2023-12-08 08:28
There is optimism that Japan’s ultra-low interest rates are approaching their end. The dollar was weak ahead of the awaited US nonfarm payrolls report. Japan’s economy contracted faster than initially estimated in the third quarter. As the week drew to a close, the USD/JPY outlook took a bearish turn, driven by the yen’s formidable rally. The currency surged, poised for its most impressive performance against the dollar in nearly five months. This surge came from increased bets that Japan’s ultra-low interest rates are approaching their end. –Are you interested to learn more about forex options trading? Check our detailed guide- Moreover, the yen’s overall strength restrained the dollar, which weakened before the awaited US nonfarm payrolls report later in the day. On Thursday, Bank of Japan (BOJ) Governor Kazuo Ueda mentioned that the central bank had various options for targeting interest rates once it lifted short-term borrowing costs from negative territory. Notably, it was the most explicit indication that the BOJ might soon phase out its ultra-loose monetary policy. Consequently, the yen surged to multi-month highs against major peers. Moreover, it experienced its most significant daily rise since January, with a gain of over 2% on Thursday. As such, it was poised to end the week with a more than 2% increase. Now, attention shifts to the upcoming two-day monetary policy meeting of the BOJ on Dec. 18 for indications of a potential policy shift. Meanwhile, revised data on Friday revealed that Japan’s economy contracted more rapidly than initially estimated in the third quarter. It complicates the central bank’s efforts to phase out its accommodative monetary policy, particularly as the household sector struggles. USD/JPY key events today Investors expect key events from the US, including Average hourly earnings Non-farm employment change Unemployment rate Consumer sentiment USD/JPY technical outlook: Price pattern hints at more downside On the charts, the USD/JPY price has collapsed to new lows after breaking below the 146.50 key level. The breakout triggered a sharp decline that saw bears break below the 144.01 support. Furthermore, the fall allowed the price to make a big swing from the 30-SMA, confirming strong bearish momentum. -If you are interested in knowing about scalping forex brokers, then read our guidelines to get started- However, the collapse also pushed the RSI into oversold territory. This extreme level allowed bulls to return to the 142.02 level for a retracement to the 144.01 level. Still, the price has made a triangle, a continuation pattern likely leading to a retest and break below the 142.02 support. https://www.forexcrunch.com/blog/2023/12/08/usd-jpy-outlook-yen-heads-for-a-stellar-week-against-the-dollar/
2023-12-07 10:12
Traders bet on the ECB starting rate cuts from March 2024. The euro is down 1% this week, marking its most significant weekly decline since May. US private payrolls rose less than anticipated in November. Thursday witnessed the euro descending to its lowest level in over three weeks, shaping a bearish EUR/USD outlook as traders bet on the ECB rolling out rate cuts starting in March 2024. Meanwhile, the dollar remained stable ahead of crucial payroll data this week. –Are you interested to learn more about forex options trading? Check our detailed guide- The euro is down 1% this week, marking its most significant weekly decline since May. Traders estimate an 85% likelihood of the ECB cutting interest rates in the March meeting. Moreover, they are pricing in nearly 150 basis points of easing by the end of next year. Meanwhile, a Reuters poll indicates that most economists expect the ECB to cut rates in the second quarter of next year. In an interview published on Wednesday, ECB member and Bank of France head Francois Villeroy de Galhau hinted at the possibility of a rate cut starting in 2024. Additionally, he cited a faster-than-expected disinflation. The ECB is expected to keep interest rates at the current record high of 4% next week. However, the focus will shift to officials’ comments about the rate outlook. Elsewhere, data showed that US private payrolls rose less than anticipated in November, signaling a gradual cooling in the labor market. Investors will closely monitor Friday’s non-farm payrolls data for a clearer view of the labor market. Softening economic data and comments from Fed officials have fueled expectations that the central bank is concluding its rate-increase cycle and might start cutting rates as early as March. EUR/USD key events today The US Initial Jobless Claims report EUR/USD technical outlook: Buyers ready for a comeback at 1.618 Fib extension After breaking below the 1.0851 key support level, EUR/USD has collapsed to the 1.0751 support. There is a solid bearish bias, supported by the 30-SMA, which trades far above the price. At the same time, the RSI has held near the oversold region, indicating strong bearish momentum. -If you are interested in knowing about scalping forex brokers, then read our guidelines to get started- However, the price has collapsed without making any significant retracements. Therefore, strong support might lead to a deeper pullback for EUR/USD before the downtrend continues. Notably, the price is near the key 1.618 fib extension level. This and the 1.0751 level will likely be strong enough to trigger a deep pullback. https://www.forexcrunch.com/blog/2023/12/07/eur-usd-outlook-euro-slips-to-3-week-low-on-rate-cut-bets/
2023-12-07 08:59
The bias is bearish as long as it stays below the median line. The US and Japanese data should be decisive tomorrow. The S2 stands as a static support. The USD/JPY price slumped well below yesterday’s low of 146.89. Fundamentally, the US dollar’s depreciation was expected after the US ADP Nonfarm Employment Change came in at 103K in November versus 131K expected, compared to 106K in October. –Are you interested to learn more about forex options trading? Check our detailed guide- In addition, the Trade Balance, Revised Nonfarm Productivity, and Revised Unit Labor Costs also reported poor data in the last session. Today, the JPY received a helping hand from the Japanese Leading Indicators indicator, which came in at 108.7%, above the 108.2% expected. Later, the US data could move the markets. The Unemployment Claims could jump from 218K to 221K in the last week. The data on Challenger Job Cuts, Consumer Credit, and Final Wholesale Inventories will also be released. The fundamentals will be critical to watch as the US releases the NFP, Unemployment Rate, and Average Hourly Earnings tomorrow. At the same time, Japan publishes the Economy Watchers Sentiment, Final GDP, Current Account, Household Spending, and Average Cash Earnings data. From the technical point of view, the USD/JPY price plunged after failing to approach the weekly pivot point of 147.69 or the upper median line (uml). It came back below the median line (ml) and seems determined to hit new lows. -If you are interested in knowing about scalping forex brokers, then read our guidelines to get started- The 145.00 psychological level stands as the first downside target. In addition, the weekly S2 of 144.67 represents potential static support. As long as it stays below the median line (ml), the rate could approach and reach the lower median line (LML). https://www.forexcrunch.com/blog/2023/12/07/usd-jpy-price-aiming-to-pounce-145-0-after-downbeat-us-adp/
2023-12-07 08:44
The Bank of Canada (BoC) maintained its key overnight rate at 5%. Canadian economic activity grew at its fastest pace in seven months in November. Canada recorded a larger-than-expected trade surplus of C$2.97 billion in October. The USD/CAD forecast suggests a positive shift favoring the pair as the Canadian dollar weakens after the BoC’s decision to maintain rates. On Wednesday, the Bank of Canada (BoC) kept its key overnight rate at 5%. Still, the bank indicated the possibility of another hike. Additionally, the BOC expressed ongoing concerns about inflation. –Are you interested to learn more about forex options trading? Check our detailed guide- Inflation in Canada fell to 3.1% in October, down from a peak of over 8% last year. However, it is still above the bank’s 2% target. Furthermore, the bank’s policy statement no longer included language from the previous policy about slow progress toward price stability and increased inflationary risks. Instead, the BOC highlighted that labor market pressures had gone down. Moreover, growth slowed in the middle of the year, indicating a drop in demand. Meanwhile, the dollar has stabilized this month following a 3% decline in November. It is stronger because of increased speculation of rate cuts by other central banks. The dollar index was just below Wednesday’s two-week peak of 104.23. On Wednesday, data revealed that US private payrolls rose less than anticipated in November, indicating a gradual cooling in the labor market. Meanwhile, according to data released on Wednesday, Canadian economic activity grew at the fastest pace in seven months in November. Additionally, Statistics Canada reported a larger-than-expected trade surplus of C$2.97 billion ($2.19 billion) in October. USD/CAD key events today US unemployment claims USD/CAD technical forecast: Bearish trend gives way to bullish momentum On the technical side, there has been a trend reversal from bearish to bullish. Buyers took charge at the 1.3500 support level after the RSI made a bullish divergence. Still, they did not show much strength at first. However, the price broke above the 30-SMA with a solid bullish candle. At the same time, the RSI crossed into bullish territory above 50. -If you are interested in knowing about scalping forex brokers, then read our guidelines to get started- However, the bullish move quickly paused at the 1.3600 key resistance level, leading to a consolidation. Moreover, the price is facing a strong resistance trendline. A break above this resistance zone would allow bulls to retest the 1.3700 key level. However, if the resistance holds, sellers might resume the downtrend. https://www.forexcrunch.com/blog/2023/12/07/usd-cad-forecast-loonie-loses-ground-after-bocs-pause/
2023-12-06 11:03
Data revealed US job openings fell to an over 2 ½ year low. There was a slight easing in the downturn of Eurozone business activity last month. Schnabel suggested the ECB could rule out further interest rate hikes. Wednesday’s EUR/USD forecast painted a bearish picture as the dollar stood tall near a two-week high against its peers. Meanwhile, investors digested US economic data indicating a cooling labor market, speculating that the Fed might implement rate cuts next year. Tuesday’s data revealed US job openings fell to an over 2 ½ year low. –Are you interested to learn more about forex options trading? Check our detailed guide- Elsewhere, there was a slight easing in the downturn of Eurozone business activity last month. However, a survey suggested that the bloc’s economy is poised to contract again this quarter. Moreover, the dominant services industry struggles to generate demand, and the last quarter saw a 0.1% contraction in the economy. The November Composite Purchasing Managers’ Index (PMI), released on Tuesday, pointed to a recurring contraction in the Eurozone this quarter. Consequently, it meets the technical definition of a recession. Meanwhile, European Central Bank (ECB) board member Isabel Schnabel indicated a dovish shift in response to a big fall in inflation. Furthermore, Schnabel advised against rates remaining steady through mid-2024 and suggested the ECB could rule out further interest rate hikes. As a result, expectations of a rate cut rose on Tuesday. Eurozone inflation dropped to 2.4% last month, down from over 10% a year earlier, following ten consecutive rate hikes. Consequently, it brought the ECB’s 2% inflation target into view and raised doubts about policymakers’ warnings of another two years of persistent price growth. EUR/USD key events today The US Private Employment Change report EUR/USD technical forecast: Bears zero in on 1.0751 as the next support The euro has fallen below the 1.0851 key level to make a new low, strengthening the bearish bias. The price trades well below the 30-SMA, and the RSI is oversold. Bears took over when the price made a strong candle that broke below the 30-SMA and the 1.0950 key level. Since then, the price has descended with shallow pullbacks. Bears are now targeting the next support at 1.0751. -If you are interested in knowing about scalping forex brokers, then read our guidelines to get started- However, bulls might soon resurface for a stronger pullback to retest the 30-SMA resistance since the price is currently oversold. It would be the first test since bears took control. Therefore, strong resistance at the SMA would mean bears have a firm hold on the current move and might continue below the 1.0751 support level. https://www.forexcrunch.com/blog/2023/12/06/eur-usd-forecast-dollar-hovers-close-to-a-two-week-peak/
2023-12-06 09:53
XAU/USD remains bearish if it stays below the 50% retracement level. The US data and the BOC should move the rate. A new lower low activates more declines. The gold price dropped as low as $2,009 in the last trading session, where it has found a demand again. The metal has rallied again and is trading at $2,026 at the time of writing. –Are you interested to learn more about forex options trading? Check our detailed guide- After its massive downside movement, a rebound was expected. The US dollar’s leg higher forced the yellow metal to drop. Further rise could drag the price of gold towards new lows. The XAU/USD turned to the upside after the US JOLTS Job Openings came in worse than expected yesterday. The indicator was reported at 8.73M, far below the 9.31M expected and compared to 9.35M in the previous reporting period. Gold rallied in the short term even though the US ISM Services PMI came in better than expected, while Final Services PMI matched expectations. Today, the Australian GDP reported only a 0.2% growth versus the 0.5% growth expected. Later, the US economic data and the BOC should move the rate. The Bank of Canada is expected to keep the Overnight Rate at 5.00%. Still, the BOC Statement could bring sharp movements. In addition, the US ADP Non-Farm Employment Change could be reported at 131K versus 113K in the previous reporting period. The gold price found support on the 61.8% (2,014) and the median line (ml) of the ascending pitchfork. The false breakdown revealed a bounce back. It has reached the supply zone from right below the 50% (2,040) retracement level. -If you are interested in knowing about scalping forex brokers, then read our guidelines to get started- The downside pressure remains high as long as it stays below this static resistance. Only jumping and stabilizing above the 50% retracement level could open the door for a larger rebound. On the other hand, dropping below 61.8% and under the median line, a new lower low activates more declines. https://www.forexcrunch.com/blog/2023/12/06/gold-price-rebounded-from-2009-amid-mixed-us-data/
