2024-08-28 08:54

Australia released data showing inflation slowed to a four-month low in July. Investors reduced the likelihood of a November RBA rate cut from 58% to 48.4%. Market participants are looking forward to US GDP and PCE data. The AUD/USD price analysis paints a bullish picture. The Aussie is edging higher after Australia’s inflation beat forecasts. Meanwhile, the dollar wallowed as investors awaited more clues on the Fed’s rate cut outlook. -Are you interested in learning about forex live calendar? Click here for details- On Wednesday, Australia released data showing inflation slowed to a four-month low in July. Notably, the Consumer Price Index eased from 3.8% in June to 3.5% in July. However, the figure came below estimates for a 3.4% increase. Moreover, most of the move came due to a decline in electricity prices after state subsidies. Consequently, investors reduced the likelihood of a November RBA rate cut from 58% to 48.4%. The Reserve Bank of Australia has remained hawkish due to high underlying inflation. Nevertheless, markets are fully pricing at least one rate cut by the end of the year. This outlook has held steady since the Fed will also likely start lowering borrowing costs in September. The greenback has remained fragile since Powell gave the green light for rate cuts during the Jackson Hole Symposium. Investors fully expect a rate cut in September. However, it could be a 50 bps or a 25 bps cut. If data before the meeting shows further economic weakness, the Fed will opt for the bigger rate cut. On the other hand, if data meets forecasts or is slightly higher, policymakers will vote for the smaller cut. Market participants are looking forward to US GDP and PCE data. AUD/USD key events today Investors will keep digesting Australia’s inflation report as no other key reports are scheduled for today. AUD/USD technical price analysis: Bulls lose steam near 0.68 On the technical side, the AUD/USD price has risen to retest the 0.6800 resistance level. Bulls are in the lead because the price sits above the 30-SMA. At the same time, the RSI supports bullish momentum above 50. However, it also shows a bearish divergence that indicates fading bullish momentum. -Are you interested in learning about forex signals? Click here for details- If bulls are getting weaker, they might fail to breach the 0.6800 resistance. Consequently, the price might return to the SMA or reverse to the downside. However, a surge in momentum could allow AUD/USD to make a new high above 0.6800. https://www.forexcrunch.com/blog/2024/08/28/aud-usd-price-analysis-aussie-rises-on-upbeat-inflation/

2024-08-27 10:08

The US dollar has recovered since the previous session as Israel and Hezbollah exchanged missiles. The Fed chair opened the door to a rate cut in September. BoJ Governor Kazuo Ueda maintained a hawkish tone on Friday. The USD/JPY price analysis is slightly bullish as investors balance a stronger dollar and yen amid safe-haven demand. Over the weekend, an escalation in Middle East tensions pushed investors to buy safe-haven assets like the dollar and the yen. However, trading was thin as UK markets closed for a public holiday. -Are you interested in learning about forex live calendar? Click here for details- Notably, the US dollar has recovered since the previous session as Israel and Hezbollah exchanged missiles. Tensions have remained high since the death of senior leaders in the war. Moreover, the chances of a ceasefire agreement between Israel and Gaza have fallen, raising fears of a more prolonged war that could broaden. The safe-haven inflows to the dollar reversed last week’s decline after Powell’s speech. Notably, the Fed chair opened the door to a rate cut in September, weakening the dollar. Fed policymakers are more confident price pressure will ease to the 2% target. At the same time, they are becoming weary of a weak labor market. Consequently, the likelihood of a rate cut in September has risen. Meanwhile, BoJ Governor Kazuo Ueda maintained a hawkish tone on Friday. The tone difference between the two top policymakers has created a divergence in policy outlooks. Investors expect lower rates in the US and higher rates in Japan. This divergence boosted the yen, raising the prospect of a smaller rate gap between Japan and the US. Investors are now awaiting the US core PCE price index for more clues on the timing and size of future Fed rate cuts. USD/JPY key events today US CB consumer confidence USD/JPY technical price analysis: Corrective move meets SMA resistance On the technical side, the USD/JPY price has risen to retest the 30-SMA resistance after a sharp decline. However, the bearish bias remains intact, and the price will likely respect the SMA as resistance. Notably, the bullish move was weak and shallow, indicating a correction. -Are you interested in learning about forex signals? Click here for details- Therefore, if bears remain in control, the price might bounce lower with an impulsive move to retest the 142.50 support level. Here, bears will meet a solid barrier. A break below will solidify the bearish bias. However, if the support holds firm, USD/JPY will consolidate or bounce higher. https://www.forexcrunch.com/blog/2024/08/27/usd-jpy-price-analysis-safe-haven-demand-lifts-dollar/

2024-08-27 09:13

The Canadian dollar traded near a 5-month high against the US dollar as oil prices rallied. Railroad operators in Canada restored services, reducing the risks to the economy. The US dollar was recovering as investors dumped risky assets due to the Middle East tensions. The USD/CAD outlook leans bearish with the Canadian dollar firm due to increased oil prices. However, the move was subdued as the dollar remained strong, with safe-haven inflows amid escalating Middle East tensions. -Are you interested in learning about forex live calendar? Click here for details- The Canadian dollar traded near a five-month high against the US dollar as oil prices rallied. Canada is a net exporter of oil, so increases in oil benefit the loonie. Notably, oil rallied on Monday as tensions between Israel and Lebanon intensified over the weekend. Israel exchanged Missiles with Hezbollah, increasing fears of a broader war in the Middle East. Such an outcome could impact oil supply and tighten the market. Moreover, production cuts in Libya will likely reduce oil supply, further boosting prices. At the same time, the Canadian dollar strengthened as Canadian railroad operators restored services, reducing the risks to the economy. The Canada Industrial Relations Board put an end to work pauses at two major railways that had caused a lot of disruptions The CAD has remained strong since Friday, when Powell signaled a rate cut in September. Powell’s dovish tone weighed on the US dollar, allowing the loonie to climb. However, the US dollar was recovering by Monday as investors dumped risky assets due to the Middle East tensions. The dollar is considered a haven in times of uncertainty, like fears of escalation in the Gaza war. Therefore, USD/CAD traders had to balance a strong Canadian dollar due to oil prices and a strong US dollar due to safe-haven demand. USD/CAD key events today US CB consumer confidence USD/CAD technical outlook: Bears rule under 1.3501 level On the technical side, the USD/CAD price has broken below the 1.3501 support level, strengthening the bearish bias. Moreover, the price sits far below the 30-SMA with the RSI in the oversold region. -Are you interested in learning about forex signals? Click here for details- USD/CAD has maintained a solid bearish trend, with the price keeping below the 30-SMA. Furthermore, there is a high chance this trend will continue as the price keeps making lower lows. However, the RSI shows oversold conditions. Therefore, bulls might emerge to retest the 30-SMA before the downtrend continues. The next major psychological level is 1.3400. https://www.forexcrunch.com/blog/2024/08/27/usd-cad-outlook-cad-strengthens-amid-rising-oil-prices/

2024-08-26 10:12

High interest rates might lead to more cracks in the US labor market. US inflation will likely reach the 2% target sustainably. The BoJ will keep tightening monetary policy. The USD/JPY outlook paints a pessimistic picture as the dollar tumbles after Powell’s strongly dovish tone. Meanwhile, the yen strengthened after BoJ governor Kazuo Ueda maintained that the central bank would hike rates if inflation rose as expected. -Are you interested in learning about forex live calendar? Click here for details- The policy outlooks in Japan and the US have diverged yet again. However, this time, it is in favor of the yen. FOMC meeting minutes last week revealed that policymakers were ready to start lowering interest rates. However, Powell’s tone on Friday was more dovish and his guidance clearer. According to him, inflation will likely reach the 2% target sustainably. Meanwhile, high interest rates might lead to more cracks in the labor market. Therefore, it is time for the Fed to adjust its policy. A pivot from high interest rates to rate cuts will likely mean a weaker dollar. At the same time, there will be less motivation to hold high-yielding US assets when the Fed starts cutting rates. Therefore, this will lead to an unwinding of the popular carry trade, boosting the yen. At the same time, the Bank of Japan is pivoting to a more hawkish outlook. Initially, there were fears that the market turmoil witnessed after the first rate hike would put a pause in policy adjustment. However, BoJ Governor Kazuo Ueda dismissed these fears. Ueda said as long as inflation is rising as expected, the central bank will keep tightening monetary policy. Consequently, the yen will strengthen and the interest rate gap between Japan and the US will shrink. USD/JPY key events today It will be a slow start to the week with no key events. Therefore, investors will keep digesting Friday’s policy remarks. USD/JPY technical outlook: Bears target 142.56 amid surge in momentum On the technical side, the USD/JPY price has finally fallen, detaching from the 30-SMA and the 0.382 Fib level. Therefore, the bearish bias has strengthened with the price far below the SMA and the RSI nearly oversold. -Are you interested in learning about forex signals? Click here for details- Bears are now heading for the 142.56 support level. A break below this level will solidify the bearish bias and lead to lower prices. On the other hand, if the level holds, the price might pause or reverse. https://www.forexcrunch.com/blog/2024/08/26/usd-jpy-outlook-powells-dovish-remarks-send-dollar-tumbling/

2024-08-26 09:07

Fed policymakers are ready to start lowering borrowing costs. Investors increased the likelihood of a super-sized 50 bps Fed rate cut. The UK central bank will not rush to cut rates. The GBP/USD forecast is bullish as the pound hovers near a two-and-a-half-year high against the dollar after the Jackson Hole Symposium. Notably, Powell said it was time for the Fed to start cutting rates. On the other hand, BoE’s Bailey said it was too early to declare victory against inflation. -Are you interested in learning about forex live calendar? Click here for details- The dollar plunged on Friday after Powell signaled a rate cut in September. The Fed has to balance between inflation and growth. Therefore, since inflation is on a consistent downtrend and growth is slowing down, policymakers are ready to start lowering borrowing costs. Notably, the Fed is keen on the labor market which has started cracking. Powell noted it was time for the central bank to adjust policy. Investors increased the likelihood of a super-sized 50 bps rate cut while that of a smaller cut fell to 65%. If data before the September meeting meets expectations, the Fed will likely cut by 25 bps. On the other hand, if data misses forecasts, the likelihood of a 50 bps cut will increase. Meanwhile, the Bank of England Governor Bailey had a different tone. He said the UK central bank would not rush to cut rates because it was too early to declare victory on inflation. Consequently, sterling rallied. At the same time, UK data has revealed a better-than-expected recovery in the economy. On Friday, business confidence was near a three-year high, further supporting the pound. GBP/USD key events today There won’t be any key economic releases today from the US or the UK. Consequently, the pair might consolidate. GBP/USD technical forecast: Bulls reach new highs despite stalled momentum On the technical side, the GBP/USD price has made a new high above the 1.3150 resistance level. It trades far above the 30-SMA and the RSI remains in the overbought region. However, the RSI has failed to make higher highs, showing bullish momentum has stalled despite higher prices. -Are you interested in learning about forex signals? Click here for details- If this continues, the price will likely reach the next hurdle at the 1.3301 level. At the same time, bears might gain momentum and trigger a pullback to the 1.3150 level or the 30-SMA before the bullish trend continues. https://www.forexcrunch.com/blog/2024/08/26/gbp-usd-forecast-tests-2-5-yr-top-after-powell-remarks/

2024-08-25 06:36

The FOMC meeting minutes on Wednesday revealed that policymakers were ready to cut rates in September. US business activity fell in August. Powell’s speech confirmed a September rate cut and sunk the dollar. The USD/CAD weekly forecast suggests a bearish trend, with the Canadian dollar gaining as the US dollar weakens after Powell’s speech. Ups and downs of USD/CAD The USD/CAD pair had a bearish week, with most of the move coming on Friday. The week started with the FOMC meeting minutes, revealing that policymakers were ready to cut rates in September. Afterward, data showed that US business activity fell in August, increasing bets for a September Fed rate cut. -Are you interested in learning about forex live calendar? Click here for details- Meanwhile, data from Canada revealed a 0.3% decline in sales, as expected. On the other hand, core retail sales jumped by an unexpected 0.3%. The week ended with Powell’s speech, which confirmed a September rate cut and sunk the dollar. Next week’s key events for USD/CAD Next week, the US will release figures on core durable goods and GDP. Meanwhile, Canada will only release its GDP report. The US GDP report will show the state of the economy amid high interest rates. The last report showed a bigger-than-expected expansion, indicating resilience. Another such report could ease pressure on the Fed to lower borrowing costs. On the other hand, a poor report could increase bets for a 50 bps rate cut. Similarly, Canada’s GDP report will shape the outlook for Bank of Canada rate cuts. Already, markets are betting on another rate cut in September. USD/CAD weekly technical forecast: Bears break out of consolidation On the technical side, the USD/CAD price has broken out of consolidation with a large bearish candle. For a long time, the price has traded between the 1.3601 support and the 1.3800 resistance. When the price was ready to trend, bulls made the first attempt at the 1.3800 resistance. However, it ended up being a false breakout. The price made a large wick, indicating a rejection, before returning to the range area. -Are you interested in learning about forex signals? Click here for details- Bears pushed the price below the 1.3601 support level with a strong red candle. The price trades far below the 22-SMA, with the RSI in the oversold region. Therefore, the bearish bias is strong. Next week, the price might revisit the recently broken level before continuing lower. https://www.forexcrunch.com/blog/2024/08/25/usd-cad-weekly-forecast-loonie-rises-as-us-dollar-slips/