could jump from 3.7% to 3.8%. Furthermore, the US will release the ISM Services PMI and the Factory Orders, while Canada publishes the Employment Change and Unemployment Rate. Positive US data should lift the greenback. As you can see on the H1 chart, the price found resistance at 1.0968, and now it has reached the median line (ML) of the descending pitchfork again. This represents a dynamic support, while the 1.09 psychological level represents a static downside obstacle. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Technically, the downside pressure remains high after failing to make a new higher high. Making a new lower low and invalidating the demand zone validates more declines. A valid breakdown below the 61.8% (1.0882) can confirm a reversal. However, staging above the 1.09 level and making only false breakdowns below the immediate support level may announce a new leg higher. https://www.forexcrunch.com/blog/2024/01/05/eur-usd-price-playing-within-demand-zone-ahead-of-us-nfp/
2024-01-05 09:53
Markets expect the employment figures to show an additional 170,000 US jobs in December. Data revealed the seventh consecutive monthly contraction in Canada’s service sector. The Canadian dollar was weaker due to a decline in oil prices. The USD/CAD price analysis on Friday showed a bullish mood sparked by a stronger dollar due to reduced expectations of Fed rate cuts this year. Moreover, the currency was on hold as the market eagerly awaited the highly anticipated US payroll data later in the day. Markets expect the employment figures to show an additional 170,000 jobs in December, a decrease from the 199,000 recorded in November. If you are interested in automated forex trading, check our detailed guide- Meanwhile, the currency was mostly steady in the previous session as the Canadian dollar gave up earlier gains due to concerns about a possible recession. Notably, data revealed the seventh consecutive monthly contraction in Canada’s service sector. The decline in service sector activity in December was influenced by high borrowing costs that impacted the housing market. The business activity index was at 44.6, well below the 50 threshold separating expansion from contraction. Moreover, the index has been below 50 since June. Furthermore, the Canadian dollar was weaker due to a decline in oil prices. This decline came as significant weekly gasoline and distillate stock builds overshadowed a larger-than-expected crude stock draw. Additionally, Canada’s employment report for December, scheduled for Friday, might provide additional insights into the state of the economy. Meanwhile, data in the US on Thursday revealed that private payrolls saw a substantial increase of 164,000 jobs in the last month. It is the most significant monthly gain since August. USD/CAD key events today Canada’s Employment Change Canada’s unemployment rate US nonfarm payrolls US unemployment rate US ISM services PMI USD/CAD technical price analysis: Momentum fades at resilient resistance On the technical side, USD/CAD has stalled at the resistance zone comprising the 1.3350 resistance level and the 0.382 fib level. The indicators on the chart point to a bullish bias, with the 30-SMA moving up and trading below the price and the RSI above 50. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- However, bulls might be exhausted as the RSI has made a slight bearish divergence. Although the price is steady at the resistance zone, the RSI shows progressively weaker momentum. Consequently, we might get a drop to retest the 30-SMA support or lower. Bulls can only continue the uptrend if they regain momentum and keep the price above the 30-SMA. https://www.forexcrunch.com/blog/2024/01/05/usd-cad-price-analysis-fed-rate-cut-bets-lower-eyes-on-nfp/
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/
