2024-11-16 17:46
Trump’s policies will likely boost economic growth and inflation. The Fed might be forced to keep rates at a restrictive level longer. The UK economy unexpectedly contracted. The GBP/USD weekly forecast is bleak as the pound collapses against a strong dollar amid the Trump trade weaker UK GDP. Ups and downs of GBP/USD The GBP/USD pair had a very bearish week as the Trump trade boosted the dollar and weighed on the pound. Despite various economic reports from the UK and the US, markets were focused on the looming shift in policies in the US. Trump’s policies will likely boost economic growth and inflation. Therefore, the Fed might be forced to keep rates at a restrictive level longer. High interest rates boost Treasury yields and the greenback. Meanwhile, US inflation data aligned with expectations, leaving rate-cut bets mostly unchanged. However, Powell’s remarks that there was no hurry to cut rates slashed bets to below 50%. On the other hand, the UK economy unexpectedly contracted, further weighing on the pound. Next week’s key events for GBP/USD Next week, market participants will focus on key economic reports from the UK, including consumer inflation, retail sales, and business activity. Inflation in the UK recently dropped below the Bank of England’s target to hit 1.7%. The decline was initially a big motivator for the central bank to lower borrowing costs. However, policymakers remained cautious, noting that the economy might perform better than expected in the medium term. Therefore, inflation might rebound. A better-than-expected CPI reading will lower rate-cut expectations and boost the pound. Meanwhile, a downbeat report will weigh on the currency. GBP/USD weekly technical forecast: Decline could pause at 1.2600 On the technical side, the GBP/USD price has plunged to the 1.2600 support level. The new swing long has put the price well below the 22-SMA, showing bears are in the lead. At the same time, the RSI has reached the oversold region, suggesting solid bearish momentum. This week, the GBP/USD price only made bearish candles, showing a strong bias. The decline started after the price broke below and retested the 1.3002 key level. At the same time, the price was retesting the 22-SMA as resistance. It bounced lower, breaching the 1.2801 support before pausing at the 1.2600 level. However, after such a steep decline, the price might need a pause next week before it continues lower. https://www.forexcrunch.com/blog/2024/11/16/gbp-usd-weekly-forecast-pound-suffers-in-trump-trade-era/
2024-11-15 13:23
The UK economy unexpectedly contracted in October. The pound has lost nearly 2% of its value against the dollar this week. Market participants are awaiting the US retail sales report. The GBP/USD price analysis shows an unexpected contraction in the UK economy, which has put the pound in a vulnerable position. On the other hand, the dollar is heading for a weekly gain amid optimism that Trump’s policies will spur growth. Meanwhile, investors remain cautious ahead of the US retail sales report. –Are you interested to learn more about low spread forex brokers? Check our detailed guide- Data on Friday revealed that the UK economy unexpectedly contracted in October. The GDP came in at -0.1%, compared to estimates of a 0.2% increase. This was a disappointment for the new government which is focused on increasing economic growth. At the same time, it increased pressure on the Bank of England to continue lowering borrowing costs. The pound has had a rough week that has ended with downbeat data. It has lost nearly 2% of its value against the dollar. Meanwhile, analysts are projecting robust growth and high inflation in the US under Trump’s administration. Consequently, the greenback has rallied to a one-year high against most of its peers. Inflation data on Wednesday failed to capture traders’ attention as it aligned with expectations. However, Powell’s speech on Thursday further boosted the dollar. The Fed Chair said there was no hurry to lower borrowing costs since the economy remained strong. His remarks led to a sharp drop in Fed rate cut bets, with markets now pricing a 48.3% chance of a rate cut in December. Market participants are awaiting the US retail sales report for more clues on Fed policy. A higher-than-expected reading will further slash bets for a December rate cut. On the other hand, a downbeat report will weigh on the dollar. GBP/USD key events today US core retail sales m/m US retail sales m/m GBP/USD technical price analysis: Downtrend pauses, but bears eye 1.2600 On the technical side, the GBP/USD price has paused its decline at the 1.2650 support level. The price trades well below the 30-SMA, and the RSI is still near the oversold region. Therefore, the pair has a strong bearish bias. A pullback would retest the 1.2750 resistance level or the 30-SMA before bears take back control. Meanwhile, a strong catalyst might allow the downtrend to continue beyond the 1.2600 key psychological level. https://www.forexcrunch.com/blog/2024/11/15/gbp-usd-price-analysis-uk-economy-records-surprise-downturn/
2024-11-15 10:45
The greenback has had one of the best weeks in over a month. Powell assumed a more hawkish tone on Thursday. Australia’s economy added 15,900 jobs, compared to estimates of 25,200. The AUD/USD outlook suggests solid bearish sentiment as the dollar trades near a one-year high against its peers due to the ongoing Trump trade. At the same time, Powell struck a slightly hawkish tone on Thursday, which led to a drop in December Fed rate cut expectations, further boosting the dollar. On the other hand, the Aussie remained weak after downbeat employment data. –Are you interested to learn more about low spread forex brokers? Check our detailed guide- The greenback has had one of the best weeks in over a month amid optimism over Trump’s presidential win. Trump’s policy proposals on tax cuts and import tariffs have significantly impacted major currencies. Analysts expect more robust economic demand under the new administration. Therefore, inflation might spike, putting the Fed in a difficult position. Policymakers might pause rate cuts, which is bullish for the greenback. Meanwhile, Powell assumed a more hawkish tone on Thursday, saying there was no hurry to cut interest rates since the economy remains robust. He also noted that demand in the labor market was robust. His remarks lowered bets of a December Fed rate cut from 82.5% to 48.3%. At the same time, the likelihood of a pause has increased. Meanwhile, markets are only expecting 71 bps of cuts in 2025. On the other hand, data on Thursday revealed that Australia’s economy added 15,900 jobs, compared to estimates of 25,200. Moreover, it was a significant drop from the previous reading of 61,300. This report was the first sign that high interest rates are easing demand in the labor sector. However, the RBA will likely remain hawkish until there is more evidence that the economy is cooling down. AUD/USD key events today US core retail sales m/m US retail sales m/m AUD/USD technical outlook: Downtrend pauses at 0.6450 support On the technical side, the AUD/USD price has paused at the 0.6450 support level after a sharp decline. It trades below the 30-SMA with the RSI near the oversold region, supporting a strong bearish bias. Therefore, bears might soon make new lows after the pause. Initially, the downtrend paused at the 0.6550 support level. Here, the price made a corrective bullish move to the 0.6680 resistance level. However, a surge in bearish momentum allowed AUD/USD to continue the downtrend by breaking below 0.6550. https://www.forexcrunch.com/blog/2024/11/15/aud-usd-outlook-dollar-thrives-on-trump-trade-momentum/
2024-11-14 10:19
The yen has lost around 30% of its value against the dollar since 2020. US Treasury yields and the dollar have risen since Trump won. US consumer inflation rose as expected in October. The USD/JPY outlook shows sharp declines in the yen as the dollar scales new peaks due to optimism about Trump’s election win. Meanwhile, top officials in Japan are getting concerned about a weak yen, with some urging the BoJ to hike rates. –Are you interested to learn more about low spread forex brokers? Check our detailed guide- According to data from the Bank of Japan, the yen has lost around 30% of its value against the dollar since 2020. This decline has come from low interest rates in Japan, which has created a wide rate differential with the US. However, the BoJ recently shifted to rate hikes before pausing amid concerns about market volatility. Meanwhile, US Treasury yields and the dollar have risen since Trump won the election. At the same time, Fed rate cut expectations have dropped. Therefore, the hope of quickly shrinking the rate gap is fading. On Thursday, a top opposition leader said that the Bank of Japan should raise rates to 1% to support the weak yen. Moreover, he added that the central bank should be vocal about its plans. Meanwhile, data on Wednesday revealed that US consumer inflation rose as expected in October. On a monthly basis, it increased by 0.2%, while annually, it rose by 2.6%. Therefore, the Fed will likely lower borrowing costs by 25-bps in December. However, the outlook for rate cuts in 2025 has changed with Trump as the new president. His policies on taxes and trade will likely be inflationary. Therefore, the Fed might have to pause or cut rates more slowly than expected. Elsewhere, the US will release wholesale inflation and retail sales figures, which will continue to shape bets on a December Fed rate cut. Moreover, market participants will pay attention to Powell’s speech. USD/JPY key events today US core PPI m/m US PPI m/m US unemployment claims Fed Chair Powell speaks USD/JPY technical outlook: Uptrend continues above 156.02 On the technical side, the USD/JPY price has reached a new peak near the 156.02 key level. The price trades well above the 30-SMA, indicating a strong bullish move. Moreover, bullish momentum is strong, with the RSI in the overbought region. Initially, the price had struggled to breach the 154.00 resistance level. However, when it did, bulls confirmed a continuation of the previous bullish trend. https://www.forexcrunch.com/blog/2024/11/14/usd-jpy-outlook-trump-trade-sparks-sharp-rally-against-yen/
2024-11-14 09:24
US consumer prices increased by 0.2% in October. Traders expect Trump’s policies to drive inflation and pause or significantly slow Fed rate cuts. BoE’s Catherine Mann noted that inflation might be higher than expected in the medium term. The GBP/USD forecast shows the dollar at new peaks as the Trump trade overshadows recent inflation figures. As a result, the pound remained weak against the greenback despite hawkish remarks from policymakers. –Are you interested to learn more about low spread forex brokers? Check our detailed guide- On Wednesday, the US released its CPI report, which aligned with expectations. Consumer prices increased by 0.2% in October, while core prices increased by 0.3%. Meanwhile, the annual figure rose by 2.6%. Since the increase in inflation was expected, the Fed will likely lower borrowing costs in December. The dollar initially retreated before climbing as market participants shifted their focus to Trump’s win. Traders expect Trump’s policies to drive inflation and pause or significantly slow Fed rate cuts. The next significant reports will include wholesale inflation and retail sales. Producer prices are a leading indicator of future consumer prices. Therefore, rate-cut bets might ease if producer prices are higher than expected. The opposite is also true. Meanwhile, retail sales will show consumers’ financial health. High sales will show robust consumer spending, reducing rate-cut bets. On the other hand, low sales will indicate weak consumer spending, solidifying bets for a December rate cut. Meanwhile, in the UK, Bank of England policymaker Catherine Mann noted that inflation might be higher than expected in the medium term. Mann is the only policymaker who voted against a rate cut at the last BoE meeting. Market bets for rate cuts in the UK have dropped since the reading of the new government budget. The BoE might only cut rates twice next year. GBP/USD key events today Core PPI m/m PPI m/m Unemployment Claims Fed Chair Powell Speaks GBP/USD technical forecast: Bearish momentum head for the 1.2650 level On the technical side, the GBP/USD price has broken below the 1.2750 key support to make a new low in the downtrend. Moreover, the price trades well below the 30-SMA, showing bears have a strong lead. At the same time, the RSI is in the oversold region, indicating solid bearish momentum. The next target for the pair is at the 1.2650 support level. However, after such a steep collapse, bulls might be preparing to return for a pullback to the 1.2750 level or the 30-SMA. https://www.forexcrunch.com/blog/2024/11/14/gbp-usd-forecast-trump-trade-eclipses-inflation-data/
2024-11-13 12:45
Economists expect the US monthly CPI to increase by 0.2%. Trump’s import tariffs will affect Canada’s economy. OPEC lowered its forecast for oil demand growth this year and in 2025. The USD/CAD forecast shows a tight consolidation as traders prepare for the US consumer price index report. Meanwhile, the Canadian dollar remained fragile as oil prices dropped due to China’s demand concerns. –Are you interested to learn more about low spread forex brokers? Check our detailed guide- Economists expect the US monthly CPI to increase by 0.2%, similar to September’s increase. Meanwhile, the annual figure might increase by 2.6%, higher than September’s increase of 2.4%. An unexpected jump will boost the dollar by lowering the chances of a December Fed rate cut. On the other hand, if inflation misses forecasts, the dollar will retreat due to an increase in rate-cut expectations. Recently, Fed rate cut expectations have dropped as traders expect higher inflation with Trump’s administration. Trump’s policy proposals, such as tax cuts and import tariffs, will boost business in the US and increase demand. Therefore, inflation will shoot up, complicating the outlook for Fed rate cuts. The Fed has maintained high interest rates to lower inflation to the 2% target. However, if price pressures increase before the central bank achieves its goal, policymakers might vote to hold rates at restrictive levels. Moreover, a continued rise in inflation could prompt the central bank to hike rates. This outlook has boosted the greenback against most major peers, including the Canadian dollar. Furthermore, import tariffs will affect Canada’s economy since most of its exports end up in the US. Meanwhile, the loonie was weak on Wednesday as oil prices fell on demand concerns. OPEC lowered its forecast for oil demand growth this year and in 2025 due to China’s weak consumption. USD/CAD key events today Core CPI m/m CPI m/m CPI y/y USD/CAD technical forecast: Bulls make a third attempt at 1.3951 resistance On the technical side, the USD/CAD price is testing the 1.3951 resistance level. The price trades above the 30-SMA with the RSI above 50. Therefore, bulls are in the lead. However, they have made several failed attempts to breach the 1.3951 resistance. Moreover, the price has made a bearish engulfing candle that signals a looming reversal. If the price fails to breach the resistance, it will fall below the 30-SMA to retest the 1.3825 support level. On the other hand, if bullish momentum surges, the price will make a higher high, continuing the previous bullish trend. https://www.forexcrunch.com/blog/2024/11/13/usd-cad-forecast-tight-consolidation-ahead-of-us-cpi/
