2024-12-21 18:04

US data on sales, business activity and GDP growth all revealed a robust economy. Canada’s inflation rose more than expected, but sales missed forecasts. Fed policymakers forecast fewer-than-expected rate cuts in 2025. The USD/CAD weekly forecast shows a divergence in policies between the Fed and the BoC that has hurt the loonie. Ups and downs of USD/CAD The loonie had a bullish week amid a mix of data from Canada and the US. US data on sales, business activity, and GDP growth all revealed a robust economy that needs restrictive monetary policy. Meanwhile, in Canada, inflation rose more than expected, but retail sales missed forecasts. -Are you looking for the best AI Trading Brokers? Check our detailed guide- Meanwhile, the FOMC meeting gave the dollar a boost as policymakers forecasted fewer-than-expected rate cuts in 2025. The outlook especially weighed on the loonie since the Bank of Canada has maintained an aggressive easing cycle, which might continue in 2025. Next week’s key events for USD/CAD In 2025, traders will study major reports showing employment change in the US and Canada. Additionally, the FOMC meeting minutes will give insight into Fed monetary policy. Notably, the US nonfarm payrolls report will show whether there was a surge in employment in December. At the same time, it will show the state of unemployment, which increased in November. An upbeat report will signal economic resilience, reducing Fed rate cut bets and boosting the dollar. On the other hand, soft figures might increase rate cut bets and weigh on the greenback. Meanwhile, Canada’s economy has been on a downtrend, pushing the Bank of Canada to cut rates aggressively in 2024. Weak employment figures will raise expectations for more rate cuts, which will sink the loonie. USD/CAD weekly technical forecast: Uptrend pauses at the 1.4450 resistance On the technical side, the USD/CAD price has paused its rally at the 1.4450 resistance level. However, the bullish bias remains strong since the price trades well above the 22-SMA, with the RSI in the overbought region. Therefore, the pause might allow the price to retest the 22-SMA before continuing higher. Since bulls broke above the 22-SMA, the price has traded in a higher high, higher low pattern, indicating a developed uptrend. At the same time, it has respected the 22-SMA as support. Meanwhile, the RSI has stayed above 50 in bullish territory. In the new year, USD/CAD might continue its uptrend after a pullback to retest the 1.4200 key level or the 22-SMA support. https://www.forexcrunch.com/blog/2024/12/21/usd-cad-weekly-forecast-fed-boc-divergence-triggers-bulls/

2024-12-20 10:56

Canada’s new Finance Minister, Dominic Leblanc, took office, restoring political calm. The US economy grew by 3.1% in the fourth quarter. US jobless claims dropped more than expected last week. The USD/CAD price analysis suggests political calm in Canada, which has given the loonie some strength against the shining dollar. Meanwhile, market participants eagerly await retail sales figures from Canada that will continue shaping the outlook for Bank of Canada rate cuts. If you are interested in automated forex trading, check our detailed guide- The loonie weakened earlier in the week when Canada’s Finance Minister resigned. The move created political uncertainty for the already struggling economy. However, calm was restored when the new Finance Minister, Dominic Leblanc, took office. Nevertheless, the Canadian dollar remains fragile due to the US dollar’s recent rally. The greenback strengthened after the Fed projected only 50-bps of rate cuts in the coming year. This outlook means that interest rates in the US will remain at restrictive levels for longer. Moreover, it would create a bigger rate gap between the US and Canada since the Bank of Canada is lowering rates aggressively. Elsewhere, data from the previous session revealed that the US economy grew by 3.1% in the fourth quarter, bigger than the forecast of a 2.8% expansion. The report continued the trend of upbeat data contributing to the Fed’s new cautious outlook. At the same time, jobless claims dropped more than expected, indicating tight labor market conditions. Market participants will now watch the core PCE figures for more clues on future Fed moves. A bigger-than-expected number will support the dollar. Meanwhile, downbeat figures will give the loonie more relief. USD/CAD key events today Canada core retail sales m/m Canada retail sales m/m US core PCE price index m/m USD/CAD technical price analysis: Uptrend pauses for a brief retreat On the technical side, the USD/CAD price is retreating after making a new high near the 1.4450 key level. However, despite the retreat, the bullish bias remains strong, with the price well above the 30-SMA and the RSI in bullish territory. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- The bullish trend has developed steadily, with bulls making new highs and breaking above key resistance levels. Given the strong bullish bias, the uptrend might continue. Therefore, the retreat might pause at the 30-SMA support, where bulls will take over. If the price bounces higher, it will retest the 1.4450 resistance. A break above would make a higher high, continuing the uptrend. https://www.forexcrunch.com/blog/2024/12/20/usd-cad-price-analysis-political-stability-restores-loonie/

2024-12-20 10:12

Three BoE policymakers were ready to lower borrowing costs. Data revealed that UK retail sales missed forecasts, increasing by 0.2%. The US economy expanded by 3.1% in the fourth quarter, above estimates of 2.8%. The GBP/USD outlook shows growing enthusiasm among pound bears as Bank of England rate cut expectations increase. At the same time, expectations for fewer rate cuts in the US in 2025 have boosted the dollar, further weighing on sterling. If you are interested in automated forex trading, check our detailed guide- The pound collapsed to new lows on Thursday after the Bank of England policy meeting. Although the central bank kept interest rates unchanged, there was a shift in sentiment among some policymakers. Three policymakers were ready to lower borrowing costs, which was unexpected. As a result, markets increase bets for rate cuts in 2025. Recent economic data have pointed to a recovering labor market and high inflation. Consequently, market participants were pricing a gradual easing pace in the coming year. However, if three policymakers were ready to cut rates in December, the number might increase at the next meeting. Meanwhile, data revealed that UK retail sales missed forecasts, increasing by 0.2%. Economists had expected a 0.5% increase. The miss was a sign that consumer spending dropped, which could put more pressure on the Bank of England to lower borrowing costs. On the other hand, the dollar remained strong after the Fed projected fewer rate cuts in 2025. At the same time, data on Thursday revealed that the US economy expanded by 3.1% in the fourth quarter, above estimates of 2.8%. Moreover, unemployment claims fell more than expected, showing a resilient economy. GBP/USD key events today Core PCE Price Index m/m GBP/USD technical outlook: Bears prompt 100% retracement On the technical side, the GBP/USD price has made a sharp move from the 30-SMA to the 1.2500 key support level. The decline has put the price well below the 30-SMA and the RSI near the oversold region, supporting a bearish bias. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Previously, the price traded in a shallow bullish trend but reversed when it broke below its support trendline. Since then, bears have been in the lead, making lower highs and lows. The most recent move has made a 100% retracement of the previous bullish trend. Therefore, a break below the 1.2500 support will be a significant milestone for bears. It will signal a continuation of the bearish trend that was there before bulls prompted a corrective move. https://www.forexcrunch.com/blog/2024/12/20/gbp-usd-outlook-pound-slides-as-rate-cut-bets-grow/

2024-12-19 10:56

The Fed predicted fewer rate cuts in the coming year. Fed policymakers have assumed a less dovish stance due to the resilient US economy. The Bank of Japan gave little clues on future moves. The USD/JPY outlook took a sharp bullish turn on Wednesday as the Fed forecasted fewer cuts in 2025, and the BoJ remained mum on the outlook for rate hikes. As a result, the dollar soared while the yen collapsed. If you are interested in automated forex trading, check our detailed guide- The Federal Reserve met on Wednesday and cut interest rates by 25 bps. However, it was a hawkish cut because policymakers predicted fewer rate cuts in the coming year. According to forecasts, the central bank might only cut by 50 bps in 2025. This was a 50-bps drop from September’s forecast. As a result, markets slashed bets for rate cuts, boosting the dollar. Although traders had expected a change in the outlook for monetary easing, the Fed’s cautious forecast came as a surprise. Policymakers have assumed a less dovish stance due to the resilient US economy. Moreover, Trump’s administration might come with more economic growth and a spike in inflation, which would require a more restrictive policy. On the other hand, the Bank of Japan kept rates unchanged on Thursday and gave little clues on future moves. Market participants had expected some hints about a rate hike. However, Governor Ueda said the central bank needed time to assess incoming data. At the same time, the uncertainty about Trump’s policies has clouded the outlook. The meeting was a disappointment, leading to a collapse in the yen. USD/JPY key events today Final GDP q/q Unemployment Claims USD/JPY technical outlook: Bullish spike continues uptrend On the technical side, the USD/JPY price has made an impulsive bullish move that has broken past major resistance levels. The move started after a retest of the 30-SMA as support. Bulls have been in the lead since the price broke above the 30-SMA. Therefore, when it pulled back, bulls were ready to make a new high. As a result, the price broke above the 154.00 and the 156.00 key resistance levels. At the same time, the RSI entered the overbought region, indicating a surge in bullish momentum. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Bulls are eyeing the 158.01 resistance and might soon reach it. However, after such a sharp move, bulls might get exhausted at the next resistance, leading to a pullback to retest recently broken key levels. https://www.forexcrunch.com/blog/2024/12/19/usd-jpy-outlook-fed-signals-fewer-2025-cuts-boj-stays-silent/

2024-12-19 10:55

The greenback jumped after the Fed forecasted fewer rate cuts in 2025. Forecasts revealed that the Fed might only lower rates by 50 bps. Inflation jumped from 2.3% to 2.6% in the three months to October. The GBP/USD forecast shows renewed support for the USD despite FOMC’s rate cut. The Fed left a hawkish statement regarding rate cuts in 2025. As a result, the pound collapsed despite lower expectations for Bank of England rate cuts. Market participants are now looking forward to US inflation data for more clues on the future of US monetary policy. If you are interested in automated forex trading, check our detailed guide- The greenback jumped in the previous session after the Fed forecasted fewer rate cuts in 2025. The central bank lowered borrowing costs by 25 bps on Wednesday. However, forecasts revealed that the Fed might only lower rates by 50 bps. This was a significant drop from September when the central bank forecasted 100 bps in rate cuts. The shift in policy outlook came due to recent resilience in the US economy. Economic figures have shown inflation has paused its progress to the 2% target. At the same time, the labor market and consumer spending have remained robust despite high interest rates. Moreover, policymakers expect this to continue with the Trump administration. On the other hand, traders are pricing in fewer rate cuts in the UK due to a robust labor market and high inflation. Wage data this week showed a surge in pay growth, which might keep the UK Central Bank cautious. At the same time, inflation jumped from 2.3% to 2.6% in the three months to October. Market participants expect the central bank to keep rates unchanged later in the day. GBP/USD key events today Monetary Policy Summary MPC Official Bank Rate Votes Official Bank Rate GBP/USD technical forecast: Lower low confirms downtrend On the technical side, the GBP/USD price has collapsed and broken below the 0.618 Fib to make a lower low. As a result, the price has fallen well below the 30-SMA, showing bears are in the lead. At the same time, the RSI trades nearer the oversold region, suggesting solid bearish momentum. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Initially, bulls had attempted to break above the 30-SMA but could not go beyond the 1.2725 resistance level. Soon after, there was a surge in bearish momentum as the price made an engulfing candle that broke below the 0.618 Fib level. After the impulsive move, the price has paused to retest the Fib level as resistance. If it holds, the decline will continue with the new target at 1.2500 support. https://www.forexcrunch.com/blog/2024/12/19/gbp-usd-forecast-dollar-surges-amid-hawkish-fomc/

2024-12-18 12:09

The USD/JPY pair rebounded as markets awaited a hawkish FOMC policy meeting. The US retail sales report showed an unexpected jump of 0.7% in November. Japanese exports increased faster than expected in November. The USD/JPY forecast shows a rebound hours before the FOMC policy meeting. The dollar recovered after upbeat sales data pointed to continued resilience in the US economy, while the yen eased ahead of the Bank of Japan policy meeting. If you are interested in automated forex trading, check our detailed guide- After dipping in the previous session, the USD/JPY pair rebounded as markets awaited a hawkish FOMC policy meeting. Traders expect the central bank to lower borrowing costs by 25-bps. However, policymakers might take a hawkish stance on the future due to economic resilience and looming Trump policy changes. The US economy has remained strong, with most economic reports beating expectations. On Tuesday, the US released its retail sales report, which showed an unexpected jump of 0.7% in November. Meanwhile, economists had predicted a 0.6% increase. This resilience has led to more cautious remarks by policymakers that have supported the dollar in recent weeks. At the same time, the Trump administration will take office in January. Markets expect policy changes that will likely support the economy and boost inflation. Therefore, the Fed might have to assume a gradual pace for rate cuts. In Japan, data on Wednesday revealed that exports increased faster than expected in November. Nevertheless, it was not enough to change the policy outlook. Markets expect the Bank of Japan to maintain rates this week, which might weaken the yen. However, a hawkish outlook from policymakers could boost the currency. USD/JPY key events today Federal Funds Rate FOMC Economic Projections FOMC Statement FOMC Press Conference USD/JPY technical forecast: Bears retest the 30-SMA support On the technical side, the USD/JPY price is bouncing higher after retesting the 30-SMA as support. The bullish bias is strong since the price has traded above the SMA since the trend reversed. At the same time, the RSI has stayed above 50 in bullish territory. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Bulls paused near the 154.00 key resistance level, and bears triggered a pullback to retest the 30-SMA support. If bulls remain in charge, the price will soon breach the 154.00 resistance to target the next hurdle at 156.00. Meanwhile, if the 154.00 holds firm, bears might breach the SMA to retest the 152.00 support level. https://www.forexcrunch.com/blog/2024/12/18/usd-jpy-forecast-buyers-enter-as-markets-eye-policy-signals/