2023-08-09 09:44

British retailers witnessed their slowest sales growth in 11 months in July. On August 2, the Bank of England (BoE) raised interest rates for the 14th consecutive time. Speculators decreased their bullish positions on the sterling for the second consecutive week. Today’s GBP/USD price analysis is bearish. On Tuesday, the pound experienced a decline. However, it managed to stay above the lows of the previous week that had lasted for a month. Notably, a survey indicated that British retailers witnessed their slowest sales growth in 11 months in July. The reason behind this was attributed to rainy weather and high inflation. The British Retail Consortium (BRC) reported a 1.5% increase in retail sales values compared to last year. This growth rate is less than half the 12-month average, 3.9%. Moreover, it marks a decrease from this year’s high point of 5.2% in February. On August 2, the Bank of England (BoE) raised interest rates for the 14th consecutive time. Furthermore, it announced that borrowing costs would remain elevated due to the enduring presence of inflation. However, investors are shifting their focus toward the bleak prospects of the UK economy. According to assessments from the money markets, they are banking on a maximum of two additional rate hikes from the BoE. Meanwhile, in the week leading up to August 1, speculators decreased their bullish positions on the pound for the second consecutive week. The Commodity Futures Trading Commission data does not include positions taken following the BoE’s rate decision. On the other hand, asset managers reduced their long pound positions by half from the previous week’s record high. GBP/USD Key Events Today After the retail sales report, there won’t be more major economic releases from the UK or the US. Consequently, the pair might consolidate as investors await more data. GBP/USD Technical Price Analysis: Price Retests 30-SMA As 1.2775 Resistance Holds Firm. GBP/USD 4-hour chart GBP/USD is testing the 30-SMA support on the charts after failing to go above the 1.2775 resistance level. There was a short-lived shift in sentiment to bullish when the price broke above the 30-SMA resistance, and the RSI crossed above 50. However, bulls could not break above 1.2775. If the 30-SMA holds firm as support, bulls will likely make another attempt at the resistance. Still, if the price breaks below the SMA, bears will regain control with the next targets at 1.2700 and 1.2603. https://www.forexcrunch.com/gbp-usd-price-analysis-pound-dips-after-slow-retail-growth/

2023-07-31 08:54

The yen will likely end July with its first monthly increase since March. The BOJ made its bond yield curve control (YCC) policy more flexible. The annual US inflation rate rose at its slowest rate in over two years in June. Today’s USD/JPY forecast is bullish. On Monday, the yen experienced a decline, continuing the losses it faced during a volatile session at the end of the previous week. Despite this, it seemed poised to end July with its first monthly increase since March. The Japanese currency went into a tailspin on Friday as traders tried to interpret the implications of the Bank of Japan’s (BOJ) decision. Notably, the BOJ made its bond yield curve control (YCC) policy more flexible. Furthermore, it loosened its defense of a long-term rate cap during its policy meeting while maintaining ultra-low rates. By the end of the Friday session, the dollar had gained 1.2% against the yen. However, it had previously slipped 1% to a session low of 138.05 yen. According to Chris Weston, head of research at Pepperstone, the BOJ’s adjustment to YCC was unexpected. However, it proved to be a brilliant move by the central bank. It allowed them to manage the potential volatility that could have resulted from a direct change to a -/+ 1% range in the YCC band. Meanwhile, the dollar index rose but was on track for a monthly decline of around 1%, marking its second consecutive month of losses. On Friday, data showed that the annual US inflation rate had risen at its slowest rate in over two years in June. Moreover, underlying price pressures receded, reducing the pressure on the Federal Open Market Committee (FOMC) to continue raising interest rates. USD/JPY Key Events Today Investors are not expecting big economic releases from the US or Japan today. Therefore, they will keep digesting the BOJ policy tweak. USD/JPY Technical Forecast: Bulls Reclaim 30-SMA And RSI Momentum. USD/JPY 4-hour chart On the charts, USD/JPY has returned above the 30-SMA, showing a return of bullish control. At the same time, the RSI shows a return of bullish momentum above 50. However, the price must start making higher highs to confirm a new bullish trend. At the moment, bulls are facing the 142.05 resistance level. A break above this resistance would make a higher high, confirming the start of a bullish trend. However, if the resistance holds, the price will pull back and likely enter into a consolidation period. https://www.forexcrunch.com/usd-jpy-forecast-yens-recovery-in-sight-despite-a-decline/

2023-07-12 06:58

The currency pair could extend its sell-off after taking out the near-term support levels. The fundamentals should move the price tomorrow. After its massive drop, a rebound could be natural. The USD/JPY price crashed quickly as the week started. The sellers seem determined to hit new lows. The price is at 140.22, far below Friday’s high of 145.07. The Japanese Yen took full control as the Yen Futures rallied. On the other hand, the US dollar depreciated versus all its rivals. The greenback lost significant ground versus its rivals as the NFP came in worse than expected on Friday. Surprisingly or not, the JPY appreciated even though the Economy Watchers Sentiment, Current Account, and Bank Lending came in worse than expected. Today, Japan reported mixed data, while the US NFIB Small Business Index reported positive data. Tomorrow, Japan is to release the PPI and Core Machinery Orders. The US inflation figures represent the most important event. The US Consumer Price Index is expected to report a 0.3% versus 0.1% growth in the previous reporting period, while Core CPI could register a 0.3% growth. In addition, the BOC could also have a big impact on the USD. USD/JPY Price Technical Analysis: Massive Drop USD/JPY price hourly chart The USD/JPY pair failed to reach the median line (ML) of the ascending pitchfork. Now it has turned to the downside. The pair has ignored the 23.6% (141.45) and the lower median line (LML). These represented major downside obstacles, so a larger drop is natural. It has reached the weekly S2 (140.16), which stands as static support. The 38.2% (139.19) retracement level represents a major downside target. Technically, we have a strong demand zone around the 139.00 psychological level. Still, after this massive sell-off, we cannot exclude a temporary rebound, as the price may try to retest the resistance levels before extending its sell-off. https://www.forexcrunch.com/usd-jpy-price-faces-retracement-ahead-of-us-inflation-data/

2023-07-12 06:57

The dollar hovered near a two-month low on Tuesday. Investors await US inflation data, which could influence the Fed’s decision to end rate hikes sooner. German inflation experienced an increase in June, breaking the trend of a steady decline. Today’s EUR/USD price analysis is bullish. On Tuesday, the dollar hovered near a two-month low as the market anticipated the US inflation report. This report could influence the Federal Reserve’s decision to end rate hikes sooner. Furthermore, investors will assess whether price pressures continue to decrease, offering insights into the future interest rate outlook. On Monday, investors analyzed Federal Reserve officials’ remarks emphasizing the need for additional rate hikes due to persistent inflation. However, they also said the central bank was nearing the end of its current cycle of tightening monetary policy. Notably, economists surveyed by Reuters predicted a 3.1% rise in the headline inflation for June, following a 4% increase in May. This would indicate the lowest reading since March 2021. Moreover, the core rate, expected to decline for the third consecutive month to 5% from 5.3%, still exceeds the Fed’s 2% target by more than double. Despite last week’s employment report revealing fewer-than-expected additions to non-farm payrolls, it had minimal impact on rate expectations. Elsewhere, German inflation rose in June, breaking the trend of steady decline observed since the beginning of the year. On Tuesday, the federal statistics office confirmed that German consumer prices rose by 6.8% year-on-year in June. This rebound in year-on-year inflation during the second quarter can be primarily attributed to base effects. These include the fuel discount implemented last year and a temporary reduction in rail fares. EUR/USD Key Events Today All focus is on the US inflation report coming tomorrow, as no key events from the US or the Eurozone are coming out today. EUR/USD Technical Price Analysis: Uptrend Pauses To Retest 1.1001, Targets 1.1040. EUR/USD 4-hour chart EUR/USD has made new highs above the 1.1001 key level, making strides in the new bullish trend. Moreover, it trades far above the 30-SMA, indicating a steep move. Additionally, the RSI points to stronger bullish momentum near the overbought region. The price is currently retesting the recently breached 1.1001 key level. From here, we might see bulls return to push the price to the next resistance at 1.1040. https://www.forexcrunch.com/eur-usd-price-analysis-dollar-on-back-foot-after-fed-comments/

2023-07-12 06:56

The pound surged to its highest level in 15 months against the dollar. British wages, excluding bonuses, rose 7.3% in the three months leading up to May. Fed officials suggested that the US central bank is approaching the conclusion of its hiking cycle. Today’s GBP/USD outlook is bullish. On Tuesday, the pound surged to its highest level in 15 months against the dollar following data that revealed stronger-than-expected wage growth. This increased pressure on the Bank of England (BoE) to raise interest rates. Notably, the Office for National Statistics said on Tuesday that British wages, excluding bonuses, experienced a 7.3% increase in the three months leading up to May compared to the previous year. This surpassed the 7.1% rise predicted by economists surveyed by Reuters. However, there were indications of a slight loosening in the labor market. The unemployment rate unexpectedly rose from 3.8% to 4.0% in the three months until April. Furthermore, job vacancies declined, reaching their lowest level since mid-2021. The BoE closely monitors wage growth as it evaluates the inflationary pressure remaining in the British economy. The central bank has implemented 13 consecutive interest rate increases thus far. Moreover, Governor Andrew Bailey stated on Monday that both wage increases and company prices were rising too rapidly. Additionally, he emphasized his commitment to combating the inflation rate, which stands at 8.7%—higher than in any other major developed economy. Meanwhile, the dollar fell as investors evaluated statements from Federal Reserve officials. They expressed support for two additional rate hikes while suggesting that the US central bank is approaching the conclusion of its hiking cycle. GBP/USD Key Events Today Investors are not awaiting any key events from the UK or the US. Therefore, all focus will be on the upcoming US inflation report. GBP/USD Technical Outlook: Bulls Confirm Their Dominance With A New High. GBP/USD 4-hour chart GBP/USD has made a new high on the 4-hour chart after breaking above the 1.2850 resistance level. The bulls returned after a pullback that retested the 1.2750 support level. They made an engulfing candle that kept the price above the 30-SMA, confirming the bullish bias. Furthermore, the RSI respected the pivotal 50-level as support before rising toward the overbought region. With such strong momentum, bulls will likely soon break above the 1.2900 key resistance. https://www.forexcrunch.com/gbp-usd-outlook-hits-15-month-top-as-uk-wage-growth-jumps/

2023-07-11 03:40

The US reported the smallest increase in job gains in two-and-a-half years. Investors expect a 5% annual increase in core US inflation for June. China’s factory-gate prices experienced the sharpest decline in seven-and-a-half years in June. Today’s AUD/USD forecast is bearish. On Monday, the dollar rebounded from its initial decline. Consequently, it recovered from an immediate reaction to data indicating the smallest increase in US job gains in two-and-a-half years. Meanwhile, disappointing inflation figures in China put pressure on the Australian dollar. Notably, the US employment report revealed that nonfarm payrolls only increased by 209,000 in June. This figure fell short of market expectations for the first time in 15 months. However, a closer look at the employment report indicated ongoing robust wage growth, indicating a tight labor market. The focus now shifts to US inflation data scheduled for release on Wednesday, with expectations of a 5% annual increase in core CPI for June. Elsewhere, data released on Monday revealed that China’s factory-gate prices experienced the sharpest decline in seven-and-a-half years in June. Meanwhile, consumer inflation reached its lowest point since 2021. This fueled hopes for additional support measures from Chinese authorities. China’s post-pandemic recovery, which initially showed strong progress in the first quarter, has now experienced a slowdown. The weak data negatively impacted the Australian and New Zealand dollars, often used as proxies for the Chinese yuan. OCBC currency strategist Christopher Wong stated, “The softer CPI is still reflecting weak domestic demand while PPI deflation underscores the strains on factories.” Therefore, there is a need for stimulus support in China. AUD/USD Key Events Today Today will be a quiet session for AUD/USD as no key economic report will come from Australia or the US. Therefore, investors will likely keep digesting the US jobs report. AUD/USD Technical Forecast: Bears Set Sights On Range Support As The Price Consolidates. AUD/USD 4-hour chart AUD/USD has fallen below the 30-SMA after a recent surge to the 0.6700 resistance level. The market has no clear direction as the price oscillates between the 0.6600 support and the 0.6700 resistance. At the moment, bears are in the lead as the price trades below the SMA while the RSI has gone slightly below 50. Therefore, the price will soon retest the range support at 0.6600. A break below this level would finally give direction to this market. Otherwise, it will bounce higher and continue oscillating. https://www.forexcrunch.com/aud-usd-forecast-aussie-dips-on-weak-chinese-inflation/