2024-12-14 13:38
US consumer price pressures accelerated in November. Data this week solidified bets for a December Fed rate cut. The likelihood of a December BoJ rate hike fell. The USD/JPY weekly forecast suggests continued dollar strength as markets price a more gradual Fed next year. Ups and downs of USD/JPY The USD/JPY pair had a bullish week as the dollar soared on expectations of a very gradual Fed rate-cutting cycle in 2025. Data from the US on inflation this week revealed that price pressures accelerated in November. However, since the CPI came in line with expectations, it solidified bets for a December Fed rate cut. Nevertheless, markets lowered expectations for rate cuts in 2025, boosting the US dollar. –Are you interested to learn more about forex options trading? Check our detailed guide- At the same time, the likelihood of a December BoJ rate hike fell as Japan’s economy remained fragile. Next week’s key events for USD/JPY Next week, traders will watch the US retail sales report, the FOMC policy meeting, and the US GDP report. Meanwhile, in Japan, the BoJ will hold its policy meeting on Thursday. The US sale report will come before the FOMC meeting. Therefore, the outcome will likely shape bets for the Wednesday policy meeting. Markets expect the Fed to cut interest rates by 25-bps. However, the focus will be on the messaging for future moves. Meanwhile, the Bank of Japan might keep rates unchanged. However, traders will also watch the messaging to gauge the likely timing for the next rate hike. USD/JPY weekly technical forecast: Bulls return with sights on the 156.53 resistance On the technical side, the USD/JPY price has broken above the 22-SMA, a sign that bulls are back in control. At the same time, the RSI has broken above 50 and now trades in bullish territory. Therefore, there has been a shift in sentiment to bullish. –Are you interested to learn more about forex tools? Check our detailed guide- The price was trading in a strong uptrend before pausing near the 156.53 resistance level. Here, bears resurfaced to reverse the trend by breaking below the 22-SMA. However, the decline met a solid support zone comprising the 149.02 key level and the 0.382 Fib retracement level. Here, bulls returned with renewed strength, pushing the price back above the 22-SMA. Next week, USD/JPY will likely target the 156.53 resistance level. A break above this level would confirm a continuation of the bullish trend. Moreover, it will allow bulls to reach the 160.02 key level. https://www.forexcrunch.com/blog/2024/12/14/usd-jpy-weekly-forecast-odds-of-cautious-fed-in-2025/
2024-12-13 10:22
The UK economy contracted by 0.1% in October. US wholesale inflation increased by 0.4%, above estimates of 0.2%. The dollar is getting support from the wave of rate cuts in other major economies. The GBP/USD price analysis suggests a strong bearish bias after data revealed that the UK economy unexpectedly contracted in October. Meanwhile, the US dollar remained steady despite a high chance the Fed will cut rates in December. -If you are interested in Islamic forex brokers, check our detailed guide- Data on Friday revealed that the UK economy contracted by 0.1% in October, compared to the 0.1% economists had expected. The unexpected decline might prompt traders to increase their bets on Bank of England rate cuts next year. Meanwhile, the greenback remained steady despite a surge in December Fed rate cut expectations. The US CPI report, which came in line with expectations, solidified bets for a December rate cut. However, the downtrend for inflation has paused. At the same time, wholesale inflation increased by 0.4%, above estimates of 0.2%. As a result, policymakers have assumed a more cautious tone. Meanwhile, market participants are pricing fewer rate cuts in 2025. The dollar is also getting support from the wave of rate cuts in major economies like Canada and the Eurozone. While the outlook for the US economy is bright under Trump’s administration, the Eurozone and Canada will likely suffer. As a result, the ECB and the BoC will likely keep cutting interest rates next year at a faster pace than the Fed, giving the dollar an edge. GBP/USD key events today After the GDP report, market participants do not expect any major events from the US or the UK. GBP/USD technical price analysis: Channel breakout On the technical side, the GBP/USD price has collapsed and broken below the 1.2701 support level. At the same time, the price has broken out of its shallow bullish channel, indicating a reversal. It now trades well below the 30-SMA, indicating a strong bearish move. Meanwhile, the RSI is about to dip into the oversold region, showing solid bearish momentum. -If you are interested in brokers with Nasdaq, check our detailed guide- Previously, the price was trading in a strong downtrend. However, it paused and entered a bullish channel in a corrective move. The recent impulsive break is a sign that bears have returned and are ready to resume the downtrend. Consequently, the price might soon retest the 1.2600 support level and the 0.618 key Fib retracement level. https://www.forexcrunch.com/blog/2024/12/13/gbp-usd-price-analysis-sellers-dominate-as-uk-gdp-shrinks/
2024-12-13 08:25
The European Central Bank lowered borrowing costs by 25 bps on Thursday. Experts believe Trump’s tariffs might further weaken the Eurozone economy. Recent data has reinforced bets for a December Fed rate cut. The EUR/USD outlook shows a growing divergence in policy outlooks between the European Central Bank and the Federal Reserve. As a result, the euro fell against the dollar on Friday. Meanwhile, in the US, traders expect a rate cut in December but have slashed bets for cuts in 2025. -If you are interested in Islamic forex brokers, check our detailed guide- The European Central Bank lowered borrowing costs by 25 bps on Thursday, the fourth such move this year. Moreover, the central bank kept the door open for more rate cuts, noting that inflation had fallen significantly and the economy remained fragile. At the same time, experts believe Trump’s tariffs might further weaken the economy. Consequently, there might be more cts in 2025. Meanwhile, markets expect the opposite in the US. The upcoming Trump administration will be good for the economy. Therefore, inflation will likely increase, putting a pause on Fed rate cuts. The divergence in policy outlooks will likely keep downward pressure on the euro. However, recent data has reinforced bets for a December Fed rate cut. Consumer inflation rose more than the previous month but came in line with expectations. Meanwhile, wholesale inflation jumped by 0.4%, above estimates of a 0.2% increase. Although the data did not change the outlook for December, it suggested a more gradual rate-cut pace next year. EUR/USD key events today Market participants do not expect any high-impact economic reports from the Eurozone or the US. Therefore, the pair might end the week quietly. EUR/USD technical outlook: Bears break consolidation On the technical side, the EUR/USD price has broken below the 1.0475 key support level. As a result, the price has fallen further below the 30-SMA, supporting a bearish bias. Meanwhile, the RSI is approaching the oversold region, indicating solid bearish momentum. -If you are interested in brokers with Nasdaq, check our detailed guide- Before the break, the price was trading in a range with support at 1.0475 and resistance at 1.0601. The price entered this consolidation after a downtrend. Therefore, it might have been a corrective move as bears rested. If this is the case, the downtrend might soon continue. Therefore, the price will likely revisit the 1.0400 support level. A break below this level will make a lower low to continue the previous downtrend. https://www.forexcrunch.com/blog/2024/12/13/eur-usd-outlook-ecb-and-fed-divergence-leading-bears/
2024-12-12 08:32
The Bank of Canada shifted to a more hawkish tone that boosted the Canadian dollar. The dollar was weak after US inflation data came in line with expectations. Traders increased the likelihood of a December Fed rate cut from 85% to 97%. The USD/CAD outlook shows a stronger loonie after Wednesday’s Bank of Canada policy meeting, where policymakers struck a slightly cautious tone. Meanwhile, the dollar was fragile as US inflation figures supported bets for a December Fed rate cut. -If you are interested in Islamic forex brokers, check our detailed guide- The Bank of Canada cut rates by 50-bps on Wednesday but shifted to a more hawkish tone that boosted the Canadian dollar. Markets had expected a massive rate cut. However, the outcome should have weakened the Canadian dollar. Nevertheless, the central bank governor said that future rate cuts will likely be gradual, hinting at a cautious outlook. Moreover, he noted that the threats of high tariffs on Canadian exports to the US have created uncertainty about the outlook for the economy. Meanwhile, experts believe the tariffs will prompt the Bank of Canada to further lower borrowing costs. Tariffs will hurt the economy, piling pressure on policymakers to spur growth. On the other hand, the dollar was weak after US inflation data came in line with expectations, boosting bets for a December Fed rate cut. The CPI increased by 0.3% in November, above the previous reading of 0.2%. Meanwhile, the annual figure increased by 2.7%, above the previous reading of 2.6%. However, since it was in line with forecasts, traders increased the likelihood of a December rate cut from 85% to 97%, weighing on the greenback. USD/CAD key events today US core PPI m/m US PPI m/m US unemployment claims USD/CAD technical outlook: Bulls corrected to retests 30-SMA On the technical side, the USD/CAD price has pulled back to the 30-SMA support after making new highs above the 1.4150 resistance level. However, the uptrend remains intact since the price is still on the upper side of the SMA. At the same time, although bears have pushed the price lower, it has been a weak move with small-bodied candles and wicks. Therefore, it is likely a brief corrective move. -If you are interested in brokers with Nasdaq, check our detailed guide- If bulls resurface at the 30-SMA, the price will bounce higher to target the 1.4201 key level. A break above this level would make a new high, continuing the bullish trend. A reversal will only occur if bears breach the 30-SMA and start making lower highs and lows. https://www.forexcrunch.com/blog/2024/12/12/usd-cad-outlook-loonie-surges-amid-bocs-cautious-tone/
2024-12-12 07:42
Data on Thursday revealed that job growth in Australia surged in November. Markets slashed bets for a February RBA rate cut from 68% to 55%. The US CPI increased by 0.3% in November and 2.7% annually, as expected. The AUD/USD forecast made a sharp bullish turn on Thursday after a surprise jump in Australia’s employment. Meanwhile, the greenback dropped after inflation figures met expectations, raising the likelihood of a December Fed rate cut. -If you are interested in Islamic forex brokers, check our detailed guide- Data on Thursday revealed that job growth in Australia surged in November. The economy added 35,600 jobs compared to estimates of 26,000. At the same time, the unemployment rate dropped from 4.1% to an eight-month low of 3.9%. Meanwhile, economists had expected it to increase to 4.2%. The report led to a decline in bets for a February RBA rate cut from 68% to 55%. As a result, the Australian dollar soared against the dollar. The move was a sudden reversal from new lows hit in the previous session. Initially, markets had raised the likelihood of a February RBA cut after a slightly dovish policy meeting. Policymakers acknowledged recent progress in lowering inflation, pushing the Aussie down. However, with such a resilient labor market, they might resume their cautious tone. Meanwhile, the US dollar fell after data in the previous session showed inflation coming in line with expectations. The CPI increased by 0.3% in November and 2.7% annually. Since there was no surprise, markets increased the likelihood of a December Fed rate cut from 55% to 68%. However, the increase is also a sign that inflation has stalled above the 2% target, which could slow the Fed next year. AUD/USD key events today US core PPI m/m US PPI m/m AUD/USD technical forecast: Bulls ignite above 30-SMA On the technical side, the AUD/USD price has rebounded and broken above the 30-SMA, indicating a shift in sentiment. At the same time, the RSI has broken above 50 and now trades in bullish territory. Initially, bears broke below the 0.6375 support level to make a new low in the downtrend. -If you are interested in brokers with Nasdaq, check our detailed guide- However, they could not sustain this move as bulls returned with solid momentum. Nevertheless, the bias remains bearish since the price is in a downtrend pattern with lower highs and lows. To confirm a reversal, the price must break above its resistance trendline and the 0.6450 resistance level to start making higher highs and lows. https://www.forexcrunch.com/blog/2024/12/12/aud-usd-forecast-aussie-jumps-as-jobs-data-surprises/
2024-12-11 10:30
Authorities in China are considering a weaker currency. Chinese exports slowed in November. Market participants eagerly await the US inflation report. The AUD/USD forecast suggests further weakness for the Aussie after reports that China is considering a weaker Yuan in its efforts to boost economic growth. At the same time, the Reserve Bank of Australia softened its tone on inflation, leading to a surge in rate cut expectations. Meanwhile, there was caution ahead of the US CPI print, which will shape the outlook for Fed rate cuts. -If you are interested in Islamic forex brokers, check our detailed guide- The Aussie plunged on Tuesday, with the major catalysts coming from China. Authorities in the country are considering a weaker currency as a further stimulus for the fragile economy. Recently, top officials announced plans to loosen monetary policy to revive the economy. A looser monetary policy comes with a weaker currency. China is intensifying its bid to spur economic growth after Trump’s threats to impose tariffs on Chinese goods. Such a move might weaken an already fragile economy. Meanwhile, data on Tuesday revealed that Chinese exports slowed in November. At the same time, imports shrank. The weak data weighed on the Australian dollar since China is Australia’s biggest trading partner. The Aussie has also fallen since the Reserve Bank of Australia meeting, where policymakers assumed a softer tone on inflation. The RBA is gaining confidence that inflation is dropping, which has raised the likelihood of a February rate cut to 62%. Elsewhere, market participants eagerly await the US inflation report for more clues on Fed rate cuts. Forecasts show a monthly increase of 0.3% and an annual increase of 2.7%. AUD/USD key events today US core CPI m/m US CPI m/m US CPI y/y AUD/USD technical forecast: Bears pounce 0.6375 On the technical side, the AUD/USD price has broken below the 0.6375 support level after a surge in bearish momentum. As a result, it has fallen well below the 30-SMA, showing a strong bearish lead. At the same time, the RSI is approaching the oversold region, indicating increased enthusiasm to push the price lower. -If you are interested in brokers with Nasdaq, check our detailed guide- Meanwhile, the breakout move has made a lower low, showing a continuation of the downtrend. Initially, bulls failed to break above the 30-SMA. As a result, the price made a false breakout pattern that later led to a sharp drop. If the downtrend continues, AUD/USD will soon breach the 0.6325 level. https://www.forexcrunch.com/blog/2024/12/11/aud-usd-forecast-aussie-tumbles-following-weaker-yuan/
