2024-08-31 08:42

The US economy remains resilient despite high interest rates. Data increased the likelihood of a gradual Fed rate-cutting cycle. Inflation in the Eurozone eased from 2.6% to 2.2% moving closer to the central bank’s target. The EUR/USD weekly forecast shows more downside potential, as easing Eurozone inflation points to a more dovish ECB. Ups and downs of EUR/USD The EUR/USD pair had a bearish week, with the dollar strengthening while the euro eased. Data during the week showed that the US economy remains resilient despite high interest rates. Consumer confidence soared, and the economy grew by 3.0%. Meanwhile, inflation held steady at 0.2%. Consequently, this increased the likelihood of a gradual Fed rate-cutting cycle, boosting the dollar. –Are you interested to learn more about day trading brokers? Check our detailed guide- Meanwhile, inflation in the Eurozone eased from 2.6% to 2.2%, moving closer to the central bank’s target. As a result, investors are more confident that the European Central Bank will cut rates again in September. Next week’s key events for EUR/USD Next week, investors will focus on manufacturing business activity data and the monthly employment report from the US. Notably, the manufacturing sector has performed poorly compared to the services sector, remaining in contraction. Economists expect a slight improvement from 46.8 to 47.8. Meanwhile, the nonfarm payrolls report will show the state of the labor market, a key sector in the US economy. The last report showed big cracks as the unemployment rate jumped and job growth slowed. It raised fears of a looming recession and increased Fed rate cut expectations. Another such report could increase expectations for an aggressive Fed rate-cutting cycle, boosting the euro against the dollar. EUR/USD weekly technical forecast: Bulls stall for a brief pullback On the technical side, the EUR/USD price is falling after reaching a new high near the 1.1200 critical level. Nevertheless, it is still in a bullish trend, sitting above the 22-SMA with the RSI above 50. Therefore, although bears have taken over, it might only be temporary. –Are you interested to learn more about automated trading? Check our detailed guide- The price is approaching the 22-SMA support, where it might pause and bounce higher. However, the last time bears retested the SMA, the price punctured the line before reversing. Consequently, this might happen again. If it does, the price might find support at other levels, including the 0.5 Fib, the 1.1001 support, and the bullish trendline. However, if the price breaks below all these levels, it will indicate a new bearish trend. https://www.forexcrunch.com/blog/2024/08/31/eur-usd-weekly-forecast-ecb-dovish-amid-easing-inflation/

2024-08-30 10:44

The pound remains one of the best-performing major currencies against the US dollar. The Fed is more willing to lower borrowing costs than the Bank of England. US GDP figures showed that the economy grew by 3.0%. The GBP/USD price analysis leans slightly bearish as the pound pulls back from recent highs amid dollar strength. The US dollar firmed on Thursday after data revealed a robust economy despite high interest rates. However, on Friday, investors remained cautious ahead of US inflation data. -Are you interested in learning about forex live calendar? Click here for details- The pound remains one of the best-performing major currencies against the US dollar. It has gained 4% so far this year. The recent rally came as markets bet on more rate cuts in the US than in the UK this year. At the same time, the UK economy has recovered from its dip last year, brightening the outlook for the future. Recent policymakers’ remarks at the Jackson Hole Symposium revealed that the Fed was more willing to lower borrowing costs than the Bank of England. At the same time, market expectations point to a total of 100 bps cuts by the Fed and 65 bps by the BoE. However, this outlook could keep changing with incoming data. Experts believe the pound is vulnerable because any changes could sharply reverse the trend. On Thursday, GBP/USD fell as the dollar gained after better-than-expected US economic data. GDP figures showed that the economy grew by 3.0%, above estimates of 2.8%. These figures erased fears of a recession and rekindled hopes of a soft landing by the Fed. Meanwhile, jobless claims came in lower than expected, revealing a stable labor market. Market participants are now watching the core PCE report for more clues on the outlook for rate cuts. GBP/USD key events today US Core PCE Price Index m/m GBP/USD technical price analysis: Battling below 30-SMA On the technical side, the GBP/USD price has fallen below the 30-SMA, indicating a possible reversal. However, the RSI remains slightly above 50, showing bulls are still fighting for control. The price changed direction after a bearish RSI divergence signaled weakness in the bullish trend. -Are you interested in learning about forex signals? Click here for details- However, bears found strong support at the 1.3150 level. This allowed the price to climb and retest the recently broken SMA. If bears remain in charge, the price will make a new low below 1.3150. On the other hand, if bulls return stronger, GBP/USD will break above the SMA. https://www.forexcrunch.com/blog/2024/08/30/gbp-usd-price-analysis-pound-off-peaks-ahead-of-core-pce/

2024-08-30 09:13

The US core PCE price index will show whether price pressures are dropping fast enough to warrant a 50 bps rate cut. The US GDP expanded by a bigger-than-expected 3.0% in the second quarter. Australia’s sales were flat in July, a drop from previous robust readings. The AUD/USD outlook is bullish as the dollar eases ahead of US inflation data, which will shape the outlook for Fed rate cuts. Meanwhile, RBA rate cut expectations remained unchanged after data showed weaker retail sales in July. -Are you interested in learning about forex live calendar? Click here for details- AUD/USD rose on Friday as investors positioned themselves before the core PCE price index report. The inflation measure will show whether price pressures are dropping fast enough to warrant a 50 bps rate cut. If not, the Fed will likely resort to a smaller 25 bps cut. Moreover, markets will start pricing a gradual rate-cutting cycle. On Thursday, data from the US revealed a robust economy. The GDP expanded by a bigger-than-expected 3.0% in the second quarter, increasing chances that the Fed will achieve a soft landing. At the same time, initial jobless claims came in lower than expected, showing a still-tight labor market. Consequently, the dollar rose. Meanwhile, data on Friday showed that Australia’s sales were flat in July, a drop from previous robust readings. Meanwhile, economists had expected a 0.3% increase. In June, retail sales jumped by 0.5%. The disappointing figures increased the likelihood that the next move for the Reserve Bank of Australia will be a rate cut. Nevertheless, after July’s upbeat inflation report, RBA rate cut expectations remained subdued. Investors are pricing an 80% chance of a rate cut in December. Meanwhile, policymakers are forecasting the first cut sometime next year. AUD/USD key events today US core PCE price index m/m AUD/USD technical outlook: Price pauses as bullish momentum fades On the technical side, the AUD/USD price is trading in a tight range near the 0.6800 critical psychological level. However, the bias is bullish since the price sits above the 30-SMA. At the same time, the RSI trades in bullish territory above 50. -Are you interested in learning about forex signals? Click here for details- However, the RSI has shown weakness in the bullish trend. It has made a bearish divergence, a sign that the pair might be ready to reverse to the downside. If bears emerge, they might push the price below the 30-SMA to reverse the trend. Otherwise, bulls will regain momentum and break above 0.6800 to make a higher high. https://www.forexcrunch.com/blog/2024/08/30/aud-usd-outlook-dollar-softens-ahead-of-key-us-inflation-data/

2024-08-29 10:20

Gold price consolidates after last week’s rate cut rally. If the US PCE figures miss forecasts, investors will expect a more dovish Fed. Middle East tension supported gold on Thursday. The gold outlook is bullish as investors await more US inflation data for clues on the size and pace of Fed rate cuts. Despite brief pullbacks, gold’s bullish trend has remained due to rate-cut optimism and safe-haven demand. -Are you interested in learning about forex live calendar? Click here for details- Spot gold fell on Wednesday as the dollar strengthened amid speculation before Friday’s inflation figures. Prices have fluctuated this week, consolidating after last week’s rate cut rally. On Friday, Powell said it was time for the Fed to pivot and lower interest rates. As a result, investors increased bets for a September rate cut, pushing Treasury yields lower. Meanwhile, gold, a non-yielding asset, rallied. However, this week, there has been a mix of rate cut optimism, caution ahead of data, and geopolitical tensions. Caution has pushed most investors to take profits ahead of Friday’s PCE price index report. At the same time, prices have bounced higher at the likelihood of further evidence that inflation is declining. If the PCE figures miss forecasts, investors will expect a more dovish Fed. Consequently, the XAU/USD price will rally. On the other hand, if inflation meets forecasts or comes in slightly higher, gold might ease briefly. Market participants are fully expecting a rate cut and it will take a lot to change this outlook. Therefore, there is likely more upside potential for gold. Meanwhile, Middle East tension supported gold on Thursday as the war in Gaza intensified. Israel engaged in missile wars with Hezbollah that have raised fears of escalation. Consequently, investors have bought more safe-haven assets like gold. Gold key events today Prelim US GDP q/q US unemployment claims Gold technical outlook: Bulls retest 2520.09 resistance On the technical side, the XAU/USD price is retesting the 2520.09 solid resistance level. The bias is bullish since the price trades above the 30-SMA with the RSI over 50. At the same time, the price has made a series of higher highs and lows, indicating a developed bullish trend. -Are you interested in learning about forex signals? Click here for details- The trend paused and started consolidating with support at 2480.38 and resistance at 2520.09. However, bulls remained stronger since the price respected its bullish trendline. Consequently, it might soon breach the range resistance to make a new high. https://www.forexcrunch.com/blog/2024/08/29/gold-outlook-investors-await-data-for-clarity-on-fed-cuts/

2024-08-29 09:02

Tensions in the Middle East had investors rushing for the greenback. Incoming data might alter expectations for the size of Fed rate cuts. ECB policymakers are ready to start lowering borrowing costs in September. The EUR/USD forecast points south as the dollar rallies ahead of GDP and inflation data. As Middle East tensions escalate, the dollar has recovered from recent lows due to safe-haven demand. Meanwhile, ECB policymakers are getting comfortable with a rate cut in September. -Are you interested in learning about forex live calendar? Click here for details- The dollar was initially weak after Powell’s speech on Friday, which solidified bets for a September Fed rate cut. However, the trend reversed this week as tensions in the Middle East had investors rushing for the greenback. The Gaza war has grown, and prospects of a ceasefire agreement have dimmed. The dollar tends to rise in times of global uncertainty. However, downward pressure remains as investors fully price a Fed pivot in September. Incoming data might alter expectations for the size of rate cuts. Currently, there is a higher chance of a 25-bps rate cut. However, further economic weakness and easing price pressure could lead to a more significant rate cut. Market participants expect GDP data today to show the economy’s state. Recent GDP figures have shown resilience, so an unexpectedly poor figure could boost rate-cut expectations. At the same time, the US will release its PCE price index on Friday, showing the state of inflation. Meanwhile, ECB policymakers are ready to start lowering borrowing costs in September. However, some, like Klaas Knot, remain cautious, saying more data is needed to confirm the rate cut. EUR/USD key events today US prelim GDP q/q US unemployment claims EUR/USD technical forecast: Bears eye the 1.1050 support after reversal On the technical side, the EUR/USD price is collapsing after breaking below and retesting the 30-SMA. This is a sign that bears have taken charge and reversed the trend. The previous bullish trend peaked at the 1.1201 resistance level, where bullish momentum weakened. -Are you interested in learning about forex signals? Click here for details- Notably, the RSI made a bearish divergence, showing fading momentum as the price made higher highs. Eventually, bears overpowered bulls, pushing the price below the 30-SMA. At the same time, the RSI dipped below 50 to trade in bearish territory. The price might soon reach the 1.1050 support level due to the strong bearish bias. https://www.forexcrunch.com/blog/2024/08/29/eur-usd-forecast-correcting-gains-ahead-of-us-gdp/

2024-08-28 11:13

Market focus is squarely on the rate cut outlook in the US and the UK. The UK economy is doing better than expected, boosting the pound. The US will release GDP and PCE data this week. The GBP/USD forecast shows a slight pullback in a bullish trend, with the pound near a two-year high hit in the previous session. The rally to this peak came as markets bet on more rate cuts by the Fed than the Bank of England. Meanwhile, markets awaited US GDP and inflation data. -Are you interested in learning about forex live calendar? Click here for details- Sterling eased slightly on Wednesday after reaching a new peak. Market focus is squarely on the rate cut outlook in the US and the UK. According to bets, the Fed might implement 100 bps in cuts this year. Meanwhile, the Bank of England might cut by 40 bps after a 25 bps cut in August. At the same time, the UK economy is doing better than expected, boosting the pound. On Friday, the BoE Governor and Fed Chair spoke about rate cuts. Powell indicated it was time for the Fed to start lowering borrowing costs because the labor market had shown weakness. As a result, bets for a September cut rose, sinking the dollar. On the other hand, Andrew Bailey cautioned against rushing to cut rates. He noted that it was too early to know if the fight to tame inflation was done. Consequently, rate cut expectations fell, and the pound rose. However, incoming data might shift the outlook for UK and US policy. The US will release GDP and PCE data this week, which might alter expectations. GBP/USD key events today Trading will likely remain this as neither Britain nor the US will release major reports. GBP/USD technical forecast: Bears take over as bulls show exhaustion On the technical side, the GBP/USD price is retreating after making a higher high. Nevertheless, the bias remains bullish, with the price above the 30-SMA and the RSI over 50. Bulls have maintained a steep price trend above the SMA. It recently broke above the 1.3150 resistance level and was heading for the 1.3301 critical level. However, the journey to the 1.3150 level was difficult. -Are you interested in learning about forex signals? Click here for details- The RSI showed a slight bearish divergence, indicating exhaustion. As a result, bears have taken over. However, the bullish trend will continue if the price stays above the SMA. https://www.forexcrunch.com/blog/2024/08/28/gbp-usd-forecast-pound-maintains-momentum-near-2-year-high/