2023-10-27 09:35
The ECB concluded a prolonged sequence of 10 consecutive rate hikes. The Eurozone economy is showing a significant slowdown. Investors increased their expectations for ECB rate cuts. The EUR/USD price analysis points south as the ECB held steady on interest rates. It concluded a prolonged sequence of 10 consecutive rate hikes. However, the ECB firmly stated that the growing talk of rate cuts in the market was premature. -Are you interested in learning about the forex signals telegram group? Click here for details- In its efforts to curb rapid price increases, the ECB has raised rates by 4.5 percentage points since July 2022. However, the bank pledged a pause last month as the exceptionally high borrowing costs began affecting the economy. With price pressures diminishing, inflation dropping by more than half within a year, and the economy showing a significant slowdown, a recession is possible. This scenario makes additional rate hikes unlikely. ECB President Christine Lagarde, repeating the guidance from six weeks ago, hinted at a steady policy in the near future. However, she offered little additional direction. She even left the door slightly ajar for the potential of future rate hikes, though as a distant possibility. Lagarde argued that the Eurozone economy appeared weak, possibly even weaker than predicted last month. However, she emphasized that price pressures remained robust. Moreover, they could intensify if the conflict in the Middle East led to increased energy costs. Despite her efforts to resist expectations of rate cuts, she couldn’t sway market sentiment. Investors remained unconvinced and increased their expectations for rate cuts, characterizing the guidance as “dovish.” Currently, markets indicate a significant likelihood of the ECB initiating interest rate cuts in April. EUR/USD key events today Investors are awaiting core inflation data with two major components, The core PCE price index (MoM) The core PCE price index (YoY) EUR/USD technical price analysis: 1.0525 support holds firm for now. The EUR/USD price is bearish on the charts as the price has fallen below 30-SMA. It has paused at the 1.0525 support level, where bulls are trying a rebound. However, with the price below the SMA and the RSI under 50, it will be hard for bulls to maintain the recovery. -Are you interested in learning about forex indicators? Click here for details- The highest price before bears return is the 30-SMA and the 1.0600 resistance level. A break above this zone would confirm a bullish takeover. However, given the bearish bias, the price will likely bounce lower to retest the 1.0525 and the 1.0500 support levels. https://www.forexcrunch.com/eur-usd-price-analysis-ecb-keeps-interest-rates-unaltered/
2023-10-27 08:30
Over the past three months, the pound has fallen by more than 6% against the US dollar. Money markets are pricing in no further BoE rate hikes. British retailers reported their worst October for sales volumes on record. Friday’s GBP/USD outlook is pessimistic as bearish sentiment persists near three-week lows amid dampened BoE rate hike expectations. Recently, economic data has reinforced the expectation that the Bank of England will hold rates unchanged at its upcoming policy meeting. -Are you interested in learning about the forex signals telegram group? Click here for details- According to Kirstine Kundby-Nielsen, an analyst at Danske Bank, the pound’s recent decline can be attributed to the BoE’s dovish comments. Moreover, there has been weaker-than-expected UK data and a growing market consensus that another rate hike is unlikely. Notably, the pound has fallen by more than 6% over the past three months against the US dollar. Meanwhile, data from Tuesday revealed a loosening labor market. Moreover, the flash reading of the S&P Global UK Purchasing Managers’ Index (PMI) for the services sector dropped to 49.2 in October. There was unexpected stability in September’s inflation at 6.7%, the highest among major advanced economies. However, the BoE is widely expected to maintain rates at 5.25% on November 2. Currently, money markets are pricing in no further rate hikes and are even considering rate cuts as early as June next year. Last Friday, BoE Governor Andrew Bailey stated that September’s inflation data was close to the central bank’s expectations. Further underscoring the economic challenges, British retailers reported their worst October for sales volumes on record. Moreover, they anticipate another tough month in November. This decline came as households grappled with the rising cost of living. GBP/USD key events today The US will release a significant inflation report comprising the following: Core PCE Price Index (MoM) Core PCE Price Index (YoY) GBP/USD technical outlook: Price hits a new low below 1.2100. The bias for GBP/USD on the 4-hour chart is bearish as the price made a lower low when it breached the 1.2100 key level. Although it has pulled back to trade above 1.2100, the bias remains strong as the price is below the 30-SMA. -Are you interested in learning about forex indicators? Click here for details- Additionally, the RSI shows strong bearish momentum trading below 50. Bears look prepared to continue the downtrend by retesting the 1.2100 support. A break below this support would push the price to retest the 1.2050 support, making a lower low. https://www.forexcrunch.com/gbp-usd-outlook-boe-rate-hike-prospects-weigh-on-pound/
2023-10-26 08:43
The Australian dollar reached a roughly two-week high after Australia’s inflation report. There is a 66% probability of a quarter-point increase to 4.35%. Business activity in the US improved significantly. After an unexpectedly robust inflation report, the AUD/USD price analysis took a bullish turn. The Australian dollar strengthened due to expectations of interest rate hikes. It surged to 0.7%, reaching a roughly two-week high of $0.6400 on Wednesday. Notably, Australia’s consumer price index increased by 1.2% in the third quarter. It surpassed the market expectations of 1.1% and was up from a 0.8% rise in the previous quarter. Consequently, traders began seeing higher chances of a potential interest rate hike by the RBA following four rate pauses next month. Futures markets are now placing a 66% probability of a quarter-point increase to 4.35%, up from 35% before the data release. Meanwhile, two major Australian banks, the Commonwealth Bank of Australia and ANZ, shifted their stance on Wednesday. They abandoned their previous view of a rate pause. Both now anticipate a quarter-point hike in November. Such a move would position the RBA as one of the few central banks in the developed world still pursuing a tightening policy. Meanwhile, markets believe the US Federal Reserve and the European Central Bank have completed their rate hikes. Elsewhere, business activity in the US improved significantly. S&P Global reported on Tuesday that its flash US Composite Purchasing Managers Index reached its highest level since July. This development might give the US Federal Reserve more flexibility to maintain elevated interest rates. AUD/USD key events today Investors are expecting several important reports from the US, including: The building permits report. The new home sales report. A speech from Fed Chair Jerome Powell. AUD/USD technical price analysis: Bulls’ key to uptrend lies at 0.6400. AUD/USD 4-hour chart On the charts, Aussie is bullish as the price shot up from the 0.6350 support level to the 0.6400 resistance. A strong move occurred above the 30-SMA, showing that the bulls are in control. Additionally, there is support from the RSI, which trades in bullish territory. However, on a larger scale, the price has been stuck in a sideways move, chopping through the SMA. Therefore, this may continue if bears take over at 0.6400 resistance. For the price to start trending up, bulls must break above the 0.6400 resistance. https://www.forexcrunch.com/aud-usd-price-analysis-surprising-inflation-bolsters-aussie/
2023-10-26 08:43
There is anticipation ahead of a Bank of Canada policy decision. US economic data revealed an increase in business output in October. Canadian new home prices fell by 0.2% in September. Wednesday’s USD/CAD forecast shines with optimism as the Canadian dollar continues its collapse against the US dollar. This decline comes amid a growing interest rate advantage for the US dollar, fueled by improved US economic data. Moreover, there is anticipation ahead of a Bank of Canada policy decision. Aaron Hurd from State Street Global Advisors noted, “We are a little bit frozen going into the BoC meeting. However, since July, there has been a consistent weakening trend for the CAD against the US dollar.” Furthermore, he said, “I think the US will maintain that rate advantage for at least the next several quarters over Canada. The US economy is not showing the slowing we’ve seen in the Canadian economy.” On Tuesday, US economic data revealed an increase in business output in October. Manufacturing emerged from a five-month decline, boosting the US dollar against a basket of major currencies. Meanwhile, the spread between Canada’s 2-year yield and its US equivalent widened to 36.8 basis points, the widest gap since April 28. The Canadian yield fell further by 2.3 basis points. Additionally, Canadian new home prices fell by 0.2% in September compared to August and were down 1% annually, according to Statistics Canada. USD/CAD key events today It is a big day for USD/CAD as investors will watch the Bank of Canada policy meeting. Moreover, there will be key reports from the US, including: Building permits. New home sales. Crude oil inventories. A speech from Fed Chair Powell. USD/CAD technical forecast: Bulls secure their position above 1.3701. USD/CAD 4-hour chart The USD/CAD pair has finally made a new high on the 4-hour chart. This move signals a continuation of the bullish trend and strengthens the bullish bias. Moreover, bulls have now found their footing above the 1.3701 key level. The first time the price broke above this level, it struggled to continue higher. Consequently, there was consolidation around the level until the price found support at 30-SMA. At the moment, bulls are making stronger candles above the 1.3701 level. Therefore, the uptrend will likely soon reach the 1.3800 resistance level. https://www.forexcrunch.com/usd-cad-forecast-bulls-picking-up-amid-rate-differential/
2023-10-26 08:42
The bias remains bearish despite the last rebound. The BOC could have a big impact on the USD today. Taking out the pivot point activates further drop. The EUR/USD price pared gains on Wednesday, continuing yesterday’s momentum. The pair is trading at 1.0575 versus yesterday’s high of 1.0694. The dollar’s dominance forces risky assets to depreciate. The price maintains a bearish bias despite temporary rebounds. Fundamentally, the greenback took the lead after the United States Flash Manufacturing PMI and Flash Services PMI confirmed expansion yesterday. On the other hand, the Eurozone, German, and French services and manufacturing sectors remained deep in contraction territory. Today, the German ifo Business Climate came in at 86.9 points, versus 85.9 points expected and compared to 85.8 points in the previous reporting period. In addition, the M3 Money Supply reported better than expected data, while Private Loans disappointed. Later, the BOC is seen as a high-impact event that could really shake the markets. The overnight rate is expected to remain at 5.00%. Still, the BOC Press Conference could bring sharp movements. Furthermore, Fed Chair Powell Speaks, ECB President Lagarde Speaks, and US New Home Sales should have an impact on the greenback. EUR/USD Price Technical Analysis: Rebound Ended EUR/USD price hourly chart From the technical point of view, the EUR/USD pair found resistance at the confluence area formed at the intersection between the lower median line (LML) of the ascending pitchfork with the R2 (1.0680). Now, it has dropped below the warning line (WL), which represents dynamic support. Staying on this obstacle announced an imminent breakdown. It challenges the weekly pivot point of 1.0570. Taking out this downside obstacle announces more declines. The 1.0600 psychological level represents a supply zone. Retesting it may result in a new sell-off. https://www.forexcrunch.com/eur-usd-price-corrects-further-as-greenback-leads-the-market/
2023-10-26 08:41
The Japanese yen surpassed 150 per dollar. Japanese Finance Minister Shunichi Suzuki cautioned traders against selling the yen. The yen has depreciated by over 20% since the Fed initiated rapid rate hikes. Thursday’s USD/JPY forecast points to bullish sentiments as the greenback stands tall, lingering near a two-week peak, powered by the surge in Treasury yields. Simultaneously, the Japanese yen surpassed 150 per dollar, leaving traders apprehensive about potential intervention. Notably, the Japanese yen hit a new one-year low of 150.48 per dollar. The level is not far from the 32-year low of 151.94 per dollar recorded in October last year, which prompted Japanese authorities to intervene in the currency market. On Thursday, Japanese Finance Minister Shunichi Suzuki cautioned traders against selling the yen again. Additionally, he emphasized that authorities were closely monitoring market movements. He stated, “I’m closely observing market developments with a sense of urgency.” However, he did not directly comment on the possibility of intervention. Meanwhile, the interest rate gap between Japan and the United States has widened, leading to continuous yen weakness. Furthermore, the yen has depreciated by over 20% since the US Federal Reserve initiated rapid rate hikes in March 2022 to combat inflation. Meanwhile, the Bank of Japan remains an outlier among central banks, adhering to its ultra-loose monetary policy. Carol Kong from the Commonwealth Bank of Australia highlighted that US GDP data is a significant event for the dollar/yen exchange rate. A robust report may exert upward pressure on US yields and lead to the yen testing new lows. USD/JPY key events today Traders are expecting major releases from the US, including: Core durable goods orders. Gross Domestic Product. Initial jobless claims. Pending home sales. USD/JPY technical forecast: 150.00 resistance broken USD/JPY 4-hour chart The USD/JPY price has finally punctured the 150.00 key resistance level in a sharp, bullish move. The price was trading between the 149.50 support and the 150.00 resistance levels for a long time. However, it stayed mostly above the 30-SMA, a sign that bulls held control. One false breakout below the SMA led to a resurgence in bullish momentum that saw the RSI push to the overbought region. Moreover, the price broke above the 150.00 and 150.51 resistance levels. Bulls look set to take out higher resistance levels as the price pushes farther above the 30-SMA. https://www.forexcrunch.com/usd-jpy-forecast-marks-fresh-2-week-high-amid-rising-yields/
