2024-09-28 19:46

A set of PMI figures revealed a significant drop in business activity in the Eurozone. US unemployment claims dropped, indicating tight labor market conditions. US inflation increased by 0.1% compared to estimates of a 0.2% increase. The EUR/USD weekly forecast shows a neutral bias as the Eurozone economy weakens and Fed rate cut bets soar. Ups and downs of EUR/USD The EUR/USD fluctuated this week and ended nearly flat amid a mix of US and Eurozone data. When the week began, a set of PMI figures revealed a significant drop in business activity in the Eurozone. This raised pressure on the ECB to continue cutting interest rates, weighing on the euro. Meanwhile, US business activity held steady as the economy remained resilient despite high interest rates. Moreover, unemployment claims dropped, indicating tight labor market conditions. However, the dollar weakened on Friday after the core PCE report revealed cooler-than-expected inflation. Price pressures increased by 0.1% compared to estimates of a 0.2% increase, raising the likelihood of another massive rate cut in November. Next week’s key events for EUR/USD Next week, market participants will pay attention to key US reports, including manufacturing business activity and the nonfarm payrolls report. Moreover, Federal Reserve Chair Jerome Powell will speak on Monday. The focus for the week will be the monthly employment report. Notably, the Fed is paying close attention to the labor market for any weakness. At the last meeting, the central bank cut rates by 50-bps, saying it was meant to keep the unemployment rate low. Therefore, traders will watch job growth and unemployment in September for clues on the Fed’s next policy move. Economists expect the economy to add 144,000 jobs in September. EUR/USD weekly technical forecast: Bulls show weakness at the 1.1175 resistance On the technical side, the EUR/USD price has revisited the 1.1175 resistance level, where it has paused. At the same time, the RSI has made a bearish divergence, indicating fading bullish momentum. The price has remained in a bullish trend, making higher highs and lows. However, the RSI showed weakness in the most recent move. Therefore, there is a chance the price might reverse to challenge the 22-SMA and the bullish trendline. A break below these levels would clear the path to the 1.1000 support level. Here, bears will fight to break the previous low and start making lower highs and lows. Such a move would confirm the start of a bearish trend. https://www.forexcrunch.com/blog/2024/09/28/eur-usd-weekly-forecast-downbeat-eu-data-caps-gains/

2024-09-28 19:39

The yen rallied after Shigeru Ishiba won Japan’s election. Ishiba supports the recent Bank of Japan policy moves. The dollar fell due to softer-than-expected inflation numbers. The USD/JPY weekly forecast leans South due to an increased likelihood of more rate hikes in Japan and cuts in the US. Ups and downs of USD/JPY The USD/JPY pair had a bearish week as the yen rallied after Japan’s election. Meanwhile, the dollar fluctuated due to mixed economic data. The tight election for the Prime Minister seat in Japan ended with a win for former defense minister Shigeru Ishiba. The yen rallied after the result because Ishiba supports the recent Bank of Japan policy moves. Therefore, analysts believe there will be more rate hikes under his leadership. Meanwhile, the dollar initially had a solid start to the week when data showed steady business activity and a decline in jobless claims. However, it ended weak due to softer-than-expected inflation numbers. Next week’s key events for USD/JPY Next week, all eyes will be on US economic data, with none expected from Japan. The US will release figures on manufacturing business activity and employment. Additionally, a speech from Fed Chair Powell might contain clues about future rate cuts. After the recent FOMC policy meeting, policymakers have taken a more dovish tone, implying more rate cuts in the future. Therefore, there is a chance Powell will continue with this trend, putting downward pressure on the US dollar. Furthermore, the monthly jobs report will show the state of job growth and unemployment. Economists expect 144,000 more jobs in the economy, a slight increase from the previous reading. Meanwhile, the unemployment rate might hold steady at 4.2%. USD/JPY weekly technical forecast: Bears pierce the 22-SMA On the technical side, the USD/JPY price is on a bearish trend as the price trades below the 22-SMA, with the RSI in bearish territory. However, price action shows weakness in the downtrend. The price trades near the SMA and has punctured the line several times. This is a sign that bulls are getting stronger. Meanwhile, bears are weakening, as seen in the RSI, which has made a bullish divergence. Therefore, if the price fails to break below the 141.01 support in the coming week, it might break above the SMA. Such a break would indicate a shift in sentiment, allowing the price to climb to the 149.57 resistance level. https://www.forexcrunch.com/blog/2024/09/28/usd-jpy-weekly-forecast-yen-soars-as-boj-rate-hike-looms/

2024-09-27 12:56

Japan announced a new prime minister on Friday after a tight race. Japan’s new prime minister, Ishiba, supports the current monetary policy moves. US inflation rose by 0.1%, which is smaller than the forecast of 0.2%. The USD/JPY price analysis supports further downside as the yen rallies after Japan’s former defense minister, Shigeru Ishiba, won the seat for the next prime minister. Meanwhile, cooler-than-expected US inflation data weighed on the dollar. Japan announced a new prime minister on Friday after a tight race. The outcome boosted the yen since Ishiba supports the current monetary policy moves. Therefore, he might continue supporting the Bank of Japan as it raises borrowing costs. Although the last meeting was slightly cautious, economists expect at least one BoJ rate hike before the end of the year. Higher borrowing costs reduce the gap in rates between Japan and the US. Elsewhere, market focus remained trained on the US core PCE report. The Federal Reserve recently cut interest rates by a massive 50-bps. It was a clear indication of confidence that inflation was under control. Therefore, policymakers expect price pressure to continue declining to the target. Consequently, an unexpected figure could shift the outlook for future moves. Currently, there is a 50% chance of another massive reduction in November. Data on Friday revealed that inflation rose by 0.1%, smaller than the forecast of 0.2%. Therefore, the Fed has every reason to continue lowering borrowing costs. Moreover, a soft landing is more likely since the economy remains resilient. Notably, data on Thursday showed that US unemployment claims dropped to 218,000 compared to expectations of 225,000. Another report revealed that corporate profits increased at a faster-than-expected rate. USD/JPY key events today US Core PCE Price Index m/m USD/JPY technical price analysis: Bearish engulfing candle signals reversal On the technical side, the USD/JPY price has broken out of its bullish channel with a bearish engulfing candle. At the same time, the price has broken below the 30-SMA, indicating a shift in sentiment. Meanwhile, the RSI has dropped below 50, into bearish territory. -Are you looking for the best CFD broker? Check our detailed guide- However, the decline has reached the 143.01 support level and might pause here before continuing lower. A pause could allow the price to retest the recently broken channel support. If bears remain in control, the price will likely break below 143.01 support to retest the 141.01 level. https://www.forexcrunch.com/blog/2024/09/27/usd-jpy-price-analysis-yen-gains-following-ishibas-victory/

2024-09-27 09:15

Saudi Arabia plans to increase production after abandoning its $100 price target for oil. Market participants are focused on Canada’s GDP data. Initial US unemployment claims fell to 218,000, below forecasts of 225,000. The USD/CAD outlook shows a recovery from lows hit earlier in the week. The Canadian dollar fell as oil prices declined, while the dollar was steady after upbeat economic data in the previous session. Oil prices fell on Thursday due to worries of oversupply. The Financial Times reported that Saudi Arabia planned to increase production after abandoning its $100 price target for oil. Increased output will likely loosen the market and weigh on prices. At the same time, oil was weak as the conflict in Libya was partly resolved. The conflict had initially reduced production in the country, tightening the market. Market participants are now focused on Canada’s GDP data, which is due later in the day. Economists expect 0.1% GDP growth in July. The actual figure will guide the outlook on Bank of Canada rate cuts. Currently, traders are expecting 67-bps of rate cuts before the year ends. Furthermore, there is a chance the central bank will implement a massive cut after the Fed’s 50-bps reduction. Meanwhile, the US dollar was firm after data in the previous session revealed a steady economy. Initial unemployment claims fell to 218,000, below forecasts of 225,000, indicating steady demand for labor. Low claims could translate to a low unemployment rate, allowing the Fed to achieve a soft landing. A separate report showed that the economy grew by 3.0%, holding steady from the last reading. Steady growth indicates that the Fed will likely avoid a recession. USD/CAD key events today Canada GDP m/m US core PCE Price Index m/m USD/CAD technical outlook: Rebound meets solid resistance On the technical side, the USD/CAD price has rebounded to retest the 30-SMA resistance after making a new low near the 1.3425 level. Bears broke out of a strong, bullish channel with an impulsive move that broke below several major support levels. -Are you looking for the best CFD broker? Check our detailed guide- The price is now revisiting the 30-SMA and the 1.3500 key resistance level. However, bears might soon return since it still trades below the SMA, with the RSI below 50. If the price bounces lower, it might break below the 1.3425 support to make a new low and continue the downtrend. https://www.forexcrunch.com/blog/2024/09/27/usd-cad-outlook-oil-slump-gathers-buying-traction/

2024-09-26 10:10

Initially, the greenback rallied due to escalating Middle East tensions. Markets are pricing a higher 59% chance of a massive November Fed cut. All eyes are on the US core PCE price index, due on Friday. The AUD/USD outlook indicates increased bullish optimism as the dollar loses ground due to increased Fed rate cut expectations. Meanwhile, the Australian dollar rose despite data showing weaker labor demand. Initially, the greenback rallied as escalating Middle East tensions drove investors to buy the safe-haven currency. The conflict between Hezbollah and Israel in Lebanon has escalated, raising fears of a wider war. The two groups fired missiles at each other on Wednesday, dampening risk appetite. However, market participants still paid attention to Fed rate cut bets. According to futures markets, there is a higher 59% chance that the US central bank will cut interest rates by 50-bps at the November meeting. Such a dovish outlook is bearish for the dollar, allowing the AUD/USD pair to climb. All eyes are now on the US core PCE price index due on Friday. It is a key measure of inflation for the Fed and might impact future policy moves. Economists expect inflation to increase by 0.2%, as in the previous month. A smaller-than-expected number will boost rate-cut bets. On the other hand, a jump could reduce expectations for a massive cut and increase those for a smaller one. Meanwhile, in Australia, job openings in the three months to August fell as demand for labor cooled. Vacancies fell by 5.2% after the last reading showed a 3.5% decline. The report might add pressure on the RBA to consider near-term rate cuts. AUD/USD key events today US final GDP q/q US unemployment claims Fed Chair Powell Speaks AUD/USD technical outlook: RSI pauses while bulls make higher highs On the technical side, the AUD/USD price is climbing after failing to trade below the 30-SMA. The bullish bias remains strong with the price above the SMA and the RSI above 50. -Are you looking for the best CFD broker? Check our detailed guide- However, while the price is making higher highs, the RSI has stalled. This is a sign that bulls might be tired. Therefore, they might fail to push the price above the 0.6900 resistance. That would create a double top that could lead to a reversal. However, if there is a surge in momentum, the price will likely make a new high above0.6900. https://www.forexcrunch.com/blog/2024/09/26/aud-usd-outlook-dollar-reverses-on-dovish-fed-outlook/

2024-09-26 09:14

The dollar recovered as investors sought safety amid rising Middle East tensions. Market participants are pricing a 59% chance of another 50-bps rate cut in November. Sterling has gained about 5.4% against the dollar this year. The GBP/USD forecast shows a sudden shift in sentiment to bearish as the dollar recovers from a 14-month low. At the same time, the pound was weak as recent economic data pointed to a dimmer outlook. The dollar recovered against most currencies on Wednesday and Thursday as investors sought safety amid rising Middle East tensions. The conflict between Hezbollah and Israel in Lebanon has escalated, with the two groups exchanging missiles. The US and other partners announced they were working tirelessly to avoid a full-blown war between the two. Despite the dollar’s rebound, fundamentals point to more downside. The Fed recently cut interest rates by a massive 50-bps, starting a long-awaited easing cycle. The rate cut sent the greenback to fresh lows before it recovered. However, the US central bank flagged more rate cuts to come. As a result, market participants are pricing a 59% chance of another 50-bps rate cut in November. Nevertheless, incoming data will continue to shape this outlook. The next major report is the core PCE index, which will show the state of inflation. Market participants will also watch GDP data later today. On the other hand, the pound fell after data in the previous session revealed a significant drop in UK consumer sentiment. The figure fell from -8 to -21 in September. Moreover, it came after soft business activity data showed a slowdown in the economy. Still, sterling has gained about 5.4% against the dollar this year as the Bank of England delays rate cuts. GBP/USD key events today US final GDP q/q US unemployment claims Fed Chair Powell Speaks GBP/USD technical forecast: Solid bearish momentum On the technical side, the GBP/USD price is trading in a tight, bullish channel with clear support and resistance lines. The price recently fell to the channel support after failing to sustain a move above the 1.3400 key level. -Are you looking for the best CFD broker? Check our detailed guide- The decline has paused at the support line, which coincides with the 30-SMA. Therefore, it might bounce higher to make a new high above 1.3400. However, if bears are strong enough to break below the support zone, the price might revisit the 1.3200 support level. https://www.forexcrunch.com/blog/2024/09/26/gbp-usd-forecast-dollar-rebounds-from-14-month-low/