2023-11-02 09:18
The BOJ tiptoed away from its longstanding monetary stimulus program. The yen depreciated by approximately 0.8%. The dollar continued to be supported by the possibility of another Fed rate hike. The USD/JPY outlook is optimistic today, driven by the yen’s decline, which finds itself skimming the depths of a one-year low against the dollar. This change in fortune unfolded when the Bank of Japan (BOJ) tiptoed away from its longstanding monetary stimulus program. However, this cautious approach has left some investors yearning for more substantial measures. Notably, the BOJ announced its commitment to maintaining the 10-year government bond yield near 0%. However, they redefined 1.0% as a loose “upper bound” rather than a rigid cap. Furthermore, they eliminated their pledge to defend this level by buying an unlimited amount of bonds. Some analysts considered this a slow end to the BOJ’s controversial YCC regime. Still, the yen fell by nearly 0.8%, surpassing the 150 per dollar mark and reaching an intraday low of 150.26. The yen’s weakening had been anticipated, partly due to a Nikkei report on Monday suggesting that the BOJ might allow 10-year JGB yields to exceed 1%. Norihiro Yamaguchi, senior economist at Oxford Economics, stated, “The market had already priced in today’s decision due to the Nikkei article. Some had expected a complete elimination of YCC, which did not occur.” Meanwhile, the US dollar showed broad strength. The index appeared poised to end the month with minimal changes. Nonetheless, analysts pointed out that the dollar continued to be supported by the possibility of another Fed rate hike. It reflects the ongoing resilience of the US economy. USD/JPY key events today Investors expect one significant report from the US, The CB consumer confidence report. USD/JPY technical outlook: Bearish sentiment flips to bullish. USD/JPY 4-hour chart The USD/JPY price dipped to the 149.00 support level before pulling back sharply. Moreover, the sharp reversal broke above the 30-SMA and the key 150.00 resistance level. Similarly, the RSI dipped to near oversold levels before returning to trade in bullish territory. These moves indicate a sudden shift in market sentiment from bearish to bullish. However, for this shift to lead to a bullish trend, the price must start making higher highs and lows. That means a break above the 150.75 resistance level. Otherwise, the price might start a period of consolidation near the 150.00 key level. https://www.forexcrunch.com/usd-jpy-outlook-yen-slides-amid-boj-policy-shift/
2023-11-02 09:17
The dollar appears likely to end the month flat. Traders are anticipating the Bank of England’s (BoE) upcoming meeting on Thursday. British lenders approved the fewest home loans since January in September. The GBP/USD price analysis hints bullishness as the pound secured gains on Tuesday. The backdrop for this positive move was the dollar, which took a breather in anticipation of the upcoming FOMC meeting. The dollar appears likely to end the month flat. However, analysts highlight that the potential for another interest rate increase from the Federal Reserve is supporting the dollar. Moreover, they note the enduring strength of the US economy. On Monday, the pound remained relatively stable against the dollar. Traders were anticipating the Bank of England’s (BoE) upcoming meeting on Thursday, where it will likely keep rates unchanged. Notably, the British pound has struggled in currency markets recently due to diminishing risk appetite. This is due to stock market turbulence and conflict in the Middle East. Moreover, currency analysts have pointed out that deteriorating UK economic indicators have reinforced expectations that the BoE will maintain current rates. Elsewhere, BoE data released on Monday revealed that British lenders approved the fewest home loans since January in September. It signals a sluggish property market. Meanwhile, MUFG currency analysts noted that the BoE was probably at the peak of its rate-tightening cycle. Therefore, the focus will shift to “communication regarding the potential shift toward a more dovish stance in the upcoming meetings.” The analysts suggested that a significant shift was not imminent. Still, they acknowledged that most data released since the last meeting in September indicated weak economic activity. GBP/USD key events today With no significant reports coming from the UK, traders will focus on US releases, including: CB consumer confidence for October. GBP/USD technical price analysis: Price rebounds from 30-SMA support. GBP/USD 4-hour chart The GBP/USD pair is bouncing higher after retesting the 30-SMA support. At the same time, the RSI is pushing off the pivotal 50 level moving toward the overbought level. This move follows a failed attempt to break below the 1.2100 support level. Bulls took control by engulfing the candle from the 1.2100 support and breaking above the 30-SMA resistance. Moreover, they are now targeting the next resistance at 1.2200. A break above 1.2200 would strengthen the bullish bias. Furthermore, it would clear the path to retest the 1.2276 resistance. https://www.forexcrunch.com/gbp-usd-price-analysis-dollar-pauses-ahead-of-fomc/
2023-11-02 09:16
The bias is bullish in the short term, as the US dollar is bearish. US data should have a big impact today. Taking out the median line (ml) activates further growth. The EUR/USD price rallied in the short term as the US dollar is in a corrective phase. The price is trading at 1.0653, below today’s high of 1.0674. The upside pressure is high even though the Eurozone reports mixed data. The Eurozone CPI Flash Estimate rose by 2.9% less compared to the 3.1% growth estimate, while the Core CPI Flash Estimate reported a 4.2% growth as expected. In addition, German Retail Sales registered a 0.8% drop even if the traders expected a 0.5% growth, while German Import Prices rose by 1.6%, beating the 0.4% growth forecasted. Later, the US data should move the rate. The CB Consumer Confidence is expected to drop from 103.0 to 100.5, Chicago PMI could jump from 44.1 to 45.4, while the Employment Cost Index may report a 1.0% growth. Furthermore, the HPI could announce a 0.5% growth versus the 0.8% growth in the previous reporting period, while the S&P/CS Composite-20 HPI is expected to report a 1.8% growth. Tomorrow, the FOMC should shake the markets. The FED is expected to keep the Federal Funds Rate at 5.50%. Still, the FOMC Press Conference and the FOMC Statement represent high-impact events. Also, the ISM Manufacturing PMI and the JOLTS Job Openings should bring high action. EUR/USD Price Technical Analysis: At Resistance! EUR/USD hourly price chart Technically, the rate rallied after confirming the ascending pitchfork. Testing the lower median line (LML) signaled an upward movement. Now, it has reached the median line (ml), representing a dynamic resistance, an upside target, and the R1 (1.0660). We have a strong supply zone right above these upside obstacles. After such impressive growth, we cannot exclude a sell-off. Still, staying near the median line (ml) may announce an imminent breakout. Jumping and stabilizing above this dynamic resistance activates further growth. The upper median line (UML) is a major upside target. https://www.forexcrunch.com/eur-usd-price-pauses-upside-by-1-0675-eyes-on-fomc/
2023-11-02 09:16
The dollar was steady as investors awaited the FOMC policy decision. Eurozone prices increased by only 2.9% in October. The Eurozone economy contracted by 0.1% in the three months ending in September. The EUR/USD price analysis reveals a gloomy outlook as the pair struggles to recover from the recent lows triggered by the disappointing Eurozone inflation report on Tuesday. The dollar, on the other hand, holds steady as investors await the outcome of the FOMC policy meeting. Notably, inflation in the Eurozone is rapidly decreasing, and the economy has started contracting. It demonstrates the combined effects of continuous European Central Bank interest rate hikes. According to a flash reading by Eurostat, prices increased by only 2.9% in October. It marked the slowest pace since July 2021, when the ECB was still concerned about inflation remaining below its 2% target. However, the significant drop from double-digit figures just a year ago has consequences. The Eurozone economy contracted by 0.1% in the three months ending in September. Consequently, it is on the brink of entering a recession. Furthermore, these two pieces of data suggest that the ECB has likely concluded its series of interest rate hikes. Therefore, the central bank will now observe the effects of these hikes before considering further actions. Meanwhile, Yannis Stournaras, the Greek central bank governor and an ECB policymaker, noted the possibility of a rate cut around the middle of next year if inflation remains below 3%. EUR/USD key events today Investors are expecting a large number of economic events from the US, including, The FOMC policy meeting. The JOLTs job openings report. The ISM Manufacturing PMI report. The ADP Nonfarm Employment Change. EUR/USD technical price analysis: Bearish Momentum Grows, Targeting Key 1.0525 Support. EUR/USD 4-hour chart The EUR/USD price fell sharply after touching the 1.0675 resistance level. Consequently, the price broke below the 1.0600 key level and the 30-SMA. At the same time, the RSI fell below 50, signifying a shift to bearish sentiment. EUR/USD does not yet have a clear direction as the price has mostly chopped through the 30-SMA. This lack of direction can also be seen in the RSI, shifting between bullish and bearish territory. Currently, bears have seized control and are targeting the 1.0525 support. However, the price will only start a downtrend if the price breaks below 1.0525 and stays below the 30-SMA. https://www.forexcrunch.com/eur-usd-price-analysis-downbeat-eu-cpi-to-weigh-on-euro/
2023-11-02 09:14
Market participants expect that US interest rates will remain unchanged. The yen plunged 1.7% on Tuesday, reaching a one-year low of 151.74 per dollar. The Bank of Japan raised its inflation forecasts but left policy rates unchanged on Tuesday. The USD/JPY forecast witnessed a slightly bearish shift on Wednesday as the weak yen staged a comeback, fueled by renewed intervention threats from Japan. Additionally, investor attention shifted to a Federal Reserve policy meeting later in the day. Market participants expect that US interest rates will remain unchanged. However, the release of Treasury refunding details could influence the bond market. After plunging 1.7% on Tuesday, reaching a one-year low of 151.74 per dollar, the yen stabilized Wednesday. This stability followed straightforward comments from Japan’s top currency diplomat, Masato Kanda. He stated that “speculative trading seems to be the biggest factor behind recent currency moves.” As such, authorities were ready to respond. Notably, the Bank of Japan raised its inflation forecasts but left policy rates unchanged on Tuesday. Furthermore, it redefined the 1% limit on 10-year government bond yields as a reference rate rather than an absolute cap. Nevertheless, this policy adjustment did not close the substantial interest rate differentials between Japan and other countries. Meanwhile, Deutsche Bank macro strategist Alan Ruskin said the yen declined despite the BOJ’s adjustment. Consequently, the future of the dollar/yen rate will likely be determined by the dollar’s performance and the US economy. USD/JPY key events today The pair will likely have a volatile day as the US will release major reports like, ADP Nonfarm Employment Change (Oct) ISM Manufacturing PMI (Oct) JOLTs Job Openings (Sep) Fed Interest Rate Decision Get FREE Forex Signals Now! USD/JPY technical forecast: Rally hits a wall around 151.51 resistance. USD/JPY 4-hour chart On the charts, USD/JPY made a steep climb, breaking above the 30-SMA and key resistance levels. This rally has paused near the 151.51 resistance level, where bears are trying to drag the price lower. Meanwhile, the RSI rose to the overbought region before retreating. It indicates strong bullish momentum. Bears attempted to reverse the trend by pushing the price below the 30-SMA and the 150.00 key level. However, bulls have returned to the market more robustly, taking back control. Moreover, the price has posted a new high above the 150.75 level, continuing the previous bullish trend. The price will likely retest the 150.75 level as support before continuing higher. https://www.forexcrunch.com/usd-jpy-forecast-intervention-threats-pause-yens-decline/
2023-11-02 09:13
The FOMC should be decisive today. The XAU/USD could jump higher if it stays above $1,977. A new lower low activates more declines. The gold price turned to the downside in the short term, but a more extensive correction is far from being confirmed. The metal is trading at $1,983, far below yesterday’s high of $2,007. The yellow metal dropped to $1,975 today, where it found a slight demand again. The Bank of Japan left the policy rate unchanged in yesterday’s trading session. Still, the US economic data changed sentiment in the short term. Gold crashed after the US Employment Cost Index, HPI, S&P/CS Composite-20 HPI, and CB Consumer Confidence came in better than expected. Today, the US economic data should have a significant impact again. The ADP Non-Farm Employment Change is expected at 149K in October versus 89K in September. ISM Manufacturing PMI could remain at 49.0 points. At the same time, JOLTS Job Openings could drop from 9.61M to 9.34 M. Furthermore, the ISM Manufacturing Prices, Construction Spending, Final Manufacturing PMI, and Wards Total Vehicle Sales data will also be released. However, the FOMC represents the most important event of the week. The FED is expected to keep its monetary policy today, but the FOMC Press Conference and FOMC Statement should bring aggressive movements. Gold Price Technical Analysis: $1,977 Key Support Gold price hourly chart Technically, the price found strong resistance at $2,009, then turned to the downside. The metal has formed a rising wedge pattern. XAU/USD dropped below the uptrend line and has now found temporary demand on the $1,977 former low. The yellow metal could return higher if it stays above it. The weekly pivot point of $1,989 and the broken uptrend line represent upside obstacles. Taking out the $1,977 and making a new lower low activates more declines and activates the Rising Wedge formation. https://www.forexcrunch.com/gold-price-playing-in-rising-wedge-focus-on-fomc/
