2023-09-05 09:52

Australia’s central bank held rates steady for a third consecutive month. The Australian dollar depreciated, reaching its lowest point in over a week. Market expectations for one last rate hike before year-end decreased from around 36% to just 30%. Today’s AUD/USD outlook is bearish as Australia’s central bank held rates steady for a third consecutive month. Moreover, it signaled a potential end to the tightening cycle as policymakers displayed greater control over prices. During the September policy meeting, the Reserve Bank of Australia (RBA) maintained rates at 4.10%. Furthermore, it stated that recent data align with the goal of inflation returning to the 2–3 percent target range by late 2025. However, it emphasized the possibility of further tightening to rein inflation. Still, the central bank opted for a pause given underwhelming economic indicators, such as inflation, wages, and employment. As a result, the Australian dollar depreciated, reaching $0.6384, marking its lowest point in over a week. Meanwhile, market expectations for one last rate hike before year-end decreased from around 36% to just 30% during the session. Although most economists still anticipate one more hike by year-end, Lowe emphasized the need for continued monitoring of the global economy. He emphasized attention to uncertainties surrounding the Chinese economy, household spending, and the inflation and labor market outlook. Moreover, Lowe highlighted the significant rise in prices for various services and elevated rent inflation. Minutes from the August meeting revealed that the central bank now envisions a credible path to achieve the inflation target by 2025 at the current interest rate level. This implies a high threshold for further rate hikes. AUD/USD key events today Investors will continue absorbing statements from the RBA policy meeting as no other key economic releases are planned for the day. AUD/USD technical outlook: Price plummets, breaching key support levels. AUD/USD 4-hour chart On the charts, AUD/USD has fallen suddenly, breaking below the 0.6450 and the 0.6400 support levels. This steep decline has left the 30-SMA far above, indicating a strong bearish move. Moreover, the RSI is about to dip into the oversold region, showing solid bearish momentum. The price is now heading for the next support at 0.6350. If bears are still as strong at this level, the price will likely break below and continue the descent. However, if they are exhausted, the price might pause at 0.6350. https://www.forexcrunch.com/aud-usd-outlook-aussie-dips-as-rba-holds-rates-for-3rd-month/

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/