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13 04, 2024

GBP/USD Weekly Forecast: Fed’s Delayed Cut Weighs on Pound

By |2024-04-13T12:53:06+02:00April 13, 2024|Forex News, News|0 Comments

  • The dollar rallied amid a drop in rate cut expectations.
  • Markets now predict only two Fed rate cuts this year.
  • Next week, investors will focus on retail sales data from the US and the UK.

The GBP/USD weekly forecast is pointing southward, with the Fed expected to hang tight before making any moves to slash interest rates.

Ups and downs of GBP/USD

The GBP/USD pair had a bearish week as the dollar rallied amid a drop in rate cut expectations. The major event this week was the US inflation report. When it came out, investors were surprised by another month of higher-than-expected price growth. Moreover, it came after a blockbuster jobs report showing a robust labor market. 

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Consequently, there was a sharp adjustment in Fed rate cut expectations. Markets now predict only two rate cuts this year, starting in September. Inflation in the US has proven to be more stubborn than other major economies. This put the dollar in a better position than the pound.

Next week’s key events for GBP/USD

GBP/USD Weekly Forecast: Fed’s Delayed Cut Weighs on Pound

 

Next week, investors will focus on retail sales data from the US and the UK. Furthermore, the UK will release data on employment and inflation. All focus will be on the UK CPI report, which will show the state of price growth in the economy. The recent US inflation report has put the GBP/USD pair in a weak position as the timing for the first Fed cut has moved to September.

Therefore, traders will wait to see whether the Bank of England will be in a position to cut interest rates before the Fed. A decline in UK inflation would further weaken the GBP/USD pair.

GBP/USD weekly technical forecast: Price signals impending rectangle breakout

GBP/USD weekly technical forecastGBP/USD weekly technical forecast
GBP/USD daily chart

 

On the technical side, the GBP/USD price is on the verge of breaking out of its rectangle pattern. Moreover, the bias is bearish as the price falls well below the 22-SMA, and the RSI is approaching the oversold region. 

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The previous bullish trend paused when the price reached the 1.2801 key resistance level. It then consolidated with the 1.2801 level as resistance and the 1.2500 level as support. There has been a surge in momentum that has pushed the price to the 0.5 Fib retracement level.

If the price closes below the rectangle support, it will likely fall to the 0.618 Fib retracement level. Moreover, the path will be clear for the price to reach the 1.2201 support level.

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13 04, 2024

USD/JPY Forecast – US Dollar Continues to Probe Higher Against the Japanese Yen

By |2024-04-13T10:52:21+02:00April 13, 2024|Forex News, News|0 Comments

USD/JPY Forecast Video for 19.06.23

US Dollar vs Japanese Yen Technical Analysis

The US dollar has probed higher against the Japanese yen during the trading session on Friday, as it looks like the greenback is going to continue to be very resilient against the Japanese yen. This makes a certain amount of sense considering that the Bank of Japan has failed to take decisive action yet again, as they seemingly are completely open to the idea of staying loose for the foreseeable future. If that’s going to be the case, then the Japanese yen is going to lose to almost all currencies, the US dollar included.

It’s worth noting that we just broke out of a massive bullish flag, and it does measure for a move all the way to the ¥148 level. After that, we could go to ¥150, and I certainly think at this point in time that most traders at least have that idea on the back of their head. The market certainly looks as if it is a “buy on the dips” situation, with the bullish flag offering a bit of support, and it certainly looks as if we are getting ready to take off to the upside given enough time. Not only does the flag offer support, but we also have the ¥138 level underneath there offering a potential floor in the market as well.

Keep in mind that level was the previous resistance barrier of the ascending triangle, and therefore a certain amount of “market memory” comes into the picture. Speaking of the ascending triangle, it also measures for a move to roughly ¥148, so I think it all lined up quite nicely and it’s probably only a matter of time before the search for yield continues to carry this pair higher as it is essentially the “carry trade” of old. It’s not until we break down below the ¥138 level on a daily close that I would be concerned about the overall trend. At this point, it does not look like we have any real threat of that, so I like the idea of going long in this pair over the longer term.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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13 04, 2024

Euro’s Outlook Darkens on Dovish ECB, Geopolitical Risks – EUR/USD, EUR/GBP

By |2024-04-13T08:50:32+02:00April 13, 2024|Forex News, News|0 Comments

Most Read: Euro’s Outlook Turns Bearish After ECB Decision, Setups on EUR/USD, EUR/GBP

The euro suffered a major setback this week, primarily against the U.S. dollar, though it also lost some ground against the British pound. The European Central Bank’s dovish stance during its April meeting laid the groundwork for the common currency’s downturn, which was further exacerbated by heightened geopolitical tensions in the Middle East leading into the weekend.

ECB Turns Dovish

At its latest policy meeting, the ECB opted to leave interest rates unchanged but left no doubt about its intention to transition towards a looser position imminently amid increased confidence in the inflation outlook. This guidance prompted traders to ramp up wagers that the institution led by Christine Lagarde would launch its easing campaign at its next monetary policy meeting in June.

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Monetary Policy Divergence

The prospect of the ECB moving ahead of the Fed in terms of easing is poised to be detrimental to EUR/USD in the short run. Just a few weeks ago, there were indications that the FOMC could also act in June, but a series of hotter-than-expected U.S. CPI readings and labor market data have derailed this scenario, triggering a hawkish repricing of rate expectations that has been a boon for the U.S. dollar.

Monetary policy divergence could present challenges for the euro against the British pound as well. Although the Bank of England is also seen removing policy restraint in 2024, market pricing suggests that the first cut may not materialize until August. Moreover, traders are only discounting 50 basis points easing from the BoE, whereas they anticipate about 75 basis points in cumulative cuts from the ECB this year.

Geopolitical Tensions on the Rise

Geopolitical tensions in the Middle East are set to keep the euro on tenterhooks in the short term, though any negative impact should be more visible against the U.S. dollar, traditionally considered a safe-haven asset. Concerns about potential retaliatory actions from Iran following an attack on its Syrian embassy by Israel could escalate tensions in the region, unsettling markets and weighing on high-beta currencies.

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EUR/USD FORECAST – TECHNICAL ANALYSIS

EUR/USD has dropped sharply in recent days, breaching multiple technical floors in the process. The latest leg lower has brought the pair to its lowest point since early November of the previous year, nearing a crucial support at 1.0635. To prevent a deeper downturn, euro bulls will need to staunchly protect this zone; failure to do so may prompt a retreat towards the 2023 lows.

On the other hand, should selling pressure ease and prices begin to rebound from their current position, initial resistance emerges at 1.0695 and 1.0725 subsequently. Beyond these two thresholds, attention shifts to the 50-day and 200-day simple moving averages in the vicinity of 1.0825. On further strength, the focus will be on 1.0865, the 50% Fib retracement of the 2023 slump.

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EUR/GBP FORECAST – TECHNICAL ANALYSIS

EUR/GBP dropped moderately this week, but downside momentum faded heading into the weekend as the pair found support at 0.8525 and began to move higher off its weekly lows. If the nascent recovery continues over the next few days, resistance appears at 0.8550 near the 50-day simple moving average. Looking higher, the spotlight will be on trendline resistance at 0.8575, followed by 0.8600.

Alternatively, if bears mount a comeback and EUR/GBP resumes its downward journey, support looms at 0.8525, which represents the late March swing lows. Bulls must strive to maintain prices above this technical area to prevent a breakdown; otherwise, sellers could seize the opportunity to launch a bearish assault on the 2023 lows.

EUR/GBP PRICE ACTION CHART

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13 04, 2024

EUR/USD, GBP/USD, USD/CAD, USD/JPY Forecasts – U.S. Dollar Tests Multi-Month Highs Ahead Of The Weekend

By |2024-04-13T06:48:07+02:00April 13, 2024|Forex News, News|0 Comments

FXEmpire.com –

U.S. Dollar

DXY 120424 4h Chart
U.S. Dollar Index tested new highs as traders reacted to the Michigan Consumer Sentiment report, which indicated that Consumer Sentiment declined from 79.4 in March to 77.9 in April. The report has also shown that consumer inflation expectations have increased, which was bullish for the U.S. dollar.

In case U.S. Dollar Index manages to settle above the resistance at 105.75 – 106.00, it will move towards the next resistance level at 107.10 – 107.35.

EUR/USD

EUR/USD 120424 4h Chart
EUR/USD remains under strong pressure as traders bet that ECB would be more dovish than Fed this year. The pullback in Treasury yields did not put any pressure on the American currency.

The nearest support level for EUR/USD is located in the 1.0600 – 1.0620 range. In case EUR/USD settles below the support at 1.0600, it will head towards the next support level, which is located in the 1.0500 – 1.0520 range.

GBP/USD

GBP/USD 120424 4h Chart
GBP/USD tests new lows as the pullback continues. Traders stay focused on general strength of the U.S. dollar.

A successful test of the support at 1.2425 – 1.2450 will open the way to the test of the next support level at 1.2320 – 1.2335.

USD/CAD

USD/CAD 120424 4h Chart
USD/CAD is moving higher as commodity-related currencies are losing ground despite the strong rally in precious metals markets.

From the technical point of view, USD/CAD needs to settle above the resistance at 1.3780 – 1.3800 to gain additional upside momentum.

USD/JPY

USD/JPY 120424 4h Chart
USD/JPY settled above the 153.00 level as traders waited for additional catalysts. There are no signs of interventions from the BoJ, which indicates that Japan’s central bank believes that USD/JPY may move even higher.

In case USD/JPY settles above the recent highs at 153.38, it will gain additional upside momentum and move towards the 155.00 level.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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13 04, 2024

FTSE 100 Live: Index Falters Near Record, Pound (GBP/USD) Drops

By |2024-04-13T04:47:36+02:00April 13, 2024|Forex News, News|0 Comments

marketsClosed Apr 12, 2024

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13 04, 2024

GBP/USD Forecast Today – 12/04: GBP Gives Up Gains (Chart)

By |2024-04-13T00:45:04+02:00April 13, 2024|Forex News, News|0 Comments

  • The British pound initially rally during the trading session on Thursday to reach the 200-Day EMA, but then turned around to show signs of negativity.
  • By doing so, it looks like we are trying to form an inverted hammer, and it’s probably worth noting that this inverted hammer sits on top of the 1.25 level, an area that is obviously a large, round, psychologically significant figure, and an area that has seen a lot of support previously.

What makes me pay close attention to this area is because I am seeing a lot of currencies give up initial gains against the US dollar, and that suggests to me that we will continue to see the US dollar try to strengthen, because it’s not just against the British pound that I’m see in this action, it’s also the Australian dollar, the euro, and several others. If the GBP/USD pair does break down below the 1.25 level, then it’s likely that this pair drops rather significantly, perhaps as low as the 1.22 level underneath.

Support

This is an area that I would expect a certain amount of support, so if we turn around and take out the 200-Day EMA on a bounce, then I think you have a real shot at the British pound going higher to reach the 1.27 level, and then eventually the 1.28 level which is a major resistance barrier. In general, I think it’s going to take some type of ship to make that happen, as we have so clearly rebuked the buying pressure that came into the picture early on Thursday. That being said, I think the Friday session is going to be crucial for the British pound as it could dictate where we go for the next 300 pips.

I would expect a certain amount of volatility, but I would wait until we see some type of daily close to make a bit of a decision, because there is high probability of a significant amount of volatility in this area. In general, this is a market that I expect a lot of noise in, but I am very interested in the British pound against the US dollar at the moment, as it could be a nice set up.

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12 04, 2024

EUR/USD Has Scope To Test 1.10

By |2024-04-12T22:43:25+02:00April 12, 2024|Forex News, News|0 Comments

Given some evidence of US economic vulnerability, Danske Bank sees scope for a weaker dollar and the Euro to Dollar (EUR/USD) exchange rate to test 1.10 in the near term.

Although the bank has shifted its view and now thinks that the first Fed rate cut will take place in June rather than May, market expectations have already shifted, limiting any dollar support.

Danske still expects three Fed rate cuts in 2024 and a further four reductions in 2025.

Danske Bank notes that there has been a substantial build in long dollar positions over the past few weeks. This shift in positioning will leave the currency more vulnerable if there is disappointing economic news.

Although official US data has remained generally robust, survey evidence has been less impressive. Danske noted weak hiring intentions by small businesses and an easing of pricing pressures within the services sector.

Overall, the bank considers that there is liable to be economic deterioration over the second half of the year, limiting dollar support.

Danske does note that a further increase in oil prices would boost the dollar and undermine EUR/USD.

It also still expects medium-term dollar gains on superior US fundamentals with a 12-month EUR/USD forecast of 1.05.

Key Quotes:

foreign exchange rates

“It is a little surprising that the USD has not had more support from the ongoing resilience of the US labour market.”
“Markets will probably take more note of this week’s March CPI print.”

“Currently, markets are pricing in 64bp of Fed easing this year and a terminal rate for the easing cycle in three to four years’ at around 3.60%.”

“The USD will move lower if that terminal rate is priced lower, but that will require weaker US data.”

“The short-end rates market is dead even at 50/50 odds for a June cut from the Fed.”

“Wednesday’s US inflation data will determine whether the market opts to retain the balanced optionality for June or remove June from consideration.”
“We still find it likely that EUR/USD could test the 1.10 level in the near future.”

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12 04, 2024

Buy on the Dips Market (Video)

By |2024-04-12T18:41:23+02:00April 12, 2024|Forex News, News|0 Comments

  • The dollar-yen pair initially pulled back just a bit during the trading session on Thursday only to bounce again.
  • Ultimately, this is a market that I think continues to see a lot of support underneath, especially near the 152 yen level.
  • Now that we’ve broken through this 152 yen level, it is a sign that we are going higher. After all, the Bank of Japan has absolutely no recourse to this.

A little bit of intervention would probably only anticipate more buying down the road. There isn’t a whole lot they can do. The interest rate differential continues to pay people to own this pair. We are going to the 155 yen level, given enough time. The 152 yen level now should have a lot of market memory attached to it, so if we get anywhere near there, I’m a big buyer. I’m a buyer already. I’m already a long in this pair for the last several months and just added more over the last 24 hours.

The Crucial 155 Yen Level

At 155 yen, I anticipate a little bit of psychology to come into the market and offer short-term resistance. Nonetheless, there’s nothing there that tells me that we can’t go higher. Really, at this point in time, with inflation numbers in the United States remaining pretty stubborn, the reality is that the Federal Reserve may not be able to cut at all this year. And if that’s the case, the Bank of Japan has a real problem on its hands due to the fact that it has an enormous amount of debt to finance. With that being said, they cannot handle higher rates. I do believe we continue to see the US dollar climb against the Japanese yen and several other currencies will behave the same as well.

This is a currency, the USD/JPY that simply cannot get off of its back, and I think this continues to be the case going forward. The market remains a “buy the dips” market, as it has been for quite some time.

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