2024-12-18 09:57
Data on Tuesday revealed that US retail sales jumped by 0.7% in November. Market participants are pricing a 97% chance of a Fed rate cut. Data revealed that inflation in Canada eased from 2.0% to 1.9% in November. The USD/CAD price analysis indicates a resurgence in bullish momentum following another positive US economic report. Meanwhile, the Canadian dollar languished near a 5-year low, weighed down by political uncertainty and an unexpected decline in consumer inflation. If you are interested in automated forex trading, check our detailed guide- Data on Tuesday revealed that US retail sales jumped by 0.7% in November, above estimates of 0.6%. The unexpected increase showed that consumer spending rose, indicating solid demand. The US economy has maintained resilience despite high borrowing costs, which has led to a more cautious tone among policymakers about the future. Nevertheless, market participants are still pricing a 97% chance that the Fed will cut rates later in the day. However, it might be a hawkish cut due to a shift in the outlook for the economy and inflation. The dollar will keep climbing if policymakers signal a more gradual approach in 2025. Notably, the incoming Trump administration might reheat the economy, forcing the Fed to maintain rates at restrictive levels. On the other hand, the loonie extended losses from the previous session due to political uncertainty. Canada’s Finance Minister unexpectedly resigned, leaving the country in a vulnerable position ahead of Trump’s tariffs. At the same time, data revealed that inflation in the country eased from 2.0% to 1.9% in November. As a result, markets are pricing another Bank of Canada rate cut in January. USD/CAD key events today Federal Funds Rate FOMC Economic Projections FOMC Statement FOMC Press Conference USD/CAD technical price analysis: Bulls Target Higher Resistance Levels On the technical side, the USD/CAD price has broken above the 1.4301 resistance level to make a new high in the uptrend. At the same time, the RSI has jumped to the overbought region, indicating solid bullish momentum. The price is in a developed bullish trend, making higher highs and lows. Moreover, it has stayed above the 30-SMA, respecting it as a strong support. If you are interested in guaranteed stop-loss forex brokers, check our detailed guide- Both the price and the RSI have made higher highs. Therefore, bullish momentum has strengthened with the uptrend, increasing the chances that this trend will continue. The price might retest the 1.4301 level before climbing to the next hurdle. https://www.forexcrunch.com/blog/2024/12/18/usd-cad-price-analysis-upbeat-us-data-ignites-bulls/
2024-12-17 11:15
British pay growth grew more than forecast in the 3 months to October. Markets expect only two BoE rate cuts by the end of 2025. US business activity in the services sector surged in December. The GBP/USD price analysis paints a bright future for the pound as UK labor market data shows resilience in the face of high interest rates. Meanwhile, market participants remained cautious ahead of policy meetings in the UK and the US this week. –Are you interested to learn more about forex options trading? Check our detailed guide- Data on Tuesday revealed that British pay growth grew more than forecast in the 3 months to October. Notably, average weekly earnings minus bonuses jumped to 5.2%, beating estimates of 5.0%. The upbeat figures further clouded the outlook for rate cuts in the UK. After the report, markets expected only two rate cuts by the end of 2025. As a result, the pound surged, recovering from last week’s lows. Although the labor market showed resilience, data last week revealed a contraction in the economy. Markets and policymakers remain cautious about the outlook for monetary policy as they await the impact of the new UK government budget. Meanwhile, traders expect the Bank of England to keep rates unchanged this week. However, they will focus on messaging about the future. On the other hand, the Fed will also hold its meeting and likely cut rates by 25-bps. However, data in the previous session revealed a surge in business activity in the services sector, showing continued economic resilience. At the same time, market participants have slashed bets for Fed rate cuts next year. GBP/USD key events today US core retail sales m/m US retail sales m/m GBP/USD technical price analysis: Bulls challenge the 30-SMA resistance On the technical side, the GBP/USD price has pulled back to retest the 30-SMA as resistance after recently reversing to the downside. Sentiment shifted to bearish after the price broke below its bullish trendline. However, the decline paused after reaching the 0.618 Fib retracement level. Here, bulls resurfaced to challenge the new direction. –Are you interested to learn more about forex tools? Check our detailed guide- Bulls will take back control and aim for the 1.2800 resistance level if the price breaks above the SMA. Such an outcome would also lead to a continuation of the previous bullish trend. On the other hand, if the SMA holds firm, GBP/USD will bounce lower to retest the 0.618 Fib level. A break below this level would make a new low, continuing the downtrend. https://www.forexcrunch.com/blog/2024/12/17/gbp-usd-price-analysis-upbeat-jobs-data-boosts-sterling/
2024-12-17 09:08
The Canadian dollar fell after Finance Minister Chrystia Freeland suddenly resigned. The loonie fell as oil prices dropped amid demand concerns. Data in the previous session showed a sharp improvement in US service sector business activity. The USD/CAD outlook shows a weakening Canadian dollar after the Finance Minister’s resignation and falling oil prices, while the U.S. dollar stays strong as markets expect fewer Fed rate cuts in 2025. –Are you interested to learn more about forex options trading? Check our detailed guide- The Canadian dollar fell after Finance Minister Chrystia Freeland suddenly resigned, causing political uncertainty. The Minister resigned after clashing with Prime Minister Justin Trudeau on policy. Canada’s economy faces a lot of uncertainty after high interest rates hurt demand. As a result, the Bank of Canada has lowered borrowing costs several times this year, weighing on the loonie. Political uncertainty will only add to the clouded outlook for the economy, further hurting the Canadian dollar. At the same time, the loonie fell as oil prices dropped amid demand concerns. Data showed weak consumer spending in China, the largest oil consumer. Poor data from the country dims the outlook for global oil demand. Meanwhile, the US dollar held steady after data in the previous session showed a sharp improvement in service sector business activity. The resilient economy has prompted traders to lower bets for Fed rate cuts in the coming year. Nevertheless, markets expect the Fed to cut rates this week. USD/CAD key events today Canada CPI m/m Canada median CPI y/y Canada trimmed CPI y/y US core retail sales m/m US retail sales m/m USD/CAD technical outlook: RSI indicates stalled bullish momentum On the technical side, the USD/CAD price has ascended to a new high in the uptrend. The price trades well above the 30-SMA with the RSI near the overbought region. Bulls have been in the lead for a while and recently broke above the 1.4200 key resistance level. The next hurdle is at the 1.4301 key level. –Are you interested to learn more about forex tools? Check our detailed guide- However, the RSI has stalled as the price has made new highs, indicating weaker enthusiasm among bulls. Therefore, USD/CAD might struggle to go beyond the 1.4301 key level. At the same time, a bearish divergence would signal a reversal. However, the trend will only reverse if the price breaks below the 30-SMA and the RSI dips below 50. https://www.forexcrunch.com/blog/2024/12/17/usd-cad-outlook-finance-ministers-exit-shakes-loonie/
2024-12-16 14:05
Business activity in the UK stalled in December. Prices charged by UK companies accelerated at the fastest rate in nine months. Traders are almost fully pricing a 25-bps Fed rate cut this week. The GBP/USD outlook shows a recovery from Friday’s lows after UK PMI data revealed accelerating price pressures. However, the long-term outlook for the pair remains bleak amid dollar strength and a stalled UK economy. –Are you interested to learn more about forex options trading? Check our detailed guide- Data on Monday showed that business activity in the UK stalled in December. The flash composite PMI held at 50.5, slightly below the forecast of 50.7. However, the report also showed that prices charged by companies accelerated at the fastest rate in nine months, indicating a spike in inflation. Market participants focused on this as it might keep the Bank of England cautious. However, other data on Friday revealed that the UK economy unexpectedly contracted in October. Therefore, the outlook for the economy remains uncertain. The BoE will hold its policy meeting on Thursday, and markets expect policymakers to keep rates unchanged. However, in 2025, things might change if data continues pointing to soft economic demand. Meanwhile, the greenback remained steady after a strong week where markets slashed bets for Fed rate cuts in 2025. However, traders are almost fully pricing a 25-bps rate cut this week. At the same time, the looming shift in leadership in the US will likely keep the dollar strong. Trump’s policy proposals might come into effect in 2025, boosting the greenback and weighing on the pound. GBP/USD key events today US flash manufacturing PMI US flash services PMI GBP/USD technical outlook: Price rebounds after meeting the 0.618 Fib On the technical side, the GBP/USD price has rebounded for the first time since it broke below its bullish trendline. The rebound comes after the price fell to the 0.618 Fib retracement level, which acted as a strong support level. During this decline, the price broke below the 1.2651 support level, which might now act as resistance. –Are you interested to learn more about forex tools? Check our detailed guide- Notably, the price trades well below the 30-SMA and the RSI is below 50, a sign that bears are in the lead. Therefore, the downtrend will likely continue after the brief recovery. The price might reverse at the 1.2651 level or continue to the 30-SMA before dropping. A continuation of the downtrend will allow bears to target a major support level at 1.2500. https://www.forexcrunch.com/blog/2024/12/16/gbp-usd-outlook-uk-pmi-highlights-rising-price-pressures/
2024-12-16 12:28
The euro dropped on Monday due to dovish comments from a top ECB official. Eurozone business activity improved in December. The dollar extended its gains as markets anticipated a more cautious Fed. The EUR/USD forecast shows a surge in European Central Bank rate cut bets after dovish policymaker remarks. Meanwhile, PMI data showed a slight rebound in the Eurozone economy. However, business activity remained in contraction, showing a frail economy. –Are you interested to learn more about forex options trading? Check our detailed guide- The euro dropped on Monday due to dovish comments from a top ECB official. ECB Vice President Luis De Guindos said that inflation in the Eurozone bloc would likely hold at the 2% target in 2025. Moreover, he noted that the central bank will continue cutting rates if inflation meets forecasts. The European Central Bank lowered borrowing costs by 25-bps on Thursday. At the same time, policymakers remained dovish, forecasting more cuts due to the weak economy and uncertainty about likely tariffs in the US. Such an outlook will likely weigh on the euro, especially since it diverges with the US outlook. Furthermore, data on Monday revealed that business activity in the Eurozone improved in December due to growth in the services sector. Notably, the flash composite PMI increased from 48.3 in November to 49.5 in December. Meanwhile, economists had expected a drop to 48.2. However, business activity remains in contraction below 50. Elsewhere, the dollar extended its gains as markets anticipated a more cautious Fed in the coming year. Nevertheless, traders have fully priced a rate cut this week. Meanwhile, the likelihood of a January cut remains low at 24%. EUR/USD key events today US flash manufacturing PMI US flash services PMI EUR/USD technical forecast: Bears make another attempt at 1.0475 support On the technical side, the EUR/USD price is bouncing lower after finding a strong barrier at the 30-SMA. Meanwhile, the RSI trades below 50, suggesting solid bearish momentum. However, bears have found it difficult to break below the 1.0475 support, which coincides with the 0.5 Fib retracement level. –Are you interested to learn more about forex tools? Check our detailed guide- A break below this zone would allow the price to make lower lows and reach the 1.0400 key support level. Such an outcome would signal a new downtrend. On the other hand, if the support zone holds firm, the price might break above the SMA to retest the 1.0601 resistance level. However, bulls would have to break above this resistance to confirm a new bullish trend. https://www.forexcrunch.com/blog/2024/12/16/eur-usd-forecast-euro-sinks-on-dovish-ecb-remarks/
2024-12-14 13:45
US inflation data showed an increase in price pressures in November. Market participants scaled back expectations for Fed rate cuts in 2025. Traders expect policy meetings in the UK and the US. The GBP/USD weekly forecast indicates a decline in 2025 Fed rate cut expectations, which is supporting the greenback. Ups and downs of GBP/USD The GBP/USD pair had a bearish week as the dollar soared on rate-cut expectations and the pound fell due to downbeat economic data. Notably, markets absorbed US inflation data showing an increase in price pressures that was in line with estimates. The report also showed that inflation had stalled its progress to the 2% target. As a result, market participants scaled back expectations for rate cuts in 2025, boosting the dollar. –Are you interested to learn more about forex options trading? Check our detailed guide- Meanwhile, the UK released data showing an unexpected 0.1% contraction in the economy, further weighing on the pair. Next week’s key events for GBP/USD Next week will be a busy week for the pound with policy meetings in the UK and the US. At the same time, traders will watch data from the UK, including manufacturing business activity, employment, inflation, and sales. Meanwhile, the US will release figures on GDP and retail sales. Markets are almost fully pricing a Fed rate cut on Wednesday. Therefore, data next week might have little impact on rate cut expectations. However, the report might shape the outlook for 2025. Moreover, market participants will watch policymakers’ tone on future rate cuts. On the other hand, UK data, especially inflation, might play a big role in shaping the outlook for the Bank of England meeting. Nevertheless, markets expect a pause. GBP/USD weekly technical forecast: Bears resurface after false breakout On the technical side, the GBP/USD price trades below the 22-SMA with the RSI under 50, suggesting a bearish bias. The price has been on a downtrend, making lower highs and lows. However, bulls have made several attempts to break above the SMA without success. –Are you interested to learn more about forex tools? Check our detailed guide- In the most recent attempt, the price broke above the 22-SMA and its resistance trendline. However, price action showed weakness when the price reached the 1.2800 resistance level. Furthermore, bears returned with strong enthusiasm to push the price back below the trendline and the SMA. As a result, the price made a false breakout. However, bears seem ready to continue the downtrend. To do this, the price must break below the 1.2500 support to make a lower low. https://www.forexcrunch.com/blog/2024/12/14/gbp-usd-weekly-forecast-dollar-soars-on-fading-feds-cut/
