2024-10-09 09:07

Economists believe the European Central Bank will cut rates in October and December. Eurozone inflation fell below 2% in September. Traders will go through the Fed’s meeting minutes. The EUR/USD price analysis indicates a continuing slump as market participants price more European Central Bank rate cuts for this year. At the same time, the dollar paused after rallying to a seven-week high due to a robust US labor market report. –Are you interested to learn more about day trading brokers? Check our detailed guide- A majority of economists polled by Reuters on Tuesday believe the European Central Bank will cut rates in October and December. During both meetings, the central bank might implement 25-bps cuts. The new forecast is a shift from a month ago when they expected one more rate cut in December. Notably, Eurozone inflation fell below 2% in September, giving policymakers confidence that the fight was nearly over. As a result, ECB president Christine Lagarde hinted at another rate cut in October. Lower borrowing costs will weigh on the euro, especially since the US economy remains resilient, boosting the dollar. On Wednesday, the dollar drifted sideways after climbing to new peaks. The recent rally followed a better-than-expected nonfarm payrolls report. Initially, the Fed had implemented a significant rate cut, fearing deterioration in the labor market. Consequently, traders expected a similar rate cut in November and it weighed on the dollar. However, the monthly employment figures showed robust job growth and a softer unemployment rate. As a result, expectations shifted to reflect an 86% chance of a 25-bps rate cut in November. Later in the day, traders will go through the Fed’s meeting minutes, which might contain clues regarding future moves. Furthermore, the US CPI report on Thursday will show whether the central bank is winning its battle against inflation. EUR/USD key events today FOMC Meeting Minutes EUR/USD technical price analysis: Bears seek new lows On the technical side, the EUR/USD price is challenging the 1.0950 support level a second time. It trades well below the 30-SMA, with the RSI near the oversold region, supporting a bearish bias. -Are you looking for the best AI Trading Brokers? Check our detailed guide- Bears recently broke below the 1.1000 support level with a solid candle. The price then pulled back to retest the level and is now seeking new lows. However, the RSI has made a bullish divergence, indicating fading bearish momentum. Therefore, EUR/USD might rebound if bears do not regain momentum. https://www.forexcrunch.com/blog/2024/10/09/eur-usd-price-analysis-markets-brace-for-more-ecb-rate-cuts/

2024-10-08 10:26

Oil prices dipped as supply disruption fears eased. The pair got a boost from Friday’s upbeat US nonfarm payrolls report. Traders are pricing an 86% chance of a 50-bps Fed rate cut in November. The USD/CAD price analysis suggests further upside for the pair as the Canadian dollar weakens amid a decline in oil prices. Simultaneously, the dollar strengthened as market participants slashed Fed rate cut bets. –Are you interested to learn more about day trading brokers? Check our detailed guide- Oil prices dipped on Tuesday as supply disruption fears eased in the calm after Iran attacked Israel. Markets have paused as they wait to see whether Israel will retaliate. Retaliation could mean attacks on Iranian oil that would tighten the market and push prices higher. A pullback in oil weighed heavily on the Canadian dollar. As a result, the USD/CAD pair rallied. Furthermore, the pair got a boost from Friday’s US nonfarm payrolls report, which shifted the outlook for Fed rate cuts. Before the figures, markets were pricing an over 30% chance of a 50-bps rate cut in November. However, data revealed an unexpected 254,000 new jobs in the US. Moreover, the unemployment rate eased to 4.1%, suggesting a resilient labor market. Consequently, market participants adjusted rate cut bets, pricing an 86% chance of a 50-bps rate cut in November. A shift from an aggressive to a gradual pace is bullish for the dollar, but only for a while. As long as borrowing costs continue dropping, the greenback will suffer. All eyes are now on the upcoming US CPI report. Inflation has consistently fallen, and economists expect it to reach 2.3% in September. Policymakers are also more confident that inflation will reach the 2% target. Therefore, the report might not significantly change the outlook for rate cuts. USD/CAD key events today There won’t be any significant reports from Canada or the US. Therefore, market participants will watch developments in the Middle East war. USD/CAD technical price analysis: Limited bullish momentum On the technical side, the USD/CAD price has maintained a steep rally since breaking above and retesting the 30-SMA. Since then, it has broken above several key resistance levels. Bulls are now targeting the 1.3650 resistance level. -Are you looking for the best AI Trading Brokers? Check our detailed guide- However, the RSI currently sits in the overbought region, indicating a maximum for bulls. Therefore, they might not be strong enough to breach 1.3650 without first pulling back. A retreat would allow the pair to retest the 1.3600 level or the 30-SMA. https://www.forexcrunch.com/blog/2024/10/08/usd-cad-price-analysis-oil-slump-drags-cad-down/

2024-10-08 09:11

The Australian dollar fell after the RBA meeting minutes sounded slightly dovish. The US economy added an unexpected 254,000 jobs in September. Economists expect US price pressures to ease from 2.5% to 2.3%. The AUD/USD outlook shows a steep downtrend as the Aussie tumbles after the Reserve Bank of Australia meeting minutes. Meanwhile, the dollar held firm as market participants adjusted the outlook for Fed rate cuts. –Are you interested to learn more about day trading brokers? Check our detailed guide- The Australian dollar fell on Tuesday after RBA meeting minutes sounded slightly dovish. However, a shift to a completely dovish tone might take longer since policymakers are still concerned about inflation. Moreover, the RBA might not start cutting interest rates until later next year. Meanwhile, in the US, traders expect a smaller rate cut in November compared to earlier expectations of another 50-bps rate cut. The outlook shifted after Friday’s nonfarm payrolls report. According to the report, the US economy added an unexpected 254,000 jobs in September. At the same time, the unemployment rate eased slightly to 4.1%. A robust labor sector gives the Fed enough room to gradually lower borrowing costs. Even before the employment figures, Fed Chair Powell had struck a hawkish tone, stating that the central bank’s next moves might be small. Currently, markets are pricing an 86% chance of a 25-bps rate cut in November. The next major report will show the state of consumer inflation. Economists expect price pressures to ease from 2.5% to 2.3%, inching closer to the Fed’s 2% target. Meanwhile, the monthly figure might increase by 0.1% after a 0.2% increase in the previous month. AUD/USD key events today Market participants do not expect any high-impact reports today. Therefore, the pair might extend its downtrend with traders absorbing the shift in the Fed’s policy outlook. AUD/USD technical outlook: 0.618 Fib break signals bearish momentum On the technical side, the AUD/USD price has broken below the 0.618 Fib retracement level. Therefore, the price might continue lower to the 1 Fib level. The downtrend is steep since the price has traded well below the 30-SMA with no deep pullbacks. -Are you looking for the best AI Trading Brokers? Check our detailed guide- At the same time, the RSI has consistently lowered and dipped into the oversold region, suggesting solid bearish momentum. Consequently, there is a high chance the downtrend will continue to the 0.6700 support. Here, it might pause for a pullback before making new lows. https://www.forexcrunch.com/blog/2024/10/08/aud-usd-outlook-aussie-nosedives-after-rba-minutes/

2024-10-07 10:35

The dollar rose to new highs on Friday after the NFP report. There is a 95% chance that the Fed will implement a small cut in November. The yen remained fragile after Ishiba’s comments last week. The USD/JPY outlook indicates a slight retreat from recent highs. However, bullish optimism remains intact after Friday’s better than expected employment figures. Meanwhile, the yen stayed weak after a recent shift in the outlook for Bank of Japan rate hikes. –Are you interested to learn more about day trading brokers? Check our detailed guide- The dollar rose to new highs on Friday after the NFP report showed an unexpected jump in US job growth. Economists had expected 140,000 new jobs in September. However, the actual figure showed that 254,000 people were employed in September. At the same time, the unemployment rate fell from 4.1% to 4.0%. Increased labor market demand relieves the Fed from an aggressive rate-cutting cycle. Consequently, the likelihood of a 50-bps rate cut in November fell. Meanwhile, there is a 95% chance that the Fed will implement a smaller cut. Most economic reports last week showed that the US economy remains resilient. Job openings and private employment increased more than expected. Therefore, there is a higher likelihood the Fed will achieve a soft landing. The sudden drop in rate-cut bets supported the dollar. However, if the Fed continues lowering borrowing costs, the greenback will eventually weaken. This week, market participants will focus on US inflation figures, which will continue shaping the Fed’s policy outlook. Meanwhile, the yen strengthened slightly on Monday. However, it remained fragile after Ishiba’s comments last week. Japan’s new prime minister dashed hopes for a near-term rate hike when he said the Country’s economy was not prepared for more hikes. USD/JPY key events today There will be no key reports from the US or Japan today, so the pair might consolidate. USD/JPY technical outlook: Channel breakout indicates steeper trend On the technical side, the USD/JPY price broke out of its bullish channel after a steep rally. At the same time, it broke above the 147.01 resistance level, pushing far above the 30-SMA. Meanwhile, the RSI entered the overbought region before pulling back. -Are you looking for the best AI Trading Brokers? Check our detailed guide- The channel breakout indicates a surge in bullish momentum. As a result, the previous bullish trend has become steeper and could continue higher. However, the price might revisit the recently broken channel resistance before targeting the 150.01 level. https://www.forexcrunch.com/blog/2024/10/07/usd-jpy-outlook-dollar-optimism-fueled-by-robust-nfp/

2024-10-07 10:23

Demand for the dollar increased last week due to geopolitical tensions. The US economy added 254,000 jobs, well above estimates of 140,000. Markets are pricing a 95% chance of a 25-bps November Fed rate cut. The GBP/USD forecast shows a solid downtrend after Friday’s upbeat US jobs report boosted the dollar. Meanwhile, the pound remained fragile after mixed rate cut signals from Bank of England policymakers. –Are you interested to learn more about day trading brokers? Check our detailed guide- Demand for the dollar increased last week due to geopolitical tensions and better-than-expected US economic data. Notably, the conflict in the Middle East escalated last week after Iran attacked Israel, leading to fears of retaliation. Meanwhile, in the US, data last week showed a resilient labor market and strong business activity in the services sector. The major event was the nonfarm payrolls, which beat estimates. The US economy added 254,000 jobs, well above estimates of 140,000. At the same time, the unemployment rate eased from 4.2% to 4.1%. Economists had expected it to hold steady at 4.2%. The US Central Bank has kept a close eye on the labor market and cut rates by 50-bps to keep it from deteriorating. Moreover, market participants were pricing another significant rate cut in November. However, this outlook changed on Friday, with markets now pricing a 95% chance of a 25-bps cut. The prospects of a gradual Fed easing cycle will support the dollar in the near term. Meanwhile, the pound collapsed last week after BoE governor Bailey said the central bank might cut rates aggressively if inflation eases. On the other hand, BoE chief economist Huw Pill advocated for gradual rate cuts. GBP/USD key events today Investors do not expect any key economic reports today. Therefore, the pair might extend Friday’s moves. GBP/USD technical forecast: Bears pause for breather near 1.3051 On the technical side, the GBP/USD price is approaching the 1.3051 support level after a sharp bearish move. The previous bullish trend paused near the 1.3400 resistance level. Here, bears took charge by breaking below the 30-SMA. The new bearish move was strong and impulsive, breaking below solid support levels. -Are you looking for the best AI Trading Brokers? Check our detailed guide- However, after the sharp decline, the RSI has made a bullish divergence with the price. This is a sign that bears are exhausted. Therefore, the price might rebound to retest the 30-SMA or the 1.3251 resistance level. Nevertheless, since the bearish bias remains strong, the price might eventually breach the 1.3051 support. https://www.forexcrunch.com/blog/2024/10/07/gbp-usd-forecast-us-jobs-report-sparks-dollar-rally/

2024-10-05 17:25

Powell’s hawkish speech dashed hopes for a 50-bps rate cut in November. Data from the US showed a tight labor market. Middle East tensions increased demand for the safe-haven dollar. The GBP/USD weekly forecast shows a sudden shift in sentiment to the downside as the dollar regains its shine. Ups and downs of GBP/USD The GBP/USD price made a solid bearish candle for the week as the dollar firmed against the pound. It was a strong week for the greenback as data, policymaker remarks, and Middle East tensions supported the currency. –Are you interested to learn more about day trading brokers? Check our detailed guide- The first catalyst for the dollar was Powell’s hawkish speech, which dashed hopes for a 50-bps rate cut in November. Meanwhile, data from the US showed a tight labor market, with vacancies and private employment rising more than expected. Furthermore, the nonfarm payrolls report revealed a bigger-than-expected employment jump. Elsewhere, Middle East tensions increased demand for the safe-haven dollar. Next week’s key events for GBP/USD Next week, market participants will focus on the FOMC minutes. The minutes might contain clues on what policymakers might do in the future. At the same time, the US CPI and PPI reports will show whether inflation is nearing the Fed’s 2% target. Analysts believe consumer inflation will ease further in September from 2.5% to 2.3%. A bigger-than-expected drop will pile pressure on the Fed to lower borrowing costs. As a result, bets for a 50-bps November rate cut would increase. On the other hand, an unexpected jump would favor a smaller rate cut. In the UK, market participants will focus on manufacturing production and the GDP report. A resilient economy will lower bets for BoE rate cuts, while the opposite is true. GBP/USD weekly technical forecast: Bears break out of rising wedge pattern On the technical side, the GBP/USD price has broken out of its bullish wedge to the downside. At the same time, it has broken below the 22-SMA, indicating a shift in sentiment. Previously, the price made a series of higher highs and lows in a wedge pattern. -Are you looking for the best AI Trading Brokers? Check our detailed guide- However, the uptrend paused when it reached the 1.3400 resistance. Here, the RSI made a bearish divergence, indicating fading bullish momentum. Soon after, bears got strong enough to break out of the bullish wedge. In the coming week, the price will face the 1.3051 support level. A break below would clear the path to the 1.2701 support, strengthening the bearish bias. https://www.forexcrunch.com/blog/2024/10/05/gbp-usd-weekly-forecast-sentiment-shift-amid-upbeat-nfp/