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/
2023-07-11 03:38
US nonfarm payrolls report revealed an increase of 209,000 jobs in June. Previously anticipated Fed rate cuts in 2023 now appear unlikely. Speculators hold a significant short position in the yen, valued at $9.793 billion. Today’s USD/JPY outlook is bearish. The yen extended gains on Monday after surging on Friday amid dollar weakness. On Friday, the dollar experienced a decline following the release of the US nonfarm payrolls report. Notably, the report revealed an increase of 209,000 jobs in June. This figure fell short of market expectations for the first time in 15 months. However, it also highlighted persistent strong wage growth, reinforcing market expectations for an upcoming rate hike this month. Furthermore, it reassured the markets that the Fed’s rate hikes program may end soon. Still, previously anticipated rate cuts in 2023 now appear unlikely. Meanwhile, the yen surged due to concerns over the 10-year Treasury yield surpassing 4%. The pair is particularly sensitive to US yields, which declined after the release of the jobs data. As a result, the yen strengthened against the US currency, reaching a two-week high. The increase in the 10-year Treasury yield above 4% raised market concerns about potential intervention by Japan in currency markets. Elsewhere, weekly data from the US regulator showed that speculators currently maintain a significant short position in the yen, valued at $9.793 billion. This represents the largest short position since May 2022 and has nearly doubled in size within the past three months alone. With a market focus on central bank policies, particularly the US Federal Reserve, attention now shifts to the upcoming US inflation data. USD/JPY Key Events Today Investors do not expect any key economic releases today that might significantly impact USD/JPY. Therefore, the pair might extend Friday’s losses. USD/JPY Technical Outlook: Significant Bearish Momentum Points To A New Direction. USD/JPY 4-hour chart On the charts, USD/JPY recovered slightly after collapsing to the 142.01 support level. However, the rebound failed to surpass the 143.00 resistance level as bears returned to continue the collapse. The bearish bias is strong as the price is currently well below the 30-SMA. Furthermore, bearish momentum has recently increased, with the RSI getting oversold for the first time in a while. Therefore, bears are strong, and they will likely look to break below the 142.01 support level. They might soon retest the 141.25 support. https://www.forexcrunch.com/usd-jpy-outlook-yen-extends-gains-after-treasury-yields-soar/
2023-07-11 03:37
XAU/USD failed to remove the resistance levels signaling a new sell-off. A new lower low activates more declines. A valid breakout through the median line (ml) indicates an upside continuation. The gold price slumped after reaching $1,934, Friday’s high. The metal is trading at $1,921, above today’s low of $1,912. However, it seems to be struggling as the US dollar pulled out of lows. DXY’s larger rebound should force the XAU/USD to hit new lows. Fundamentally, gold jumped higher after the US data dump on Friday. However, it has failed to confirm a meaningful recovery. The US reported mixed data in the last session. The NFP figures came in at 209K in June versus 224K expected, and compared to 306K in May, Average Hourly Earnings rose by 0.4%, beating the 0.3% growth, while the Unemployment Rate dropped to 3.6% as expected. Today, the US will release the Final Wholesale Inventories indicator, which is expected to report a 0.1% drop. The Chinese and Japanese economic data came in worse than expected. Later, the BOE Gov Bailey Speaks could have an impact. The UK Claimant Count Change, Average Hourly Earnings, Unemployment Rate, Eurozone ZEW Economic Sentiment, and German ZEW Economic Sentiment could move the price tomorrow. Still, the US inflation figures, RBNZ, and BOC could shake the price on Wednesday. These represent the most important events of the current week. Gold price technical analysis: Sellers’ dominance Gold price hourly chart Technically, the gold price is fighting hard to rebound and recover after today’s massive drop. As you can see on the hourly chart, the XAU/USD found strong resistance right above $1,931 and above the median line (ml) of the ascending pitchfork. The metal has registered false breakouts again, signaling exhausted buyers and strong downside pressure. The price came back below the downtrend line. However, it remains to see if it stabilizes below it. Staying above the broken downtrend line could announce a new potential rally. On the other hand, stabilizing under this line should signal more declines. The lower median line (LML) and the weekly S1 (1,907) represent critical downside obstacles. A valid breakdown through these support levels activates a larger drop. On the contrary, a new higher high and a valid breakout above the median line (ml) can bring new longs and open the door for larger growth. https://www.forexcrunch.com/gold-price-upside-invalidated-after-rejection-us-cpi-in-focus/
2023-07-07 07:14
The dollar made slight gains following the release of the FOMC minutes. The majority of policymakers anticipate further tightening of US monetary policy. The Canadian dollar declined to its lowest level against the US dollar in nearly three weeks. Today’s USD/CAD forecast is bullish. On Thursday, the dollar made slight gains following the release of the minutes from the US Federal Reserve’s recent policy meeting. These minutes strengthened the belief in an upcoming interest rate hike this month. Notably, the minutes revealed that most policymakers anticipate further tightening of US monetary policy. This is despite their decision to maintain interest rates at the previous meeting. As a result, the dollar experienced a slight increase in value, accompanied by higher Treasury yields. In contrast, stocks declined as market expectations grew that the Federal Reserve would resume its rate-hike campaign this month. Furthermore, it might maintain higher rates for an extended period to combat inflation. The CME FedWatch tool indicates that markets are currently pricing in an 89% probability of a 25 basis point rate increase in July. On Wednesday, the Canadian dollar declined to its lowest level against the US dollar in nearly three weeks. This was caused by a shift towards more cautious investor sentiment, which prompted the purchase of the US dollar based on technical factors. George Davis, the chief technical strategist at RBC Capital Markets, stated that the weakened US equity markets created a risk-off environment. Consequently, it led to broader gains for the US dollar. Finally, the price of oil, a significant export for Canada, narrowed the price difference with the global benchmark Brent. This occurred as a response to the supply cuts announced by Saudi Arabia and Russia on Monday. USD/CAD Key Events Today Several important economic releases from the US today might cause a lot of volatility for USD/CAD. Investors will get details on employment and business activity in the services and non-manufacturing sectors. USD/CAD Technical Forecast: Bulls Set Sights On 1.3350. USD/CAD 4-hour chart On the charts, USD/CAD has finally broken above the 1.3275 resistance level after a long period of consolidation. Consequently, the price has risen farther above the 30-SMA, strengthening the bullish bias. At the same time, the RSI has gotten closer to the overbought region, indicating strong bullish momentum. Now that the price is above 1.3275, nothing stops it from reaching 1.3350 resistance. https://www.forexcrunch.com/usd-cad-forecast-fed-minutes-boost-rate-hike-expectations/
2023-07-07 07:13
Retail sales in the Eurozone remained stable in May. Most Fed officials anticipated the eventual need for tightening monetary policy. Traders in futures linked to the Fed policy rate anticipate a rate hike in July. Today’s EUR/USD outlook is slightly bullish. The euro rose after data revealed that retail sales in the Eurozone remained stable in May. Increased expenditure on non-food items balanced out the declines observed in food and automotive fuel sales. Retail sales volumes in the 20 euro-sharing nations remained unchanged compared to April. However, they showed a 2.9% decrease compared to last year’s period. The sluggish consumption is due to declining real incomes. Notably, households allocate much of their earnings towards costly energy, credit, and mortgage repayments. This has led to a reduction in demand for other goods. Meanwhile, the June meeting minutes revealed that the US Federal Reserve, acting in unison, decided to maintain the current interest rates. While most participants anticipated the eventual need for tightening monetary policy, they agreed to uphold the current rates. Following the release of the minutes, the market experienced minimal changes. Moreover, traders in futures linked to the Fed policy rate continued to anticipate a rate hike in July. They estimated a one-in-three probability of another increase by the year’s end. Simultaneously, policymakers grappled with data indicating a persistently tight job market and modest improvements in inflation. Niels Christensen, the chief analyst at Nordea, commented that there were no significant surprises. Markets already expect the Fed’s July rate hike, which is positive for the dollar. EUR/USD Key Events Today Investors expect a slew of key economic reports from the US that will shed light on the labor market and services sector. These reports include the ADP nonfarm employment change, initial jobless claims, JOLTs job openings, and services PMI. EUR/USD Technical Outlook: Price Retests The Strong 1.0851 Support. EUR/USD 4-hour chart The bias for the EUR/USD on the charts is bearish. The price trades below the 30-SMA, showing bears are in control. Additionally, bearish momentum is strong as the RSI trades below 50. However, the downward move has paused at the 1.0851 support level. This has happened twice before, and the price bounced higher each time. Therefore, bulls might push the price above the 30-SMA and the 1.0900 resistance level. However, if bears are stronger this time, they might break below 1.0851 and retest the 1.0800 support. https://www.forexcrunch.com/eur-usd-outlook-eurozone-retail-sales-hold-steady-in-may/
2023-07-07 07:12
The XAU/USD could return higher if it stays above the weekly pivot point. The US data should bring sharp movements today. After its strong growth, a temporary retreat was natural. The gold price experienced a strong rejection after reaching yesterday’s high at $1,935. The metal is trading at $1,924 at the time of writing. Gold turned to the downside ahead of last night’s FOMC Meeting Minutes. The US Factory Orders reported a 0.3% growth versus 0.7% growth in the previous reporting period, while Wards’ Total Vehicle Sales were reported at 15.7M, beating the 15.3M forecasted. Today, the US is to release high-impact data, so the fundamentals should drive the rate. The ADP Non-Farm Employment Change could be reported at 226K versus 278K in the previous reporting period. Furthermore, the Unemployment Claims could jump to 247K the previous week. ISM Services PMI is expected to increase from 50.3 points to 51.3 points, while JOLTS Job Openings may drop from 10.10M to 9.93M. Poor US data could help the yellow metal to develop a new bullish movement. The US will release the Non-Farm Employment Change, Unemployment Rate, and Average Hourly Earnings tomorrow. The economic figures should bring high action and sharp movements. Gold price technical analysis: Strong support at $1,915 Gold price hourly chart The XAU/USD escaped from the up channel indicating exhausted buyers. The price found support on the weekly pivot point of $1,915, and it tries to push higher. As long as it stays above this level, the yellow metal could develop a new bullish movement. The median line (ML) of the descending pitchfork represents dynamic support. Escaping from the major Falling Wedge triggered a higher potential swing. After its strong growth, a minor retreat or accumulation was probable. The price could retest the near-term support levels before jumping higher. https://www.forexcrunch.com/gold-price-sees-dead-cat-bounce-ahead-of-us-adp-data/
