2023-09-01 09:44

The dollar reached a one-week low against the yen due to declining Treasury yields. Japan’s finance minister gave no clear indication of intervening in the market. The weaker yen attracts more foreign tourists, boosting Japan’s services sector. Today’s USD/JPY outlook is bearish. The dollar reached a one-week low against the yen due to declining Treasury yields. This occurred after a turbulent week in which weak economic data raised doubts about the prospects of additional Fed interest rate increases. Moreover, the dollar was set to end a six-week winning streak against major currencies. A crucial monthly US jobs report is approaching that will likely influence Federal Reserve policy in the short term. Elsewhere, Japanese Finance Minister Shunichi Suzuki stated that markets should determine currency values, even though abrupt fluctuations are undesirable. However, he gave no clear indication of intervening in the market to support the weakening yen. Notably, Suzuki emphasized, “Currency values should mirror economic fundamentals. I am closely monitoring currency movements,” adhering to the established official stance. Some market participants expressed surprise at the lack of resolve to prevent the yen from dropping below 145 yen per dollar. A breach of this level in September triggered Japan’s first yen-buying intervention in 24 years. Meanwhile, speculation lingers in currency markets that Japanese authorities may shift their approach to the weak yen. They might focus on fiscal measures like maintaining a gasoline subsidy to mitigate the impact of price increases on consumers. Additionally, authorities contend that the weaker yen attracts more foreign tourists, boosting the services sector. Another possibility is that Japan may struggle to gain US approval for a dollar-selling intervention. USD/JPY key events today The important US nonfarm payroll day is finally here. Investors will get data on US employment numbers and the unemployment rate. Moreover, there will be an ISM Purchasing Managers Index report. USD/JPY technical outlook: Price shifts gears as bears take charge. USD/JPY 4-hour price chart On the technical side, USD/JPY has gone from bullish to bearish. This shift in bias came after the price broke below the 30-SMA and the RSI fell into bearish territory below 50. Moreover, the price fell below the 146.00 key support level. Currently, bears are heading for the next support at 145.00. A break below this level would further confirm the new bearish bias. However, if the level holds, bulls might return to retest the 146.00 level. https://www.forexcrunch.com/usd-jpy-outlook-falling-yields-trigger-bearish-momentum/

2023-08-30 10:10

The price seems heavy as DXY is still bullish. Taking out the 1.2620 activates more declines. The Jackson Hole Symposium could really shake the markets. The GBP/USD price continues to slide and has reached 1.2687 as of now. The pair experienced high volatility yesterday, following the release of disappointing economic data from both the UK and the US. However, the short-term outlook remains unclear. The UK and the US Flash Manufacturing PMI and Flash Services PMI both missed the market expectations, indicating a slowdown in economic activity. However, the US services sector still showed some resilience, as it remained in the expansion territory, unlike the UK, which slipped into contraction. This gave some support to the greenback, which also benefited from the better-than-expected US New Home Sales, which came in at 714K versus 705K forecasted. Today, the British pound faced another blow, as the UK CBI Realized Sales plunged to -44 points, much lower than the -25 points anticipated. This suggests a sharp decline in the retail sales volume in August. Later today, the market participants will be closely watching the US Durable Goods Orders, Core Durable Goods Orders and Jackson Hole Symposium for further clues on the economic recovery and the monetary policy stance. Positive US data could boost the USD further and put more pressure on the GBP/USD pair. Tomorrow, the Fed Chair Powell and the ECB President Lagarde will deliver their speeches at the Jackson Hole Symposium, which could have a significant impact on the market sentiment and volatility. Traders should be prepared for any surprises and adjust their positions accordingly. GBP/USD Price Technical Analysis: Rangebound GBP/USD price hourly chart The GBP/USD pair is stuck in a narrow range, as the market awaits more clarity on the economic and monetary outlook. The pair has been trading between the 1.2792 and 1.2620 levels for the past few days, showing no clear direction. However, some technical signals suggest that the pair could be ready for a bearish breakout soon. As shown on the H1 chart, the pair has broken below the minor ascending pitchfork, which was supporting the previous uptrend. This indicates a loss of bullish momentum and a possible reversal. The pair has bounced back from the range’s support at 1.2620, but failed to sustain above the broken lower median line (lml) of the pitchfork, which now acts as a resistance. This confirms the bearish scenario and signals a new wave of selling pressure. The immediate target for the bears is the 1.2620 level, which is the key support of the range. A decisive break below this level would confirm the bearish breakout and open the door for further declines. The next targets could be 1.2580 and 1.2530, which are previous swing lows. On the other hand, if the pair manages to stay above the 1.2620 level and forms a false breakout, it could indicate a lack of selling conviction and a possible rebound. In that case, the bulls could aim for the upper boundary of the range at 1.2792, which is also near the upper median line (uml) of the pitchfork. A break above this level would invalidate the bearish scenario and resume the uptrend. https://www.forexcrunch.com/gbp-usd-price-dips-below-1-27-ahead-of-jackson-hole/

2023-08-30 10:07

Powell’s speech might provide insights into the direction of interest rates. The Bank of Japan might begin reducing its substantial monetary easing in a year. Japan needs continuous wage growth to achieve inflation driven by economic expansion. Today’s USD/JPY outlook is bullish. The US dollar strengthened, reaching a more than two-month high. Moreover, it is on track for its sixth consecutive week of gains. Notably, investors are seeking safety in the dollar as they await a speech from Federal Reserve Chair Jerome Powell. The speech will likely provide insights into the direction of interest rates. The Jackson Hole Economic Policy Symposium will host Powell’s address on monetary policy at 10:05 a.m. ET. Furthermore, the speech will likely determine whether the Fed has concluded its rate hikes and the projected duration of elevated interest rates. Meanwhile, most economists surveyed by Reuters predict that the BOJ will begin reducing its substantial monetary easing in a year. Moreover, speculation about future policy changes has lessened since a surprise adjustment to the yield control last month. During the July 27-28 meeting, the BOJ altered its yield curve control strategy. Consequently, this modification permits more flexible increases in interest rates. The markets interpret this as a step towards gradually removing decades of stimulus. Meanwhile, Takumi Tsunoda from the Shinkin Central Bank Research Institute suggests that the BOJ might maintain the current approach until next summer. This approach aligns with the uncertainty surrounding Japan’s wage trends for fiscal year 2024, which will only become apparent after spring. Japanese policymakers emphasize the necessity of continuous wage growth to achieve inflation driven by economic expansion. USD/JPY Key Events Today Investors eagerly anticipate a speech from Fed chair Powell at the Jackson Hole symposium. This speech will probably have clues on the Fed’s interest rate path. USD/JPY Technical Outlook: Bulls To Challenge 146.51 Resistance. On the charts, USD/JPY is chopping through the 30-SMA, showing a lack of direction. At the same time, the price oscillates in a range with support at 145.00 and resistance at 146.51. This consolidation comes after a bullish trend and might, therefore, be a pause before the uptrend continues. https://www.forexcrunch.com/usd-jpy-outlook-investors-flock-to-dollar-ahead-of-powell/

2023-08-17 09:18

The Commerce Department reported a significant 0.7% surge in U.S. retail sales. Canada’s yearly inflation rate surged beyond expectations to 3.3% in July. There are increased expectations for a quarter-percentage-point BOC rate hike in September. Today’s USD/CAD forecast is slightly bearish. Although the dollar fell, it remained close to a one-month top hit on Monday. Following positive U.S. data, the recent dollar rally was attributed to elevated bond yields. The Commerce Department reported a significant 0.7% surge in U.S. retail sales last month. This showcased enduring demand despite the Fed’s aggressive interest rate increases designed to control inflation. The resilience in the economy is due to robust wage growth from a tight labor market. Elsewhere, Canada’s yearly inflation rate surged beyond expectations to 3.3% in July, as data revealed on Tuesday. The persistent elevation of core indicators scrutinized by the central bank heightens the probability of another interest rate hike. Meanwhile, analysts had predicted a rise in inflation to 3.0% from June’s 27-month low of 2.8%. According to Statistics Canada, the consumer price index marked a 0.6% increase on a monthly basis, surpassing the projected 0.3% uptick. Additionally, the average of two core measures of underlying inflation settled at 3.65%, compared to June’s 3.70%. After the inflation data release, the money markets saw increased expectations for a quarter-percentage-point rate hike in September. The probability surged from 22% to 35% immediately after the data’s release and later stabilized at a 31% chance. USD/CAD Key Events Today Data from the US that will likely move the pair today include the building permits report, and the US crude oil inventories report. Moreover, investors will focus on the FOMC meeting minutes. USD/CAD Technical Forecast: Bears Emerge As Price Encounters Resistance At 1.3500. USD/CAD 4-hour chart On the charts, USD/CAD has hit resistance at 1.3500, where bears have emerged. Still, the bias is bullish because the price is above the 30-SMA, while the RSI supports bullish momentum over 50. At the same time, there is a chance the trend will soon reverse as the RSI has made a bearish divergence with the price. This indicates waning enthusiasm to push the price higher. This divergence could also lead to a deep pullback to retest the 1.3400 support. https://www.forexcrunch.com/usd-cad-forecast-bulls-retained-at-1-35-focus-on-fomc/

2023-08-17 09:17

The bias remains bearish as long as it stays below the downtrend line. Only a valid breakout through the downtrend line validates a larger growth. The FOMC Meeting Minutes should bring sharp movements today. The gold price bounced back, trading at $1,905 at the time of writing. Greenback’s temporary retreat helped the yellow metal to rebound in the short term. Still, the bias remains bearish, so more declines are still possible. The USD’s rally could force the price of gold to drop again. Fundamentally, the US Retail Sales reported a 0.7% growth versus the 0.4% growth estimated, while Core Retail Sales increased by 1.0%, beating the 0.4% growth forecasted in the last trading session. Furthermore, the Canadian Consumer Price Index registered a 0.6% growth, beating the 0.3% growth expected. Today, the RBNZ left the monetary policy unchanged. The Official Cash Rate remained at 5.50% as forecasted, while the UK CPI and Core CPI reported higher-than-expected inflation. Later, the US will release the Industrial Production, Capacity Utilization Rate, Housing Starts, and Building Permits indicators that could come in better than the previous reporting period. Still, the FOMC Meeting Minutes is seen as the most important event. A hawkish report could boost the USD and push the XAU/USD down again. Gold Price Technical Analysis: Rebound in play Gold price hourly chart From the technical point of view, the price action developed a major Falling Wedge pattern which is still far from being confirmed. As long as it stays below the downtrend line, the price could drop again as the outlook is bearish. As you can see on the hourly chart, the XAU/USD found strong support on the downside line and the S1 (1,900). The yellow metal registered only false breakdowns signaling that the sell-off ended and buyers could take it higher. Still, only taking out the downtrend line should announce a larger rebound and could bring us new longs. https://www.forexcrunch.com/gold-price-to-break-falling-wedge-pattern-eying-fomc/

2023-08-17 09:16

Data revealed an unexpected decrease in Australia’s employment numbers for July. There’s speculation that the RBA might halt its interest rate hikes. There are divisions among Fed officials regarding the necessity of further rate hikes. Today’s AUD/USD forecast is bearish. The Australian dollar dropped to its lowest point in nine months, also pulling the New Zealand dollar down. This decline followed data release revealing an unexpected decrease in Australia’s employment numbers for July. Moreover, there was a rise in the jobless rate. This increase in the jobless rate suggests a possible loosening of the previously tight labor market. Furthermore, the surprising data sparked speculation that the Reserve Bank of Australia (RBA) might halt its interest rate hikes. Consequently, the local dollar fell to a nine-month low, reaching $0.6366. Figures given by the Australian Bureau of Statistics (ABS) on Thursday indicated a net loss of 14,600 jobs in July compared to June. This reversal contradicted market expectations of a 15,000 increase in jobs. Notably, all these job losses occurred in the full-time job sector, which experienced a drop of 24,200 positions. Moreover, the jobless rate increased from 3.5% to 3.7%, exceeding analysts’ forecasts of 3.6% and marking the highest rate since April. Nonetheless, at first glance, the report seemed to align with the RBA’s argument for a potential “turning point” in the market. This shift could help alleviate inflationary pressures. The central bank has already put its rate hikes on hold for the past two months, and investors speculate that the tightening cycle might be ending. Futures markets suggest only a 50-50 chance of one more quarter-point rate hike to reach 4.35% by year-end. Elsewhere, minutes from the Fed’s July policy meeting revealed divisions among officials regarding the necessity of further rate hikes. AUD/USD Key Events Today The US will release key reports, including the initial jobless claims and the Philadelphia Fed Manufacturing reports. AUD/USD Technical Forecast: Price Decline Reflects Renewed Bearish Enthusiasm. AUD/USD 4-hour chart On the charts, AUD/USD has made new lows after dropping and crossing below the 0.6400 support level. Moreover, this decline has greatly swung away from the 30-SMA, showing renewed enthusiasm among bears. This has also seen the RSI drop to near the oversold region. However, the price will likely pause near the 0.6400 key level before seeking lower support levels. https://www.forexcrunch.com/aud-usd-forecast-aussie-to-9-month-lows-as-employment-dips/