2025-05-22 09:39
The EUR/USD outlook turned slightly bearish on Thursday after Eurozone PMI data. Business activity in the Eurozone crossed below 50 in May. The dollar remained fragile as market participants watched the progress of Trump’s tax bill. The EUR/USD outlook turned slightly bearish on Thursday after data revealed a contraction in Eurozone business activity in May. However, the euro remained near peaks hit in the previous session as the greenback fell on US fiscal worries. Data on Thursday revealed that business activity in the Eurozone crossed below 50 in May, indicating a contraction. The Composite PMI fell from a previous reading of 50.4 to 49.5. The decline came mostly from the services sector. Meanwhile, manufacturing remained stable. The soft data might increase pressure on the European Central Bank to lower interest rates at the next meeting. However, policymakers will keep watching incoming data for further clues on the extent of damage Trump’s tariffs have had on the economy. Meanwhile, the dollar remained fragile as market participants watched the progress of Trump’s tax bill. The US currency has had a difficult week after Moody’s downgraded the US government’s credit rating due to a growing debt. The move weakened investor confidence in US assets. On Wednesday, the US reported a poor Treasury bonds auction, confirming the drop in demand. Trump’s bill is slowly making its way to the Senate. If it is passed, it will increase the US debt burden, further hurting investor confidence. EUR/USD key events today Unemployment Claims Flash Manufacturing PMI Flash Services PMI EUR/USD technical outlook: Price pauses after new high On the technical side, the EUR/USD price has paused its rally after breaking above the 1.1301 key resistance level. Still, it trades well above the SMA with the RSI above 50, supporting a bullish bias. Previously, the price was trading in a downtrend until it got to the 1.1100 key support level. Here, bulls emerged strong enough to push the price above the 30-SMA. After that, they confirmed a bullish reversal by making a higher low and a higher high. However, the rally has slowed down and price action is showing indecision. Most candlesticks have small bodies with wicks. This is a sign that neither bears nor bulls are ready to commit to a strong move. However, given the bullish bias, the price might soon surge to reach the next resistance at 1.1500. https://www.forexcrunch.com/blog/2025/05/22/eur-usd-outlook-euro-eases-after-soft-eurozone-pmi-data/
2025-05-22 08:24
The USD/JPY forecast suggests increasing demand for the safe-haven yen. Trump’s tax bill might add to the US’s already huge debt burden. Traders will keep an eye on US business activity data. The USD/JPY forecast is bearish, suggesting increasing demand for the safe-haven yen amid fiscal concerns in the US. At the same time, the dollar weakened against the yen after a poor Treasury bonds auction, which pointed to weak demand for US assets. The yen extended gains on Thursday after reaching a two-week high against the dollar in the previous session. The rally came as market participants watched the progress of Trump’s tax bill. Although it had faced some resistance from Republicans, the bill might pass the Senate. Trump’s tax bill might add to the US’s already huge debt burden. Notably, Moody’s downgraded the US government’s credit rating, citing the country’s growing debt. The move further weighed on investor confidence in US assets. However, the dollar got some support against the yen after reports that the US and Japan had agreed that USD/JPY moves reflected fundamentals. Initially, market participants were suspicious that the US would pressure Japan to strengthen the yen. The US has suspected that Japan is keeping the yen weaker on purpose. A strong yen would allow US manufacturers to get a competitive edge. Meanwhile, traders will keep an eye on US business activity data for clues on future Fed moves. Weak numbers will increase bets for a rate cut in September. The opposite is also true. USD/JPY key events today Unemployment Claims Flash Manufacturing PMI Flash Services PMI USD/JPY technical forecast: Sentiment shifts breaks support trendline On the technical side, the USD/JPY price has broken below a solid support trendline, indicating a bearish shift in sentiment. The price now trades well below the 30-SMA with the RSI in the oversold region, suggesting a strong bearish bias. Initially, the price was in an uptrend, making higher highs and lows. Pullbacks respected the support trendline. However, after the last swing high, bears gained enough momentum to push the price below the 30-SMA and the support trendline. This showed they were ready to change the trend. However, they must still face the 142.55 support level. A break below this level would make a lower low, confirming the start of a downtrend. After that, the price would have to continue with a series of lower highs and lows. https://www.forexcrunch.com/blog/2025/05/22/usd-jpy-forecast-yen-shines-as-us-fiscal-worries-mount/
2025-05-21 10:01
The GBP/USD forecast shows an unexpected surge in UK inflation. UK inflation increased by 3.5% in April, well above estimates of a 3.3% rise. Fed’s Alberto Musalem said the US labor market could weaken further. The GBP/USD forecast shows an unexpected surge in UK inflation that has dragged down BoE rate cut expectations. Meanwhile, the pound rallied to new peaks before pulling back. On the other hand, the dollar remained frail after Fed policymakers noted that the outlook for the US economy remained uncertain. Data on Wednesday showed consumer inflation in the UK increased by 3.5% in April, well above estimates of a 3.3% rise. It was also a sharp climb from the previous reading of 2.6%. The unexpectedly hot figure led to a decline in BoE rate cut expectations. Currently market participants are pricing a total of 35-bps of rate cuts by the year’s end. On the other hand, Fed rate cut expectations soared last week after downbeat inflation numbers. Market participants are pricing a 67% chance of a cut in September. Initially, traders had expected a move in June. However, the US economy has proven resilient in April despite Trump’s tariffs. Still, policymakers believe it is too early to conclude that tariffs had little impact on the economy. On Tuesday, Fed’s Alberto Musalem said the labor market could weaken further despite the trade truce between China and the US. GBP/USD key events today Market participants are not looking forward to any key reports from the UK or the US. GBP/USD technical forecast: Bulls break key resistance On the technical side, the GBP/USD price has broken above the 1.3401 resistance level. This is a significant break as the price initially traded in a range. Currently, the price trades well above the SMA with the RSI above 50. Therefore, the bullish bias is strong. For a long time, GBP/USD has maintained a sideways move between the 1.3251 support and the 1.3401 resistance. The price made several attempts to break out of this consolidation area but failed. In the latest move, bulls have taken charge. The price is currently retesting the recently broken range resistance. If it bounces higher, it will confirm the breakout. Moreover, the price would likely make new highs above the 1.3500 key psychological level. On the other hand, the price will remain in consolidation if it drops back below the 1.3401 key level. https://www.forexcrunch.com/blog/2025/05/21/gbp-usd-forecast-uk-inflation-surprise-dims-rate-cut-odds/
2025-05-21 08:37
The USD/CAD price analysis indicates a lower likelihood of a BoC rate cut in June. Core inflation in Canada was hotter than expected. Fed policymakers maintained that the economic outlook was uncertain. The USD/CAD price analysis indicates a lower likelihood of a Bank of Canada rate cut in June, which is pushing the Canadian dollar higher. At the same time, the dollar was fragile after Fed policymakers maintained that the risk of stagflation in the US remained high after Trump’s policy changes. Data on Tuesday revealed that inflation in Canada fell by 0.1% as expected. However, core inflation was hotter than expected. The median CPI increased by 3.2% compared to the forecast of 2.9%. Meanwhile, the trimmed CPI came in at 3.1%, well above the forecast of a 2.8% increase. The upbeat figures boosted the Canadian dollar. Moreover, the numbers lowered the likelihood of a BoC rate cut in June. Before the report, traders were pricing a 65% chance of a June rate cut. However, that dropped to 33% after the report. At the last meeting, the BoC paused its easing. With inflation still hot, they might pause again in June. On the other hand, Fed policymakers maintained that the economic outlook was uncertain. Fed’s Alberto Musalem noted that despite the recent trade truce between China and the US, the labor market could weaken further. At the same time, inflation might increase. USD/CAD key events today Market participants do not expect any key economic releases from the US or Canada. Therefore, traders will keep digesting Canada’s inflation report. USD/CAD technical price analysis: Triangle breakout signals new decline USD/CAD technical price analysis On the technical side, the USD/CAD price has broken out of its triangle pattern. At the same time, the price has broken below the 1.3900 support level, making a lower low and confirming a new direction. The bearish bias is strong with the price well below the 30-SMA and the RSI near the oversold region. Initially, the price paused its rally and started trading in a triangle pattern below the 1.4000 key level. Eventually, the price broke out on the downside to start a new downtrend. Bears are now targeting the 1.3800 support level. However, before that, the price might pull back to retest the triangle before collapsing to fresh lows. The decline will continue as long as the price holds its position below the 30-SMA and the RSI stays under 50. https://www.forexcrunch.com/blog/2025/05/21/usd-cad-price-analysis-boc-rate-cut-odds-fall-amid-hot-cpi/
2025-05-20 10:08
The USD/CAD price analysis shows strength in the Canadian dollar. Economists are predicting a 0.1% decrease in Canada’s inflation. Market participants are watching fiscal developments in the US. The USD/CAD price analysis shows strength in the Canadian dollar ahead of crucial inflation figures from Canada. Meanwhile, the dollar remained fragile after a credit rating downgrade for the US government. At the same time, market participants are on edge ahead of a vote on Trump’s tax cuts bill. The loonie was strong on Tuesday as all eyes focused on Canada’s inflation report. The last reading revealed a 0.3% increase in inflation. This time, economists are predicting a 0.1% decrease in inflation. A softer-than-expected number will increase pressure on the Bank of Canada to lower borrowing costs, hurting the loonie. On the other hand, an upbeat report would further strengthen the Canadian dollar. Meanwhile, market participants are watching fiscal developments in the US. Lawmakers will soon vote on a tax cuts bill that could cause volatility in the financial markets. On Monday, Moody’s downgraded the US government’s credit rating due to its growing debt. If Trump’s bill passes, it will further increase the debt burden, hurting investor confidence in US assets. At the same time, market participants are waiting for more trade deals with the US. However, progress has stalled since the trade truce between the US and China. USD/CAD key events today Canada CPI m/m Canada median CPI y/y Canada trimmed CPI y/y USD/CAD technical price analysis: Bears gear up for a triangle breakout On the technical side, the USD/CAD price trades below the 30-SMA, with the RSI under 50. This suggests a bearish bias. However, on a larger scale, the price is caught in a triangle pattern between the 1.3900 support and the 1.4000 resistance levels. Initially, the price made an impulsive bullish move that paused at the 1.4000 key psychological level. It then entered a corrective move that presented itself as a triangle pattern. Currently, bears are in the lead within the triangle. Therefore, they might try to break out of the pattern. Still, bears would have to break below the 1.3900 key support to confirm a new direction. Otherwise, bulls will return to retest the 1.4000 key resistance. A break above this level would confirm a continuation of the previous uptrend. https://www.forexcrunch.com/blog/2025/05/20/usd-cad-price-analysis-markets-brace-for-key-inflation-data/
2025-05-20 08:44
The AUD/USD outlook suggests a dovish stance by the Reserve Bank of Australia. Market participants are pricing a 60% chance of another rate cut in July. Traders await a vote in the US on Trump’s tax cuts. The AUD/USD outlook suggests a dovish stance by the Reserve Bank of Australia that could mean more rate cuts in the coming months and a weaker Aussie. At the same time, market participants are on edge ahead of a vote on Trump’s tax cuts. The Reserve Bank of Australia lowered borrowing costs by 25-bps on Tuesday and assumed a more dovish tone. At the previous meeting, policymakers had cut rates but maintained caution. However, this time, they noted the economic uncertainty brought about by Trump’s tariffs. At the same time, inflation in Australia has cooled. Therefore, nothing is holding the RBA back. Market participants moved to price a 60% chance of another rate cut in July. On the other hand, the dollar paused its previous session decline. However, it drifted on Tuesday as market participants awaited a vote in the US on Trump’s tax cuts. The dollar had collapsed in the previous session after Moody’s downgraded the US government’s credit rating. Elsewhere, Fed policymakers remain cautious about rate cuts, waiting for more clues on the impact of Trump’s tariffs. This week, traders will focus on business activity data that will show the state of the economy. Downbeat numbers could pile pressure on the Fed to cut interest rates. AUD/USD key events today After the RBA meeting, market participants do not expect any key releases from Australia or the US. AUD/USD technical outlook: Choppy price action On the technical side, the AUD/USD price trades in a range between the 0.6375 support and the 0.6500 resistance. Within this range, the price has been chopping through the 30-SMA with no clear direction. At the same time, the RSI has chopped through 50, indicating almost equal momentum for bulls and bears. At the moment, the price trades below the SMA with the RSI under 50, a sign that bears might soon retest the channel support. A break below the support would signal a bearish sentiment shift, likely starting a new downtrend. It would also allow AUD/USD to retest the 0.6250 support level. However, if the range support holds firm, bulls will resurface to challenge the range resistance, and the consolidation might continue. https://www.forexcrunch.com/blog/2025/05/20/aud-usd-outlook-rbas-dovish-tone-sends-aussie-dollar-lower/
