USDCAD TODAYUSDCAD TODAY looks like more sell move
I waiting for entry after structure and reversal on M5/M15
Ftmo
EURNZD TODAYEURNZD TODAY looks for me more sell
I waiting for move back a little bit and looking for entry on M5/M15
AUDCAD TODAYAUDCAD TODAY for me is bullish Today.
I looking entry after a little bit down and reverse on M15 or M5
GOLD / XAUUSD TODAYOn Daily chart we will looking good reverse for long setup with target new higher high.
Gold is still bulish.
Of course in intraday we looking sell setup on M5 and M15 minutes at the moment
Good luck and remember about small risk in your trading
Market News Report - 03 November 2024While it was a mild past week, the USD was pretty strong again. Other bullish currencies include the euro and the British pound. Speaking of the latter, the Bank of England will announce its interest rate soon. Then, we had the most anticipated new Federal Funds on Thursday and the US elections.
All of this and more will be covered in our market report of the major forex pairs.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: weak bearish.
Despite a recent 50 basis points (bps) rate cut, the Fed may not need to cut rates as aggressively going forward. This is partly due to recent positive job numbers and earnings data that exceeded expectations.
While the NFP data last Friday was negative, the drop was due to the impact of US hurricanes and labour disputes with Boeing.
The US elections on Tuesday may provide a notable boost for USD if Trump wins. However, we also have the new Fed interest rate two days later, where a cut is anticipated. So, the bias remains weak bearish in the near term.
The Dixie continues to head north after weeks of ranging around the key support area at 100.157. We have spoken several times about a potential technically-driven retracement (despite the bearish fundamentals).
Meanwhile, the key resistance is far away at 107.348, which will remain untouched for some time.
Long-term outlook: weak bearish.
While there is no extreme dovish pricing anymore (thanks to some economic improvements), the Fed is still expected to cut the interest. Labour data will be another key driver in the long term for USD.
However, the upcoming US elections could be a huge redeeming factor for the greenback if Trump wins (who is highly favoured against Harris).
Euro (EUR)
Short-term outlook: bearish.
The short-term interest rate (STIR) markets were predictably accurate as the European Central Bank (ECB) cut the interest rate last month. However, they remain data-dependent on what to do in the future (although they are quite concerned about slow growth).
Short-term interest rate markets have indicated an 84% chance of a rate cut in December. Also, we have seen weaker economic data across various European nations (although the Eurozone Gross Domestic/GDP growth was above expectations).
The euro has finally made its bearish intention known on the charts, breaking the key support at 1.07774 (but only just). We need to see how this level reacts over the coming weeks- so it's not out of the question. Meanwhile, the key resistance remains far higher at 1.12757.
Long-term outlook: bearish.
The latest rate cut and the avoidance of indicating a clear future move for the December meeting are among the key down-trending factors.
However, any improvements in economic data (according to the ECB) would be a turnaround. Higher German inflation and stronger European growth in Q3 have saved the euro from a downward spiral.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) kept the interest rate steady in its recent meeting. Still, the language indicates they need to be “restrictive for sufficiently long” and the "gradual need" for decreasing the rate. STIR pricing indicates an 86% chance of a cut on Thursday
As with the ECB, the central bank's current key theme is fighting persistent inflation in the United Kingdom. So, it makes more sense to be dovish than hawkish. Not long ago, Governor Bailey hinted that "aggressive rate cuts" were possible if inflation went lower.
We mentioned that the current retracement may be the start of a more serious bear move. So far, that's what the pound is experiencing. The nearest key support is at 1.26156, while the resistance target is 1.34343.
Long-term outlook: weak bearish.
Sequential rate cuts by the BoE may soon be a reality due to the points discussed earlier. However, a new development is the UK budget, which has been seen as a reason for the central to proceed slowly in this regard. As usual, data remains essential going forward with GBP.
Japanese yen (JPY)
Short-term outlook: bullish.
Unlike in July this year, the Bank of Japan (BoJ) kept the interest rate the same last week. So, our outlook remains largely unchanged. However, a rise in USD/JPY could raise the possibility of the BoJ's intervention.
Governor Ueda of the BoJ noted not long ago that despite domestic economic recovery, recent exchange rate movements have reduced the upside risk of inflation (which has been on an upward trajectory). As recently as 31 October 2024, Ueda also stated that hikes would continue if the central bank's projections were realised.
The 139.579 support area is proving quite strong, boosting the yen since mid-September. Still, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
Lower US Treasury yields are one potential bullish catalyst for the yen (the opposite is true). Inflation pressures and wage growth would also provide upward momentum. We should also consider that the dovish tendencies of other major central banks and worsening US macro conditions are JPY-positive
Still, as a slight downer, near-term inflation risks subsiding (according to the BoJ) reduce the urgency for a rate hiking cycle.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) kept the interest rate unchanged during the Sept. 25 meeting. They further stated that they "did not explicitly consider rate hikes" for the future, which is a marginally dovish statement.
The Aussie remains sensitive to China’s recent economic woes, with some promising developments at times.
Finally, recent positive unemployment and labour data gives a base case for a hold in the RBA interest rate on Monday this week (priced at 97% probability according to STIR markets).
After failing to break the 0.69426 resistance level several times, the Aussie has retraced noticeably from this area. While this market looked bullish, this pullback does surprisingly indicate otherwise.
Still, we are quite far from the major support level at 0.63484, but consider the interesting dynamic with the opposite fundamentals of AUD and USD.
Long-term outlook: weak bullish.
While the RBA hasn’t ruled anything out, the central bank isn’t explicitly suggesting rate hikes in the future.
It’s crucial to be data-dependent with the Aussie, especially with core inflation as the RBA's key focus area.
However, the Australian dollar is pro-cyclical, meaning it is exposed to the economies and geopolitics of other countries, especially China.
New Zealand dollar (NZD)
Short-term outlook: bearish.
Unsurprisingly, the Reserve Bank of New Zealand (RBNZD) cut its interest rate by 50 bps recently and sees further easing ahead. This affirms another cut next month of potentially the same magnitude.
Furthermore, the central bank is confident that inflation will remain in the target zone, adding more impetus to the bearish bias.
Due to the rate cut, the Kiwi has been on a downward spiral, proving the strength of the major resistance level at 0.63790. Conversely, the major support is at 0.58498.
Long-term outlook: bearish.
The central bank's latest dovish stance (where it cut the interest rate) firmly puts the Kiwi in a 'bearish bracket.' They also revised the OCR rates lower and signalled steady winnings in the inflation battle.
Canadian dollar (CAD)
Short-term outlook: bearish.
The Bank of Canada (BoC) unsurprisingly delivered a 50 bps cut on Wednesday. Further cuts remain on the cards, with the long-term target being 3%.
The BoC is signalling victory over inflation due to the cuts, with Governor Macklem suggesting that they would probably cut further until they achieve the optimal low inflation. In their words, 'stick the landing.'
Overall, the bias remains bearish - expect strong rallies in CAD to find sellers.
While the short-term fundamental biases of USD and CAD are bearish, CAD is the weakest on the charts. USD/CAD has finally touched the key resistance at 1.39468. This week will determine whether this area will be breached or not. Meanwhile, the key support lies far down at 1.33586.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point. The Bank of Canada has recognised the lower economic growth, and Macklem wishes to see this increase. Furthermore, any big misses in upcoming GBP, inflation, and labour data would send CAD lower.
Still, encouraging oil prices and general economic data improvement would save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets were, as usual, correct in their 43% chance of a 25 bps rate cut (from 1.25% to 1%) recently. In the Sept. 26 meeting, the Swiss National (SNB) indicated its preparedness to intervene in the FX market and further rate cuts in the coming quarters.
The central bank's new Chair (Schlegel) said they "cannot rule out negative rates." Finally, the September CPI came in weak at 0.8%, against the expected year-on-year 1.1%.
Still, the Swiss franc can strengthen during geopolitical tensions like a worsening Middle East crisis.
USD/CHF has just broken out of the range (but only just) discussed in our last few reports. While remaining largely bearish, this market could return closer to the major support level at 0.83326 or climb its way to the higher major resistance level at 0.92244.
Long-term outlook: weak bearish.
The bearish sentiment remains after the last SNB meeting, while inflation is being tamed with lower revisions. We should also remember that the SNB's intervention prevents the appreciation of the Swiss franc.
The new chairman is more keen to cut rates than his predecessor, Jordan. The SNB aims for neutral rates between 0 and 0.50% (currently at 1%). However, STIR markets only see a 20% chance of a 50 bps cut next month.
Conclusion
In summary:
The USD will certainly be the talk of the town this week due to the upcoming elections and Fed rates.
Other noteworthy economic releases include the new interest rates for the British pound and the Australian dollar.
Our short and long-term fundamental outlooks remain unchanged from the last few weeks.
As always, hope for the best and prepare for the worst. This report should help you determine your bias toward each currency in the short and long term.
#FTM/USDT#FTM
The price is moving in a descending channel on the 1-hour frame upwards and is expected to continue.
We have a trend to stabilize above the moving average 100 again.
We have a downtrend on the RSI indicator that supports the rise by breaking it upwards.
We have a support area at the lower limit of the channel at a price of
0.6130.
Entry price 0.6194.
First target 0.6586.
Second target 0.6959.
Third target 0.7326.
NZDCAD TODAYNZDCAD TODAY for me is sell.
I open order with SL to TP 1: 1
Risk 1% account
This is just my view
AUDUSD TODAYAUDUSD TODAY for me is sell.
My risk is 1 % account.
I always remember about SL
target is 1:1
Market News Report - 27 October 2024The greenback was again a bullish force in the past week. Other currencies that put up an upward fight include the Swiss franc and euro. Then, the Bank of Canada delivered an expected cut in the CAD interest rate.
Let's see what to expect for our beloved forex market in the coming weeks in our market report.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: bearish.
Despite a recent 50 basis points (bps) rate cut, the Fed may not need to cut rates as aggressively going forward. This is partly due to recent positive job numbers and earnings data that exceeded expectations.
Still, the central bank has signalled the potential for two 25 bps drops by the end of this year. Meanwhile, a 50 bps cut has pretty much been priced out, with STIR (short-term interest rate) markets seeing a 14% chance of a hold next month.
Keep an eye out for NFP (Non-Farm Payrolls) data this coming Friday. This will probably be the next USD driver, along with the US elections next Tuesday.
The Dixie continues to head north after weeks of ranging around the key support area at 100.157. We have spoken several times about a potential technically-driven retracement (despite the bearish fundamentals).
Meanwhile, the key resistance is far away at 107.348, which will remain untouched for some time.
Long-term outlook: weak bearish.
The latest strong NFP report has raised expectations for a 25 bps rate cut (instead of 50 bps), which is giving USD a boost in the near term. So, there is no extreme dovish pricing anymore.
While the bearish bias remains, the dollar is gaining amid a broad pullback. This idea could prove even more relevant if Donald Trump wins the election on 05 November. Upcoming labour and GDP data will also be key in determining USD's long-term future.
Euro (EUR)
Short-term outlook: bearish.
The STIR markets were predictably accurate as the European Central Bank (ECB) cut the interest rate recently. However, they remain data-dependent on what to do in the future (although they are quite concerned about slow growth).
Also, the past week saw weaker economic data across various European nations. Finally, short-term interest rate markets have indicated an 84% chance of a rate cut in December.
The euro has finally made its bearish intention known on the charts, breaking the key support at 1.07774 (but only just). We need to see how this level reacts this week - so it's not out of the question. Meanwhile, the key resistance remains far higher at 1.12757.
Long-term outlook: bearish.
The latest rate cut and the avoidance of indicating a clear future move for the December meeting are among the key down-trending factors. Furthermore, a threat of a trade tariff with Trump could be negative.
However, any improvements in economic data (according to the ECB) would be a turnaround. So, we are changing our long-term bias from 'bearish' to 'weak bearish' now.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) kept the interest rate steady in its recent meeting. Still, the language indicates they need to be “restrictive for sufficiently long.” Also, the central bank's higher-ups stressed "a gradual need" to cut rates.
As with the ECB, the central bank's current key theme is fighting persistent inflation in the United Kingdom. So, it makes more sense to be dovish than hawkish. Not long ago, Governor Bailey hinted that "aggressive rate cuts" were possible if inflation went lower.
We mentioned that the current retracement may be the start of a more serious bear move. So far, that's what the pound is experiencing. The nearest key support is at 1.26156, while the resistance target is 1.34343.
Long-term outlook: weak bearish.
Sequential rate cuts by the BoE may soon be a reality. Also, weak CPI, labour, or GDP data should be expected to back up the bearish bias. To add further to this point, the last GDP print shows a poor UK economy. However, the central bank hopes for lower service inflation, which may provide relief.
Another interesting point is the latest CFTC (Commodity Futures Trading Commission) report, showing that GBP longs have been stretched to the upside. So, bullishness should be limited at some point.
Japanese yen (JPY)
Short-term outlook: bullish.
The primary bullish catalyst is the Bank of Japan’s (BoJ) recent decision to hike the interest rate. STIR markets expect a hold at the next meeting on Wednesday (but a hike at the start of next year).
Governor Ueda of the BoJ noted that despite domestic economic recovery, recent exchange rate movements have reduced the upside risk of inflation (which has been on an upward trajectory). All of this backs up the potential for a rate hold or hike.
The 139.579 support area is proving quite strong, boosting the yen since mid-September. Still, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
Lower US Treasury yields are one potential bullish catalyst for the yen (the opposite is true). Inflation pressures and wage growth would also provide upward momentum. We should also consider that the dovish tendencies of other major central banks and worsening US macro conditions are JPY-positive
Still, as a slight downer, near-term inflation risks subsiding (according to the BoJ) reduce the urgency for a rate hiking cycle.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) kept the interest rate unchanged during the Sept. 25 meeting. They further stated that they "did not explicitly consider rate hikes" for the future, which is a marginally dovish statement.
The Aussie remains sensitive to China’s recent economic woes. However, high iron prices have supported the former.
Finally, recent positive unemployment data gives a base case for a hold in the RBA interest rate meeting early next month.
After failing to break the 0.69426 resistance level several times, the Aussie has retraced noticeably from this area. While this market looked bullish, this pullback does surprisingly indicate otherwise.
Still, we are quite far from the major support level at 0.63484, but consider the interesting dynamic with the opposite fundamentals of AUD and USD.
Long-term outlook: weak bullish.
While the RBA hasn’t ruled anything out, the central bank isn’t explicitly suggesting rate hikes in the future.
It’s crucial to be data-dependent with the Aussie, especially with core inflation as the RBA's key focus area.
However, the Australian dollar is pro-cyclical, meaning it is exposed to the economies and geopolitics of other countries, especially China.
New Zealand dollar (NZD)
Short-term outlook: bearish.
Unsurprisingly, the Reserve Bank of New Zealand (RBNZD) cut its interest rate by 50 bps recently and sees further easing ahead. This affirms another cut next month of potentially the same magnitude.
Furthermore, the central bank is confident that inflation will remain in the target zone, adding more impetus to the bearish bias.
Due to the rate cut, the Kiwi has been on a downward spiral, proving the strength of the major resistance level at 0.63790. Conversely, the major support is at 0.58498.
Long-term outlook: bearish.
The central bank's latest dovish stance (where it cut the interest rate) firmly puts the Kiwi in a 'bearish bracket.' They also revised the OCR rates lower and signalled steady winnings in the inflation battle.
Canadian dollar (CAD)
Short-term outlook: bearish.
The Bank of Canada (BoC) unsurprisingly delivered a 50 bps cut on Wednesday. Further cuts remain on the cards, with the long-term target being 3%.
The BoC is signalling victory over inflation due to the cuts, with Governor Macklem suggesting that they would probably cut further until they achieve the optimal low inflation. In their words, 'stick the landing.'
Overall, the bias remains bearish - expect strong rallies in CAD to find sellers.
While the short-term fundamental biases of USD and CAD are bearish, CAD is weaker on the charts. USD/CAD is almost at the point of knocking on the key resistance at 1.39468, while the key support lies down at 1.33586.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point. The Bank of Canada has recognised the lower economic growth, and Macklem wishes to see this increase. Furthermore, any big misses in upcoming GBP, inflation, and labour data will send CAD lower.
Still, encouraging oil prices and general economic data improvement would save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets were, as usual, correct in their 43% chance of a 25 bps rate cut (from 1.25% to 1%) recently. In the Sept. 26 meeting, the Swiss National (SNB) indicated its preparedness to intervene in the FX market and further rate cuts in the coming quarters.
The central bank's new Chair (Schlegel) said they "cannot rule out negative rates." Finally, the September CPI came in weak at 0.8%, against the expected year-on-year 1.1%.
Still, the Swiss franc can strengthen during geopolitical tensions like a worsening Middle East crisis.
USD/CHF has just broken out of the range (but only just) discussed in our last few reports. While remaining largely bearish, this market could return closer to the major support level at 0.83326 or climb its way to the higher major resistance level at 0.92244.
Long-term outlook: weak bearish.
The bearish sentiment remains after the last SNB meeting, while inflation is being tamed with lower revisions. We should also remember that the SNB's intervention prevents the appreciation of the Swiss franc. The new chairman is more keen to cut rates than his predecessor, Jordan.
Conversely, 'safe haven flows,' and geopolitical risks can positively support the currency.
As with other central banks, inflation is a crucial metric in the SNB's policy rates.
Conclusion
In summary:
The USD seems particularly strong (despite being fundamentally bearish), with the upcoming NFP release and US elections as the events to watch.
This week's main high-impact news event is Wednesday's JPY interest rate decision.
Our short and long-term fundamental outlooks remain unchanged from the last few weeks.
As always, hope for the best and prepare for the worst. This report should help you determine your bias toward each currency in the short and long term.
Market News Report - 20 October 2024While it was a mild week, the US dollar was again among the strongest currencies. Other ones include CAD and GBP, while NZD was among the weakest.
Let's dive into what we should expect for each major forex market in our latest fundamental report.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: bearish.
Despite a recent 50 basis points (bps) rate cut, the Fed may not need to cut rates as aggressively going forward. This is partly due to positive job numbers and earnings data that exceeded expectations.
Still, the central bank has signalled the potential for two 25 bps drops by the end of this year. Meanwhile, a 50 bps cut has pretty much been priced out, with STIR (short-term interest rate) markets seeing a 14% chance of a hold next month.
The Dixie continues to head north after weeks of ranging around the key support area at 100.157. We have spoken about a potential technically-driven retracement (despite the bearish fundamentals).
Meanwhile, the key resistance is far away at 107.348, which will remain untouched for some time.
Long-term outlook: weak bearish.
The latest strong NFP report has raised expectations for a 25 bps rate cut (instead of 50 bps), which is giving USD a boost in the near term. So, there is no extreme dovish pricing anymore.
While the bearish bias remains, the dollar may gain amid a broad pullback. This idea could prove even more relevant if Donald Trump wins the upcoming election.
Euro (EUR)
Short-term outlook: bearish.
The STIR markets were predictably accurate as the European Central Bank (ECB) cut the interest rate last week.
However, they remain data-dependent on what to do in the future (although they are quite concerned about slow growth).
Also, the past week saw weaker economic data across various European nations. Finally, short-term interest rate markets have indicated an 83% chance of a rate cut in December.
The euro has finally made its bearish intention known on the charts after spending weeks near the resistance at 1.12757. It is close to the key support at 1.07774.
Long-term outlook: bearish.
The latest rate cut and the avoidance of indicating a clear future move for the December meeting are among the key down-trending factors. Furthermore, a threat of a trade tariff with Trump could be negative. Couple this with potential USD strength, and we have a clear bearish bias for the euro.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) kept the interest rate steady in its recent meeting. Still, the language indicates they need to be “restrictive for sufficiently long.” Also, the central bank's higher-ups stressed "a gradual need" to cut rates.
As with the ECB, the central bank's current key theme is fighting persistent inflation in the United Kingdom. So, it makes more sense to be dovish than hawkish. Not long ago, Governor Bailey hinted that "aggressive rate cuts" were possible if inflation went lower.
We mentioned that the current retracement may be the start of a more serious bear move. So far, that's what the pound is experiencing. The nearest key support is at 1.26156, while the resistance target is 1.34343.
Long-term outlook: weak bearish.
Sequential rate cuts by the BoE may soon be a reality. Also, weak CPI, labour, or GDP data should be expected to back up the bearish bias. However, the central bank hopes for lower service inflation, which may provide relief.
Another interesting point is the latest CFTC (Commodity Futures Trading Commission) report, showing that GBP longs have been stretched to the upside. So, bullishness should be limited at some point.
Japanese yen (JPY)
Short-term outlook: bullish.
The primary bullish catalyst is the Bank of Japan’s (BoJ) recent decision to hike the interest rate. STIR markets expect a hold at the next meeting but a hike at the start of next year.
Governor Ueda of the BoJ noted that despite domestic economic recovery, recent exchange rate movements have reduced the upside risk of inflation (which has been on an upward trajectory). All of this backs up the potential for a rate hold or hike.
The 139.579 support area is proving quite strong, boosting the yen since mid-September. Still, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
Lower US Treasury yields are one potential bullish catalyst for the yen (the opposite is true). Inflation pressures and wage growth would also provide upward momentum. We should also consider that the dovish tendencies of other major central banks and worsening US macro conditions are JPY-positive
Still, as a slight downer, near-term inflation risks subsiding (according to the BoJ) reduce the urgency for a rate hiking cycle.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) kept the interest rate unchanged during the Sept. 25 meeting. They further stated that they "did not explicitly consider rate hikes" for the future, which is a marginally dovish statement.
The Aussie remains sensitive to China’s recent economic woes. However, high iron prices have supported the former.
Finally, recent positive unemployment data gives a base case for a hold in the next RBA interest rate meeting.
After failing to break the 0.69426 resistance level several times, the Aussie has retraced noticeably from this area. Still, this market is bullish and far from the major support level at 0.63484.
Long-term outlook: weak bullish.
While the RBA hasn’t ruled anything out, the central bank isn’t explicitly suggesting rate hikes in the future.
It’s crucial to be data-dependent with the Aussie, especially with core inflation as the RBA's key focus area.
However, the Australian dollar is pro-cyclical, meaning it is exposed to the economies and geopolitics of other countries, especially China.
New Zealand dollar (NZD)
Short-term outlook: bearish.
Unsurprisingly, the Reserve Bank of New Zealand (RBNZD) cut its interest rate by 50 bps recently and sees further easing ahead. This affirms another cut next month of potentially the same magnitude.
Furthermore, the central bank is confident that inflation will remain in the target zone, adding more impetus to the bearish bias.
Due to the rate cut, the Kiwi has been on a downward spiral, proving the strength of the major resistance level at 0.63696. Conversely, the major support is at 0.58498.
Long-term outlook: bearish.
The central bank's latest dovish stance (where it cut the interest rate) firmly puts the Kiwi in a 'bearish bracket.' They also revised the OCR rates lower and signaled steady winnings in the inflation battle.
Canadian dollar (CAD)
Short-term outlook: bearish.
The Bank of Canada (BoC) recently dropped the interest rate to 4.25%, as anticipated by the markets for some time. Further cuts in the next few meetings are on the cards, with the long-term target being 3%.
Unemployment, weak economic growth, and mortgage stress are the key drivers for this dovishness.
Watch out for the new interest rate for CAD on Wednesday, where a 50 bps cut is predicted (77% chance).
While the short-term fundamental biases of USD and CAD are bearish, CAD is weaker on the charts. USD/CAD is making a steady uptick towards the key resistance at 1.39468, while the key support lies down at 1.33586.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point. Governor Macklem himself stated a while ago that it's reasonable to expect more cuts in the future. Any big misses in upcoming GBP, inflation, and labour data will send CAD lower.
Also, mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it.
Still, encouraging oil prices and general economic data improvement would save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets were, as usual, correct in their 43% chance of a 25 bps rate cut (from 1.25% to 1%) recently. In the Sept. 26 meeting, the Swiss National (SNB) indicated its preparedness to intervene in the FX market and further rate cuts in the coming quarters.
The central bank's new Chair (Schlegel) said they "cannot rule out negative rates." Finally, the September CPI came in weak at 0.8%, against the expected year-on-year 1.1%.
Still, the Swiss franc can strengthen during geopolitical tensions, such as a worsening Middle East crisis.
USD/CHF has just broken out of the range (but only just) discussed in our last few reports. While remaining largely bearish, this market could return closer to the major support level at 0.83326 or climb its way to the higher major resistance level at 0.92244.
Long-term outlook: weak bearish.
The bearish sentiment remains after the last SNB meeting, while inflation is being tamed with lower revisions. We should also remember that the SNB's intervention prevents the appreciation of the Swiss franc.
The new chairman is more keen to cut rates than his predecessor, Jordan. STIR markets are currently pricing a 23% chance of a 50 bps cut at the December meeting.
On the other hand, 'safe haven flows' and geopolitical risks can be positively supportive of the currency. As with other central banks, inflation is a crucial metric in the SNB's policy rates.
Conclusion
In summary:
This week's main high-impact news event is Wednesday's CAD interest rate decision.
Our short and long-term fundamental outlooks remain unchanged from the last few weeks.
As always, hope for the best and prepare for the worst. This report should help you determine your bias toward each currency in the short and long term.
NASDAQ Today More SellNASDAQ Today More Sell 85% for me
This is my scenario for trade
Risk no more than 1% account
This is just my view.
Market News Report - 13 October 2024The US dollar was buoyant this week against many currencies, continuing the same trend from the previous week. CHF was a close second, while the Japanese yen found itself among the weakest currencies.
Let's dive into what we should expect for each major forex market in our latest fundamental report.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: bearish.
Despite a recent 50 basis points (bps) rate cut, the Fed may not need to cut rates as aggressively going forward. This is partly due to positive job numbers and earnings data that exceeded expectations.
Still, the central bank has signalled the potential for two 25 bps drops by the end of this year. Meanwhile, a 50 bps cut has pretty much been priced out, with STIR (short-term interest rate) markets seeing a 14% chance of a hold next month.
After weeks of ranging around the key support area at 100.157, the DXY made its intention known to head north. We spoke about a potential technically-driven retracement (despite the bearish fundamentals).
Meanwhile, the key resistance is far away at 107.348, which will remain untouched for some time.
Long-term outlook: weak bearish.
The latest strong NFP report has raised expectations for a 25 bps rate cut (instead of 50 bps), which is giving USD a boost in the near term. So, there is no extreme dovish pricing anymore. While the bearish bias remains, the dollar may gain amid a broad pullback.
Euro (EUR)
Short-term outlook: bearish.
As usual, the STIR (short-term interest markets) were predictably accurate as the European Central Bank (ECB) cut the interest rate a few weeks ago. While 'being mum' about forward guidance, they revised core inflation projections higher.
Also, the past week saw weaker economic data across various European nations. Finally, short-term interest rate (STIR) markets have indicated a 92% chance of a rate cut at the October 17 meeting.
The euro has finally made its bearish intention known on the charts after spending weeks near the resistance at 1.12757. Meanwhile, this market isn't too far away from the key support at 1.07774.
Long-term outlook: bearish.
The ECB has yet to commit to a specific future path with the interest rate for some time. Due to lingering concerns over services inflation, a rate cut has become more likely than before and will be a key driver soon.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) kept the interest rate steady in its recent meeting. Still, the language indicates that they need to be “restrictive for sufficiently long.” Also, the central bank's higher-ups stressed "a gradual need" to cut rates.
As with the ECB, the central bank's current key theme is fighting persistent inflation in the United Kingdom. So, it makes more sense to be dovish than hawkish. Not long ago, Governor Bailey hinted that "aggressive rate cuts" were possible if inflation went lower.
This week, watch out for several key economic releases for GBP, such as the YoY inflation rate and unemployment rate.
We mentioned that the past week's downturn may be the start of a more serious bear move. So far, that's what the pound is experiencing. The next resistance target is 1.34825, while the nearest key support is at 1.26156.
Long-term outlook: weak bearish.
Sequential rate cuts by the BoE may soon be a reality. Also, expect any weak CPI, labour, and GDP data to back up the bearish bias. However, the central bank hopes for lower service inflation, which may provide relief.
Another interesting point is the latest CFTC (Commodity Futures Trading Commission) report, showing that GBP longs have been stretched to the upside. So, bullishness should be limited at some point.
Japanese yen (JPY)
Short-term outlook: bullish.
The primary bullish catalyst is the Bank of Japan’s (BoJ) recent decision to hike the interest rate. STIR markets expect a hold (99% probability) at the next meeting but a hike at the start of next year.
Governor Ueda of the BoJ noted that despite domestic economic recovery, recent exchange rate movements have reduced the upside risk of inflation (which has been on an upward trajectory). All of this backs up the potential for a rate hold or hike.
Keep an eye on the latest YoY inflation for JPY this Friday.
The 140.252 support area is proving quite strong, boosting the yen since mid-September. Still, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
Lower US Treasury yields are one potential bullish catalyst for the yen (the opposite is true). Inflation pressures and wage growth would also provide upward momentum. We should also consider that the dovish tendencies of other major central banks and worsening US macro conditions are JPY-positive
Still, as a slight downer, near-term inflation risks subsiding (according to the BoJ) reduce the urgency for a rate hiking cycle.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) kept the interest rate unchanged during the Sept. 25 meeting. They further stated that they "did not explicitly consider rate hikes" for the future, which is a marginally dovish statement.
The Aussie remains sensitive to China’s recent economic woes, especially with declining iron ore prices from the country’s steelmakers. As always, it depends on drops or rises in economic data like GDP, inflation, and labour.
After failing to break the 0.69426 resistance level several times, the Aussie retraced noticeably from this area. Still, this market is bullish and far from the major support level at 0.63484.
Long-term outlook: weak bullish.
The RBA has certainly changed their tune from hawkish to slightly hawkish/dovish. Overall, it's crucial to be data-dependent with the Aussie, especially with core inflation as the RBA's key focus area.
However, the Australian dollar is pro-cyclical, meaning exposure to the economies of other countries.
New Zealand dollar (NZD)
Short-term outlook: weak bearish.
Unsurprisingly, the Reserve Bank of New Zealand (RBNZD) cut its interest rate by 50 bps last Wednesday and sees further easing ahead. This affirms another cut next month of potentially the same magnitude.
Furthermore, the central bank is confident that inflation will remain in the target zone, adding more impetus to the bearish bias.
Due to the recent rate cut, the Kiwi has been on a downward spiral, proving the strength of the major resistance level at 0.63696. Conversely, the major support is at 0.58498.
Long-term outlook: bearish.
The central bank's latest dovish stance (where it cut the interest rate) firmly puts the Kiwi in a 'bearish bracket.' They also revised the OCR rates lower and signaled steady winnings in the inflation battle.
Canadian dollar (CAD)
Short-term outlook: bearish.
The Bank of Canada (BoC) recently dropped the interest rate to 4.25%, as anticipated by the markets for some time. Further cuts in the next few meetings are on the cards (with a 37% chance of a 50 bps cut next month), with the long-term target being 3%.
Unemployment, weak economic growth, and mortgage stress are the key drivers for this dovishness.
Watch out for the new YoY inflation rate for the Canadian dollar on Tuesday.
While the short-term fundamental biases of USD and CAD are bearish, CAD is weaker on the charts. USD/CAD is making a steady uptick towards the key resistance at 1.39468, while the key support lies down at 1.33586.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point. Governor Macklem himself stated a while ago that it's reasonable to expect more cuts in the future. Any big misses in the upcoming data for GBP, inflation, and GDP will probably boost the chance of a rate cut. STIR markets see a 63% chance of the latter happening later this month.
Also, mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it.
Expect encouraging oil prices and general economic data improvement to save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets were, as usual, correct in their 43% chance of a 25bps rate cut (from 1.25% to 1%) recently. In the Sept. 26 meeting, the Swiss National (SNB) indicated its preparedness to intervene in the FX market and further rate cuts in the coming quarters.
The central bank's new Chair (Schlegel) said they "cannot rule out negative rates." Finally, the September CPI came in weak at 0.8%, against the expected year-on-year 1.1%.
Still, the Swiss franc can strengthen during geopolitical tensions, such as a worsening Middle East crisis.
USD/CHF has just broken out of the range (but only just) discussed in our last report. While remaining largely bearish, this market could return closer to the major support level at 0.83326 or climb its way to the higher major resistance level at 0.92244.
Long-term outlook: weak bearish.
The bearish sentiment remains after the last SNB meeting, while inflation is being tamed with lower revisions. We should also remember that the SNB's intervention prevents the appreciation of the Swiss franc.
The new chairman is more keen to cut rates than his predecessor, Jordan. STIR markets are currently pricing a 23% chance of a 50 bps cut at the December meeting.
On the flip side, 'safe haven flows' and geopolitical risks can be positively supportive for the currency. As with other central banks, inflation is a crucial metric in the SNB's policy rates.
Conclusion
In summary:
-There are plenty of new inflation rate announcements to diarise this week.
-The euro's interest rate decision is the most anticipated news event heading into the new week.
- All our fundamental outlooks for each currency remain unchanged except for a higher bearish inclination for NZD.
As always, hope for the best and prepare for the worst. This report should help you determine your bias toward each currency in the short and long term.
Market News Report - 06 October 2024The last were turned this week for AUD, which went from being one of the top-performing currencies to among the worst. Conversely, the dollar gained the upper hand partly because of positive job numbers.
Let's see how the coming weeks may turn out for the major currencies in our latest market news report.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: bearish.
The Fed's recent historic 50 basis points (bps) rate cut keeps the bearish bias firmly in place. However, the stronger-than-expected jobs report put a spanner in the works, pricing out a 50 bps cut in the next meeting.
However, the central bank has signalled the potential for two 25 bps drops by the end of this year. STIR (short-term interest rate) markets see a 97% chance of this cut in the meeting next month.
After weeks of ranging around the key support area at 100.617, the DXY made its intention known to head north. We spoke about a potential technically-driven retracement (despite the bearish fundamentals).
Meanwhile, the key resistance is far away at 107.348, which will remain untouched for some time.
Long-term outlook: weak bearish.
Markets anticipate several rate cuts before the year ends, with the Fed keen to harness a soft landing. Also, any data on weakened jobs would be another bearish driver for the dollar.
However, the recent upbeat Non-Farm Payrolls figure makes rate cuts less urgent, allowing for potential further USD retracement.
Euro (EUR)
Short-term outlook: bearish.
As usual, the STIR (short-term interest markets) were predictably accurate as the European Central Bank (ECB) cut the interest rate a few weeks ago. While 'being mum' about forward guidance, they revised core inflation projections higher.
Also, the past week saw weaker economic data across various European nations. Finally, short-term interest rate (STIR) markets have indicated a 100% chance (up from 93% last week) of a rate cut at the October 17 meeting.
The euro stayed around the 1.1200 area for over two months. However, it broke the range, showing the first of bearish pressure. Still, this market finds itself not far between the major resistance at 1.12757 and key support at 1.07774.
Long-term outlook: bearish.
After a long period, we have changed the long-term bias to 'bearish' (from 'weak bearish'). The ECB has yet to commit to a specific future path with the interest rate for some time.
Due to lingering concerns over services inflation, a rate cut in October has become more likely than before.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) kept the interest rate steady in its meeting. Still, the language indicates that they need to be “restrictive for sufficiently long.” Also, the central bank's higher-ups stressed "a gradual need" to cut rates.
As with the ECB, the central bank's current key theme is fighting persistent inflation in the United Kingdom. So, it makes more sense to be dovish than hawkish. Governor Bailey even hinted last Thursday that "aggressive rate cuts" were possible if inflation went lower.
This past week's downturn may be the start of a more serious bear move. Nonetheless, the next resistance target is 1.34825. Meanwhile, the nearest key support is at 1.26156.
Long-term outlook: weak bearish.
Sequential rate cuts by the BoE may soon be a reality. Also, expect any weak CPI, labour, and GDP data to back up the bearish bias. However, the central bank hopes for lower service inflation, which may provide relief.
Another interesting point is the latest CFTC (Commodity Futures Trading Commission) report, showing that GBP longs have been stretched to the upside. So, bullishness should be limited at some point.
Japanese yen (JPY)
Short-term outlook: bullish.
The primary bullish catalyst is the Bank of Japan’s (BoJ) recent decision to hike the interest rate. STIR markets expect a hold (99% probability) at the next meeting but a hike at the start of next year.
Governor Ueda of the BoJ noted that despite domestic economic recovery, recent exchange rate movements have reduced the upside risk of inflation. All of this backs up the potential for a rate hold or hike.
The 140.252 support area is proving quite strong, boosting the yen since mid-September. Still, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
Lower US Treasury yields are one potential bullish catalyst for the yen (the opposite is true). Inflation pressures and wage growth would also provide upward momentum. We should also consider that the dovish tendencies of other major central banks and worsening US macro conditions are JPY-positive
Still, as a slight downer, near-term inflation risks subsiding (according to the BoJ) reduce the urgency for a rate hiking cycle.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) kept the interest rate unchanged during the Sept. 25 meeting. They further stated that they "did not explicitly consider rate hikes" for the future, which is a marginally dovish statement.
The Aussie remains sensitive to China’s recent economic woes, especially with declining iron ore prices from the country’s steelmakers. As always, it depends on drops or rises in economic data like GDP, inflation, and labour.
After failing to break the 0.68711 resistance level several times, the Aussie retraced noticeably from this area. Still, this market is bullish and far from the major support level at 0.63484.
Long-term outlook: weak bullish.
The RBA has certainly changed their tune from hawkish to slightly hawkish/dovish. Overall, it's crucial to be data-dependent with the Aussie, especially with core inflation as the RBA's key focus area.
However, the Australian dollar is pro-cyclical, so it is exposed to economic growth in other countries.
New Zealand dollar (NZD)
Short-term outlook: weak bearish.
In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.'
The Reserve Bank of New Zealand (RBNZD) also revised cash rate projections lower, which further signals a dovish move. Finally, various core inflation metrics are consistent with stable and low inflation.
The markets see a 100% chance (up from 70% last week) of a 0.5% rate cut at Tuesday's meeting.
The major resistance level at 0.63696 is proving past strength as we see a noteworthy retracement (similar to its neighbouring Aussie).
Conversely, the major support is at 0.58498, an area which it is unlikely to test soon.
Long-term outlook: weak bearish.
In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.'
However, as a risk-sensitive currency like the Aussie, any growth data in China could trigger bullishness for NZD. So, traders should be data-dependent.
Canadian dollar (CAD)
Short-term outlook: bearish.
The Bank of Canada (BoC) recently dropped the interest rate to 4.25%, as anticipated by the markets for some time. Further cuts in the next few meetings are on the cards (with a 63% chance of a 50 bps cut next month), with the long-term target being 3%.
Unemployment, weak economic growth, and mortgage stress are the key drivers for this dovishness.
Speaking of the former, keep an eye on the CAD unemployment rate on Friday (where no change is expected).
The CAD continues to strengthen mildly due to USD weakness. It now looks to test the next major support target at 1.33586, while the major resistance is far ahead at 1.39468.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point. Governor Macklem himself stated a while ago that it's reasonable to expect more cuts in the future. Any big misses in the upcoming data for GBP, inflation, and GDP will probably boost the chance of a rate cut. STIR markets see a 63% chance of the latter happening later this month.
Also, mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it.
Expect encouraging oil prices and general economic data improvement to save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets were, as usual, correct in their 43% chance of a 25bps rate cut (from 1.25% to 1%) this past week. In the Sept. 26 meeting, the Swiss National (SNB) indicated its preparedness to intervene in the FX market and further rate cuts in the coming quarters.
The central bank's new Chair (Schlegel) said they "cannot rule out negative rates." Finally, the September CPI came in weak at 0.8%, against the expected year-on-year 1.1%.
Still, the Swiss franc can strengthen during geopolitical tensions, such as a worsening Middle East crisis.
While we see a clear range, this market is looking to break it (even though it remains a strong bear move).
The major support level is closer at (0.83326), while the major resistance level is far higher at 0.92244.
Long-term outlook: weak bearish.
The bearish sentiment remains after the last SNB meeting, while inflation is being tamed with lower revisions. We should also remember that the SNB's intervention prevents the appreciation of the Swiss franc.
The new chairman is more keen to cut rates than his predecessor, Jordan. STIR markets are currently pricing a 22% chance of a 50 bps cut at the meeting in December.
On the flip side, 'safe haven flows' and geopolitical risks can be positively supportive for the currency. As with other central banks, inflation is a crucial metric in the SNB's policy rates.
Conclusion
Besides the NZD interest rate decision, this week isn't filled with high-impact economic events, reducing the chance of high volatility.
Still, hope for the best and prepare for the worst. This report should help you determine your bias toward each currency in the short and long term.
Market News Report - 29 September 2024Due to an unsurprising rate hold, the Aussie was among the top-performing currencies in the major forex markets. Meanwhile, the dollar fell against AUD and several other currencies as the recent Fed cut continues to downplay the greenback.
Have any fundamental outlooks changed for this week compared to our last report? Let's find out.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: bearish.
Unsurprisingly, the Fed's recent historic 50 basis points (bps) rate cut is still a hot topic, keeping the bearish bias firmly in place. The central bank has signalled the potential for two 25 bps drops by the end of this year.
In line with this sentiment, the Fed also revised 'dots' lower, Gross Domestic Product (GDP) and unemployment higher.
Negative expected jobs and ISM services data coming this week will add further to the bearish pressure.
Despite these fundamentals, the DXY has yet to break the support area at 100.617, instead ranging around this level for quite a while now. So, be mindful of a potential technically-driven retracement.
Meanwhile, the key resistance is far away at 107.348, which will remain untouched for some time.
Long-term outlook: weak bearish.
Markets anticipate rate cuts before the year ends, with the Fed keen to harness a soft landing. Also, any data on weakened jobs would be another bearish driver for the dollar.
However, any potential strength in upcoming GDP (Gross Domestic Product) and jobs would make rate cuts less urgent, allowing for a USD retracement.
Euro (EUR)
Short-term outlook: weak bearish.
As usual, the STIR (short-term interest markets) were predictably accurate as the European Central Bank (ECB) cut the interest rate a few weeks ago. While 'being mum' about forward guidance, they revised core inflation projections higher.
Also, the past week saw weaker economic data across various European nations. Finally, short-term interest rate (STIR) markets have indicated a 93% chance of a rate cut in October.
Meanwhile, the chart tells a slightly different story. After recently breaking a major resistance, the next target is 1.12757. Meanwhile, the key support area lies far below at 1.07774.
Long-term outlook: bearish.
After a long period, we have changed the long-term bias to 'bearish' (from 'weak bearish'). The ECB has yet to commit to a specific future path with the interest rate for some time.
Due to lingering concerns over services inflation, a rate cut in October has become more likely than before. There is a 7% chance (down from 67% of a hold (according to STIR markets). All of this accents the bearish bias.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) kept the interest rate steady in its meeting. Still, the language indicates that they need to be “restrictive for sufficiently long.” Early last week, the central bank's higher-ups stressed "a gradual need" to cut rates.
As with the ECB, the central bank's current key theme is fighting persistent inflation in the United Kingdom. So, it makes more sense to be dovish than hawkish. Expect any shocks in inflation (or other data like labour) to send the pound lower.
Like the euro, the British pound has been saved by dollar weakness on the charts. However, it is more bullish. We must go onto the weekly chart to see the next resistance target at (1.34825).
On the other hand, the nearest key support is far away at 1.26156.
Long-term outlook: weak bearish.
Sequential rate cuts by the BoE may soon be a reality. Also, expect any weak CPI, labour, and GDP data to back up the bearish bias. However, the central bank hopes for lower service inflation, which may provide relief.
Another interesting point is the latest CFTC (Commodity Futures Trading Commission) report, showing that GBP longs have been stretched to the upside. So, bullishness should be limited at some point.
Japanese yen (JPY)
Short-term outlook: bullish.
The primary bullish catalyst is the Bank of Japan’s (BoJ) recent decision to hike the interest rate. STIR markets expect a hold (99% probability) at the next meeting but a hike at the start of next year.
Governor Ueda of the BoJ noted that despite domestic economic recovery, recent exchange rate movements have reduced the upside risk of inflation. All of this backs up the potential for a rate hold or hike.
USD/JPY has long been bearish, recently surpassing (but not breaking with confidence) the major resistance at 140.252. Meanwhile, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
Lower US Treasury yields are one potential bullish catalyst for the yen (the opposite is true). Inflation pressures and wage growth would also provide upward momentum. We should also consider that the dovish tendencies of other major central banks and worsening US macro conditions are JPY-positive
Still, as a slight downer, near-term inflation risks subsiding (according to the BoJ) reduce the urgency for a rate hiking cycle.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) kept the interest rate unchanged during the Sept. 24 meeting. They further stated that they "did not explicitly consider rate hikes" for the future, which is a marginally dovish statement.
The Aussie remains sensitive to China’s recent economic woes, especially with declining iron ore prices from the country’s steelmakers. As always, it depends on drops or rises in economic data like GDP, inflation and labour.
The Aussie market has risen noticeably of late, having exceeded the recent resistance level at 0.68711. However, as it has yet to break the level confidently, we need to see how it behaves near the latter.
Meanwhile, the major support level is down at 0.63484.
Long-term outlook: weak bullish.
The RBA has certainly changed their tune from hawkish to slightly hawkish/dovish. Overall, it's crucial to be data-dependent with the Aussie, especially with core inflation as the RBA's key focus area.
However, the Australian dollar is pro-cyclical, so it is exposed to economic growth in other countries.
New Zealand dollar (NZD)
Short-term outlook: weak bearish.
In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.'
Furthermore, the Reserve Bank of New Zealand (RBNZD) also revised cash rate projections lower, which signals a dovish move. The markets see a 70% chance of an 0.5% rate cut next month.
The Kiwi has recently breached a major resistance at 0.62220. While the next target is at 0.63696 (where it is very close to hitting), the latter area is still worth considering.
Conversely, the major support is at 0.58498, an area which it is unlikely to test soon.
Long-term outlook: weak bearish.
In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.'
However, as a risk-sensitive currency like the Aussie, any growth data in China could trigger bullishness for NZD. So, traders should be data-dependent.
Canadian dollar (CAD)
Short-term outlook: bearish.
The Bank of Canada (BoC) recently dropped the interest rate to 4.25%, as anticipated by the markets for some time. Further cuts in the next few meetings are on the cards (with a 57% chance of a 50bps cut next month), with the long-term target being 3%.
Unemployment, weak economic growth, and mortgage stress are the key drivers for this dovishness.
The CAD continues to strengthen mildly due to USD weakness. It now looks to test the next major support target at 1.33586, while the major resistance is far ahead at 1.39468.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point. Governor Macklem himself stated a while ago that it's reasonable to expect more cuts in the future. Any big misses in the upcoming data for GBP, inflation, and GDP will probably boost the chance of a rate cut next month.
Also, mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it.
Expect encouraging oil prices, along with general economic data improvement, to save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets were, as usual, correct in their 43% chance of a 25bps rate cut (from 1.25% to 1%) this past week. In the Sept. 26 meeting, the Swiss National (SNB) indicated its preparedness to intervene in the FX market and further rate cuts in the coming quarters.
Still, the Swiss franc can strengthen during geopolitical tensions, such as a worsening Middle East crisis.
We are seeing a clear range on USD/CHF in a strong bear move. So, let's see which side the market is going to incline more towards going forward (although it looks more south than north).
The major support level is closer at (0.83326), while the major resistance level is far higher at 0.92244.
Long-term outlook: weak bearish.
The bearish sentiment remains after the last SNB meeting, while inflation is being tamed with lower revisions. We should also remember that the SNB's intervention prevents the appreciation of the Swiss franc.
On the flip side, 'safe haven flows' and geopolitical risks can be positively supportive for the currency. As with other central banks, inflation is a crucial metric in the SNB's policy rates.
Conclusion
We have kept our fundamental outlooks the same, except for the long-term outlook on the euro. Anyone trading the latter in the coming weeks should bear this in mind. Besides the US-related news, this week isn't filled with high-impact economic events, meaning less volatility.
Still, hope for the best and prepare for the worst. This report should help you determine your bias toward each currency in the short and long term.
AUDUSD TODAYAUDUSD TODAY for me is continue long trend.
I wait for open USA or change structure on H1, M15
SL below last low
This is my opinion
Market News Report - 22 September 2024It was a historic week in FX, as the Fed delivered a half-percent interest rate cut for the first time since 2020. Based partly on this news, currencies like the British pound and the Australian dollar found strength across numerous markets.
In our latest news report, let's see what to expect from all the major forex markets performance-wise.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: bearish.
Unsurprisingly, the Fed delivered a dovish move with a historic 50 basis points (bps) rate cut. So, the bearish bias firmly remains, with signals of two 25 bps cuts in the pipeline for the rest of 2024.
Furthermore, unemployment was recently revised higher.
The DXY chart aligns perfectly with the fundamentals, having recently reached a major support area (100.617) on the daily chart. Interestingly, a clear break has yet to occur after several weeks. So, be mindful of a potential technically driven retracement.
Meanwhile, the key resistance is far away at 107.348, which will remain untouched for some time.
Long-term outlook: weak bearish.
Markets anticipate several full rate cuts before the year ends, with the Fed being keen to harness a soft landing. Also, any data on weakened jobs would be another bearish driver for the dollar.
However, any potential strength in upcoming GDP (Gross Domestic Product) and jobs would make rate cuts less urgent, allowing for a USD retracement.
Euro (EUR)
Short-term outlook: weak bearish.
As usual, the STIR (short-term interest markets) were predictably accurate as the European Central Bank (ECB) cut the interest rate. While 'being mum' about forward guidance, they revised core inflation projections higher.
Sources report that a cut in October is unlikely, but one in December is more likely.
Meanwhile, the chart tells a slightly different story. After recently breaking a major resistance, the next target is 1.12757. Meanwhile, the key support area lies far below at 1.07774.
Long-term outlook: weak bearish.
The ECB hasn't committed to a specific future path with the interest rate. Due to lingering concerns over services inflation, a rate cut in October is less likely, with a 76% chance of a hold (according to STIR markets).
So future inflation data remains key, with improvements likely to tick the euro higher. We should note that the interest rate differential has become more positive for EUR after the latest Fed cut.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) kept the interest rate steady in last week's meeting. Still, the language indicates they need to be "restrictive for sufficiently long."
As with the ECB, the central bank's current key theme is fighting persistent inflation in the United Kingdom. So, it makes more sense to be dovish than hawkish. Expect any shocks in inflation (or other data like labour) to send the pound lower.
Like the euro, the British pound has been saved by dollar weakness on the charts. However, it is more bullish. We must go onto the weekly chart to see the next resistance target at (1.34825). However, it hasn't yet properly broken the closest area at 1.32666.
On the other hand, the nearest key support is far away at 1.26156.
Long-term outlook: bearish.
Sequential rate cuts by the BoE may soon be a reality. Also, expect any weak CPI, labour, and GDP data to back up the bearish bias.
Another interesting point is the latest CFTC (Commodity Futures Trading Commission) report, showing that GBP longs have been stretched to the upside. So, bullishness should be limited.
Japanese yen (JPY)
Short-term outlook: bullish.
The primary bullish catalyst is the Bank of Japan's (BoJ) recent decision to hike the interest rate.
STIR markets expect a hold (99% probability) at the next meeting but a hike at the start of next year.
Governor Ueda of the BoJ noted that despite domestic economic recovery, recent exchange rate movements have reduced the upside risk of inflation. All of this backs up the potential for a rate hold or hike.
USD/JPY has long been bearish, recently surpassing (but not breaking with confidence) the major resistance at 140.252. Meanwhile, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
Lower US Treasury yields are one bullish catalyst for the yen. Inflation pressures and wage growth would also provide upward momentum.
We should also consider that the dovish tendencies of other major central banks are JPY-positive.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) unsurprisingly kept the interest rate unchanged not long ago to keep the fight against persistent inflation rate. (Diarise the upcoming rate statement on Tuesday for AUD.)
Governor Bullock also stressed that the latter's results need to improve before a cut is envisioned.
The Aussie remains sensitive to China's recent economic woes, especially with declining iron ore prices from the country's steelmakers.
The Aussie market has risen noticeably of late, having exceeded the recent resistance level (at 0.68239). While the next nearby target is 0.68711, we need to see how it behaves near the latter.
Meanwhile, the major support level is down at 0.63484.
Long-term outlook: weak bullish.
The RBA remains hawkish as per their last meeting, focusing on core inflation. Overall, it's crucial to be data-dependent with the Aussie, with recent labour data keeping the bullish script alive.
However, the Australian dollar is pro-cyclical, so it is exposed to slow economic growth in other countries.
New Zealand dollar (NZD)
Short-term outlook: weak bearish.
New Zealand's central bank recently dropped the Kiwi's interest rate from 5.50% to 5.25%.
Lower-revised cash rate projections also hint at the potential for further cuts in the near future.
The Kiwi has recently breached a major resistance at 0.62220. While the next target is at 0.63696, the latter area is still worth considering.
Conversely, the major support is at 0.58498, an area which it is unlikely to test soon.
Long-term outlook: weak bearish.
In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.'
However, as a risk-sensitive currency like the Aussie, any growth data in China could trigger bullishness for NZD. As with its counterpart, traders should be data-dependent.
Canadian dollar (CAD)
Short-term outlook: bearish.
The Bank of Canada (BoC) dropped the interest rate to 4.25%, as anticipated by the markets for some time. Further cuts in the next few meetings are on the cards, with the long-term target being 3%.
Rising unemployment and weak economic growth are the key drivers for this dovishness. The ongoing mortgage stress remains another bearish catalyst.
The CAD continues to strengthen mildly due to USD weakness. It now looks to test the next major support target at 1.33586, while the major resistance is far ahead at 1.39468.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point. Governor Macklem himself stated some time ago that it's reasonable to expect more cuts in the future. Moreover, STIR markets have priced in an additional cut sometime this year.
The mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it. Still, this narrative is getting tired.
Expect encouraging oil prices, along with general economic data improvement, to save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets forecast a 25bps rate cut this week (a 43% chance, up from 36% in the last week) and a 50bps cut in December this year.
Secondly, SNB expects a moderate improvement in inflation, GDP (Gross Domestic Product), and unemployment to rise slightly in the near term.
Still, the Swiss franc can strengthen during geopolitical tensions, such as a worsening Middle East crisis.
We are seeing a clear range on USD/CHF in a strong bear move. So, let's see which side the market is going to incline more towards going forward.
The major support level is closer at (0.83326), while the major resistance level is far higher at 0.92244.
Long-term outlook: weak bearish.
The expected rate cut in the next SNB meetings for 2024 is the main bearish driver. However, the SNB's chairperson, Thomas Jordan, expressed that "appreciation of the Swiss Franc has an impact on monetary policy." This means that potential intervention by the central bank can go either way.
Conclusion
This week should be milder than the previous one filled with interest rate decisions. The main high-impact economic release to watch out for is the RBA rate statement on Tuesday.
As always, hope for the best and prepare for the worst, but this report should help you determine your bias toward each currency.
OIL TODAYI expect reverse to down.
i will wait for change structure on M15, H1 and open sell order.
This is my view
US100 / NASDAQ TodayFor me looks like go up more, more.
I expect back to retest and continiue UP.
Just my view.
My risk is 1% account
Market News Report - 15 September 2024This past week, the Japanese yen was the strongest currency against all the major forex markets. Meanwhile, its counterparts performed mildly.
How long will the yen be dominant? What about the other currencies? This week consists of several high-impact, interest rate-related events that will surely be a spectacle.
Let's discuss each major forex currency's short and long-term outlooks in our latest report.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: bearish.
STIR (short-term interest rate) markets expect at least four full rate cuts before the end of this year. They also suggest a 50% chance (up from 36% last week) of a 50 bps (basis points) cut at this week's meeting. So, diarise this high-impact news event.
However, any sense of the Fed holding back on a cut would send the dollar sharply higher.
The DXY chart aligns perfectly with the fundamentals. It recently reached a major support area (100.617) on the daily chart and is still near this level.
Meanwhile, the key resistance is far away at 107.348 and will likely remain untouched for some time.
Long-term outlook: bearish.
Markets anticipate several full rate cuts before the year ends. However, the meeting on Thursday may strengthen the USD if the Fed doesn't proceed with a 50 bps cut. Still, data on weakened jobs is another bearish driver for the dollar.
Only geopolitical risks, bond market selling, and interest rate differentials can affect this sentiment.
Euro (EUR)
Short-term outlook: weak bearish.
The European Central Bank (ECB) lowered the interest rate as we've predicted for several weeks. However, STIR markets have shifted towards a hawkish direction for future ECB meetings. We should also note that the central bank remains 'data-dependent' and not committed to the potential for cuts going forward.
We've seen some bearishness on the euro chart. It is some distance from the major resistance at 1.127575, and it's hard to tell where it may attempt to reach this area soon. Meanwhile, the key support area lies far below at 1.07774.
Long-term outlook: weak bearish.
The ECB hasn't committed to a specific future path with the interest rate. Furthermore, the central bank is overly concerned about services inflation, reducing the chance of a rate cut next month. Also, STIR markets anticipate a 67% chance of a hold during this meeting.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) cut the interest rate by 25 basis points at the beginning of last month. However, the BoE remains data-dependent and has no set future path. STIR markets are currently pricing two additional cuts for the remainder of 2024.
The central bank's current key theme is fighting persistent inflation in the United Kingdom. Any future failures here would likely weaken the GBP.
Watch out for the new interest rate (or 'Official Bank Rate') this Thursday.
As with the euro, the British pound has been saved by dollar weakness on the charts. It recently breached the major resistance at 1.31424. So, the next area of interest is near by at 1.32666.
On the other hand, the nearest key support is far below at 1.26156.
Long-term outlook: weak bearish.
While the interest rate is the chief bearish driver for the pound, the BoE has yet to signal a future path in this regard.
STIR markets predict a rate hold next for the Thursday meeting (79% chance vs. 74% chance last week). Furthermore, two-way risks remain based on upcoming economic data, particularly inflation.
Japanese yen (JPY)
Short-term outlook: bullish.
The primary bullish catalyst is the Bank of Japan’s (BoJ) recent decision in July to hike the interest rate (15 bps hike vs the 10 bps expected).
STIR markets expect a hold (99% probability) at the next meeting this Friday but a hike at the start of next year. So, the bullish bias is intact, more so with the rate-cutting mood of other major centrals like the Fed, ECB, and BoE.
The USD/JPY market perfectly reflects the fundamental outlook of the dollar and yen. Very few would have predicted the current picture of this chart. This pair is very close to touching the major support area at 140.252.
Meanwhile, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
In addition to the recent rate hike (and the potential for a hold at the next meeting), lower US Treasury yields are other bullish catalysts for the yen.
Also, the Bank of Japan is actively intervening in the forex markets, contributing to the JPY's upside for many weeks.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) unsurprisingly kept the interest rate unchanged not long ago to keep the fight against persistent inflation.
Moreover, Governor Bullock expressed last week that the central bank must see 'results' on the latter before lowering rates. Inflation is also a problem for the RBA, indicating that rate cuts would be premature.
Like many currencies, the Aussie remains data-sensitive, whether we consider economic growth, labour, or inflation going forward. As a pro-cyclical currency, China's economic woes have been negative for the Aussie (something else to keep in mind).
The Aussie market has risen noticeably of late, having reached a recent resistance level (0.67986). While dipping last week, the next target at 0.68711 isn't so far away.
Meanwhile, the major support level is down at 0.63484.
Long-term outlook: weak bullish.
The RBA remains hawkish as per the recent meeting, focusing on core inflation. Overall, it's crucial to be data-dependent with the Aussie, with recent labour data keeping the bullish script alive.
However, the Australian dollar is pro-cyclical. So, it is exposed to slow economic growth in other countries.
New Zealand dollar (NZD)
Short-term outlook: weak bearish.
New Zealand's central bank dropped the Kiwi's interest rate from 5.50% to 5.25% last month.
Lower-revised cash rate projections and a variety of core inflation measures also hint at the potential for further cuts in the near future. However, it is the usual data-dependency for NZD that could drive the currency either direction.
The Kiwi has recently breached a major resistance at 0.62220 - the next target is 0.63696. Conversely, the major support is at 0.58498, an area that it is unlikely to test soon.
Long-term outlook: weak bearish.
In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.'
However, as a risk-sensitive currency like the Aussie, any growth data in China could trigger bullishness for the NZD. As with other currencies, traders should be data-dependent, especially around inflation and wages.
Canadian dollar (CAD)
Short-term outlook: bearish.
The Canadian dollar is fresh off an interest rate cut (from 4.50% to 4.25%). Furthermore, STIR markets indicate a 91% chance of another cut next month and two full rate cuts before the end of 2024.
Rising unemployment and weak economic growth are key drivers of the Bank of Canada's dovish stance. Let's not forget the ongoing mortgage stress, a long-running bearish theme for CAD.
Among other factors, Canada's ongoing mortgage stress has forced its central bank to be dovish.
Despite the above, the CAD continues to strengthen mildly due to USD weakness. It now looks to test the next major support target at 1.33586, while the major resistance is far ahead at 1.39468.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point, with the BoC governor Macklem himself saying it's reasonable to expect more cuts in the future. In the recent meeting, they also wished for economic growth.
The mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it.
However, expect encouraging oil prices, along with general economic data improvement, to save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets forecast a 25 bps rate cut later this month and in December this year. Also, despite the positive trend of falling inflation, the Swiss National Bank is pressured to weaken the Swiss franc to facilitate more exports.
However, the CHF can strengthen during geopolitical tensions like the Middle East crisis.
USD/CHF has trended down nicely for several weeks, now looking to test the support area at 0.83326. Meanwhile, the major resistance level is far higher at 0.92244.
Long-term outlook: weak bearish.
The expected rate cut in the next SNB meetings for 2024 is the main bearish driver. However, the SNB's chairperson, Thomas Jordan, expressed that "appreciation of the Swiss Franc has an impact on monetary policy." This means that potential intervention by the central bank can go either way.
Conclusion
The fundamental outlooks of each currency have remained unchanged from our previous report. Getting three interest rate decision events a day after another in a week happens once in a blue moon. Thus, we should expect higher-than-average volatility.
Otherwise, keep our fundamental outlooks in mind as you tackle this - hope for the best and prepare for the worst!
Market News Report - 08 September 2024Our fundamental outlooks for the major currencies remain the same from the past week. However, those that we considered bearish, like the British pound and the US dollar have shown strength recently.
Nonetheless, let's see what to expect from all the major forex markets performance-wise in our latest news report.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: bearish.
STIR (short-term interest rate) markets expect at least four full rate cuts before the end of this year. They also suggest a 36% chance of a 50 bps (basis points) cut at the meeting next week on the 18th.
Another bearish focus for the US is the slowing labour market, according to the latest jobs revisions data from the Bureau of Labor Statistics.
Diarise the upcoming inflation rate and initial jobless claims for the dollar this week.
The DXY chart aligns perfectly with the fundamentals. It recently reached a major support area (100.617) on the daily chart and is still near this level.
Meanwhile, the key resistance is far away at 107.348 and will likely remain untouched for some time.
Long-term outlook: bearish.
Markets anticipate several full rate cuts before the year ends. Also, data on weakened jobs is another bearish driver for the dollar.
Only geopolitical risks, bond market selling, and interest rate differentials can affect this sentiment.
Euro (EUR)
Short-term outlook: weak bearish.
The primary bearish driver is the interest rate, with STIR markets anticipating a very high chance of a 25 bps rate cut at the meeting this Thursday. Furthermore, the Governing Council affirmed that rates need to remain "sufficiently restrictive for as long as
necessary."
However, the European Central Bank (ECB) has also stressed that it is data-dependent. This means that certain economic data, like employment data, may boost the euro.
Meanwhile, the chart tells a slightly different story. After breaking the last major resistance (although dropping slightly now), the next target is 1.12757. Meanwhile, the key support area lies far below at 1.07774.
Long-term outlook: weak bearish.
The ECB hasn't committed to a specific future path with the interest rate. They are data-dependent, meaning data around inflation, growth, and wage improvement can lift the euro. However, their meeting in July was slightly more dovish than hawkish.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) cut the interest rate by 25 basis points at the beginning of last month. However, the BoE remains data-dependent and has no set future path. STIR markets are currently pricing two additional cuts for the remainder of 2024.
The central bank's current key theme is fighting persistent inflation in the United Kingdom. Any future failures here would likely weaken the GBP.
Watch out for the new unemployment and inflation rates on Tuesday and Wednesday, respectively.
As with the euro, the British pound has been saved by dollar weakness on the charts. It has just broken the major resistance at 1.31424. So, the next area of interest is near by at 1.32666.
On the other hand, the nearest key support is far below at 1.26156.
Long-term outlook: weak bearish.
While the interest rate is the chief bearish driver for the pound, the BoE has yet to signal a future path in this regard.
STIR markets predict a rate hold next month (74% chance vs. 62% chance last week). Furthermore, two-way risks remain based on upcoming economic data, particularly with inflation. Also, GBP/USD has been pushing higher of late due to USD weakness on Fed easing hopes.
Japanese yen (JPY)
Short-term outlook: bullish.
The primary bullish catalyst is the Bank of Japan’s (BoJ) recent decision in July to hike the interest rate (15 bps hike vs the 10 bps expected).
STIR markets expect a hold (99% probability, up from 95% last week) at the next meeting but a hike at the start of next year. So, the bullish bias is intact, more so with the rate-cutting mood of other major centrals like the Fed, ECB, and BoE.
The USD/JPY market perfectly reflects the fundamental outlook of the dollar and yen. This pair looks to now target the major support area at 140.252.
Meanwhile, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
In addition to the recent rate hike, other bullish catalysts for the yen include lower US Treasury yields.
Also, the Bank of Japan is actively intervening in the forex markets, contributing to the JPY's upside.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) unsurprisingly kept the interest rate unchanged not long ago to keep the fight against persistent inflation. Moreover, Governor Bullock expressed last week that the central bank must see 'results' on the latter before lowering rates.
Like many currencies, the Aussie remains data-sensitive, whether we look at economic growth, labour, or inflation going forward. The recent rise in China's share prices, which correlates with the Aussie, has been positive for the currency. Still, there is doubt over the longevity of this run.
The Aussie market has risen noticeably of late, having reached a recent resistance level (0.67986). While dipping last week, the next target at 0.68711 isn't so far away.
Meanwhile, the major support level is down at 0.63484.
Long-term outlook: weak bullish.
The RBA remains hawkish as per the recent meeting, focusing on core inflation. Overall, it's crucial to be data-dependent with the Aussie, with recent labour data keeping the bullish script alive.
However, the Australian dollar is pro-cyclical. So, it is exposed to slow economic growth in other countries.
New Zealand dollar (NZD)
Short-term outlook: weak bearish.
New Zealand's central bank recently dropped the Kiwi's interest rate from 5.50% to 5.25%.
Lower-revised cash rate projections also hint at the potential for further cuts in the near future.
The Kiwi has recently breached a major resistance at 0.62220 - the next target is 0.63696. Conversely, the major support is at 0.58498, an area that it is unlikely to test soon.
Long-term outlook: weak bearish.
The central bank's dovish stance in its latest meeting (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.'
However, as a risk-sensitive currency like the Aussie, any growth data in China could trigger bullishness for the NZD. As with its counterpart, traders should be data-dependent.
Canadian dollar (CAD)
Short-term outlook: bearish.
The Canadian dollar is fresh off an interest rate cut (from 4.50% to 4.25%), confirming the overwhelming probability suggested by STIR markets. Furthermore, the latter indicates a 91% chance of another cut next month and two full rate cuts before the end of 2024.
Among other factors, Canada's ongoing mortgage stress has forced its central bank to be dovish.
Despite the above, the CAD continues to strengthen mildly due to USD weakness (although the dollar gained the upper hand this past week). It now looks to test the next major support target at 1.33586, while the major resistance is far ahead at 1.39468.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point, with the BoC governor Macklem himself saying it's reasonable to expect more cuts in the future. In last week's meeting, they also wished for economic growth.
The mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it.
However, expect encouraging oil prices, along with general economic data improvement, to save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets forecast a rate cut later this month and December this year. Also, despite the positive trend of falling inflation, the Swiss National Bank is pressured to weaken the Swiss franc to make exports easier.
However, the CHF can strengthen during geopolitical tensions like the Middle East crisis.
USD/CHF has trended down nicely for several weeks, now looking to test the support area at 0.83326. Meanwhile, the major resistance level is far higher at 0.92244.
Long-term outlook: weak bearish.
The expected rate cut in the next SNB meetings for 2024 is the main bearish driver. However, the SNB's chairperson, Thomas Jordan, expressed that "appreciation of the Swiss Franc has an impact on monetary policy." This means that potential intervention by the central bank can go either way.
Conclusion
The fundamental outlooks of each currency have remained mostly unchanged from the previous report. Thursday will arguably be the most anticipated day due to the ECB's interest rate decision. However, keep an eye on the high-impact news events for the dollar and the British pound.
As always, hope for the best and prepare for the worst, but this report should help you determine your bias toward each currency in the short and long term.
Market News Report - 01 September 2024This past week, the euro faltered the most compared to other currencies. Meanwhile, the winners included the New Zealand and Canadian dollars.
Let's see what to expect from all the major forex markets performance-wise in our latest news report.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: bearish.
STIR (short-term interest rate) markets expect at least four full rate cuts before the end of this year. They also suggest a 30% chance of a 50 bps cut at the next meeting in mid-September.
Another bearish focus for the US is the slowing labour market. As with the beginning of any month, watch out for the unemployment rate and Non-Farm Payrolls on Friday.
The DXY chart aligns perfectly with the fundamentals, having recently reached a major support area (100.617) on the daily chart. Meanwhile, the key resistance is far away at 107.348 and will likely remain untouched for some time.
Long-term outlook: bearish.
Markets anticipate several full rate cuts before the year ends. Also, data on weakened jobs is another bearish driver for the dollar.
Only geopolitical risks, bond market selling, and interest rate differentials can affect this sentiment.
Euro (EUR)
Short-term outlook: weak bearish.
The European Central Bank (ECB) has stressed that it is data-dependent. This means that certain economic data, like employment data, may boost the euro.
However, the primary bearish driver is the interest rate, with STIR markets anticipating a 100% chance of a 25 bps rate cut at the next meeting this month.
On the bright side, German inflation recently fell to its lowest level since March 2021, to 1.9% (from 2.3% in July 2024).
Meanwhile, the chart tells a slightly different story. After breaking the last major resistance, the next target is 1.12757. Meanwhile, the key support area lies far below at 1.07774.
Long-term outlook: weak bearish.
The ECB hasn't committed to a specific future path with the interest rate. They are data-dependent, meaning data around inflation, growth, and wage improvement can lift the euro. However, their meeting in July was slightly more dovish than hawkish.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) cut the interest rate by 25 basis points at the beginning of last month. However, the BoE remains data-dependent and has no set future path. STIR markets are currently pricing two additional cuts for the remainder of 2024.
The central bank's current key theme is fighting persistent inflation in the United Kingdom. Any future failures here would likely weaken the GBP.
As with the euro, the British pound has been saved by dollar weakness on the charts. It has just broken the major resistance at 1.31424. Despite this, it remains an area of interest due to appearing in a high time frame.
On the other hand, the nearest key support is far away at 1.26156.
Long-term outlook: weak bearish.
While the interest rate is the chief bearish driver for the pound, the BoE has yet to signal a future path in this regard.
STIR markets predict a rate hold next month (74% chance vs. 62% chance last week). Furthermore, two-way risks remain based on upcoming economic data, particularly with inflation.
Japanese yen (JPY)
Short-term outlook: bullish.
The yen is the only currency where a change to the short-term outlook is necessary (from 'weak bullish' to 'bullish')
The primary bullish catalyst is the Bank of Japan’s (BoJ) recent decision to hike the interest rate.
STIR markets expect a hold (99% probability, up from 95% last week) at the next meeting but a hike at the start of next year. So, the bias is intact, and we should expect buyers on dips, more so with the dollar's macro outlook indicating a decline.
After cooling down recently, USD/JPY looks to have resumed its downtrend, aligning with the outlook mentioned.
The major support level to watch is 140.252. Meanwhile, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
In addition to the recent rate hike, other bullish catalysts for the yen include lower US Treasury yields.
Also, the Bank of Japan is actively intervening in the forex markets, contributing to the JPY's upside.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) unsurprisingly kept the interest rate unchanged not long ago to keep the fight against persistent inflation rate. Based on their language, a hike isn't out of the question this year.
Like many currencies, the Aussie remains data-sensitive, whether we look at economic growth, labour, or inflation going forward. The recent rise in China's share prices, which correlates with the Aussie, has been positive for the currency. Still, there is doubt over the longevity of this run.
The Aussie market has risen noticeably of late, having reached a recent resistance level. While the next nearby target is 0.68711, we need to see how it behaves at the latter.
Meanwhile, the major support level is down at 0.63484.
Long-term outlook: weak bullish.
The RBA remains hawkish as per last week's meeting, focusing on core inflation. Overall, it's crucial to be data-dependent with the Aussie, with recent labour data keeping the bullish script alive.
However, the Australian dollar is pro-cyclical, so it is exposed to slow economic growth in other countries.
New Zealand dollar (NZD)
Short-term outlook: weak bearish.
New Zealand's central bank recently dropped the Kiwi's interest rate from 5.50% to 5.25%.
Lower-revised cash rate projections also hint at the potential for further cuts in the near future.
The Kiwi has recently breached a major resistance at 0.62220. While we can look towards a future level, this area is still worth considering.
Conversely, the major support is at 0.58498, an area which it is unlikely to test soon.
Long-term outlook: weak bearish.
In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.'
However, as a risk-sensitive currency like the Aussie, any growth data in China could trigger bullishness for NZD. As with its counterpart, traders should be data-dependent.
Canadian dollar (CAD)
Short-term outlook: bearish.
The ongoing mortgage stress in Canada has forced the Bank of Canada (BoC) to be dovish, the first major bearish catalyst. With a rate cut last month, STIR markets have increased the probability to over 90% of the same in Wednesday's meeting.
The CAD continues to strengthen mildly due to USD weakness. It now looks to test the next major support target at 1.33586, while the major resistance is far ahead at 1.39468.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point, with the BoC governor Macklem himself saying it's reasonable to expect more cuts in the future. Moreover, STIR markets have priced in an additional cut sometime this year.
The mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it. Still, this narrative is getting tired.
Expect encouraging oil prices, along with general economic data improvement to save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets forecast a rate cut later this month (a 35% chance) and December this year.
Secondly, SNB expects a moderate improvement in inflation, GDP (Gross Domestic Product), and unemployment to rise slightly in the near term.
However, the Swiss franc can strengthen during geopolitical tensions like the Middle East crisis.
After a notable retracement at the start of last month, USD/CHF is looking to test the support area at 0.83326. Meanwhile, the major resistance level is far higher at 0.92244.
Long-term outlook: weak bearish.
The expected rate cut in the next SNB meetings for 2024 is the main bearish driver. However, the SNB's chairperson, Thomas Jordan, expressed that "appreciation of the Swiss Franc has an impact on monetary policy." This means that potential intervention by the central bank can go either way.
Conclusion
The fundamental outlooks of each currency have remained mostly unchanged from the previous report, except for JPY and NZD. Key news events to watch this week include the US unemployment rate and the CAD interest rate decision.
As always, hope for the best and prepare for the worst, but this report should help guide you in determining the bias you should have for each currency.
Market News Report - 25 August 2024While the yen was a bit stronger this week, the US dollar was the biggest loser, as it has done for several months this year.
While other currencies piggybacked off dollar weakness, the future is never guaranteed in the forex world.
Let's see what to expect from the major currency markets fundamentally and technically.
Market Overview
Below is a brief technical and fundamental analysis breakdown for all major currencies.
US dollar (USD)
Short-term outlook: bearish.
The latest Fed meeting was overall dovish, with Powell indicating a rate cut was on the table next month. STIR (short-term interest rate) markets have suggested a 73% probability of this happening (up from 53% the previous week).
There is some cooling in the labour market. Unemployment recently rose from 4.1% to 4.3%, and revisions data from the Bureau of Labour Statistics have shown a gap of 818K jobs missing.
Watch out for the upcoming initial jobless claims this week. These are often a precursor to the new unemployment rate released at the start of the month.
The DXY chart aligns perfectly with the fundamentals, testing a major support area (100.617) on the daily chart. Meanwhile, the key resistance is far away at 107.348 and will likely remain untouched for some time.
Long-term outlook: bearish.
Markets anticipate at least two rate cuts before the year ends. Weakened jobs data is another bearish driver for the dollar.
Only geopolitical risks, bond market selling, and interest rate differentials can affect this sentiment.
Euro (EUR)
Short-term outlook: weak bearish.
The latest EU retail sales indicate that the consumer is taking some time to recover from the inflation shock.
The European Central Bank (ECB) has stressed that it is data-dependent. For fundamental analysts, this means that certain economic data, like employment data, may boost the euro.
While also indicating that their interest rate meeting is 'wide open,' markets see a 95% chance of a cut next month (up from 87% last week).
Interestingly, the chart tells a different story. After breaking the last major resistance, the next target is 1.12757. Meanwhile, the key support area lies far below at 1.06494.
Long-term outlook: weak bearish.
The ECB hasn't committed to a specific future path with the interest rate. They are data-dependent, meaning data around inflation, growth, and wage improvement can lift the euro.
British pound (GBP)
Short-term outlook: bearish.
The Bank of England (BoE) cut the interest rate by 25 basis points at the start of this month. However, they remain data-dependent and have no set future path. STIR markets are currently pricing in an additional two cuts for the remainder of 2024.
The central bank's current key theme is fighting persistent inflation in the United Kingdom. Any future failures here would likely weaken the GBP.
As with the euro, the British pound has been saved by dollar weakness on the charts. Just as we thought the major resistance (1.31424) was too far, it has surpassed this level. However, considering its significance, we should only know how convincing the break is during the week.
On the other hand, the nearest key support is far away at 1.26156.
Long-term outlook: weak bearish.
The interest rate is the chief bearish driver for the pound. However, STIR markets predict a rate hold next month. Furthermore, two-way risks remain based on upcoming economic data (e.g., inflation, labour, economic growth).
Japanese yen (JPY)
Short-term outlook: weak bullish.
The Bank of Japan’s (BoJ) recent decision to hike the interest rate is bullish for the yen. However, STIR markets expect a hold (100% probability, from 95% last week) at the next meeting but a hike at the start of next year.
After cooling down last week, USD/JPY looks to have resumed its downtrend, confirming the poor dollar.
The major support level to watch is 140.252. Meanwhile, the major resistance (at 161.950) is too far for traders to worry about.
Long-term outlook: weak bullish.
In addition to the recent rate hike, other bullish catalysts for the yen include lower US Treasury yields.
The Bank of Japan is actively intervening in the forex markets, contributing to the JPY's upside last month. However, having moved quite a distance, a further retracement is imminent.
Australian dollar (AUD)
Short-term outlook: weak bullish.
The Reserve Bank of Australia (RBA) unsurprisingly kept the interest rate unchanged not long ago to keep the fight against persistent inflation rate. Based on their language, a hike isn't out of the question this year.
Like many currencies, the Aussie remains data-sensitive, whether we look at economic growth, labour, or inflation going forward. The recent rise in China's share prices, which correlates with the Aussie, has been positive for the currency. Still, there is doubt over the longevity of this run.
Diarise Wednesday's upcoming CPI (Consumer Price Index) reading for the Aussie.
As further proof of the short-term outlook, the Aussie market has risen noticeably. In our last report, it was only 130 pips away from the nearest major resistance at 0.67986. It is now right onto this level. So, it will be interesting to see how it reacts this week.
Meanwhile, the major support level is down at 0.63484.
Long-term outlook: weak bullish.
The RBA remains hawkish as per last week's meeting, focusing on core inflation. Overall, it's crucial to be data-dependent with the Aussie, with recent labour data keeping the bullish script alive.
However, the Australian dollar is pro-cyclical, so it is exposed to slow economic growth in other countries.
New Zealand dollar (NZD)
Short-term outlook: bearish.
The New Zealand dollar is the only currency we have recently updated the short-term outlook (from neutral to bearish). This is mainly due to the central bank dropping the Kiwi's interest rate from 5.50% to 5.25% two weeks ago.
Lower-revised cash rate projections also hint at the potential for further cuts in the near future.
Similar to its closest relative, AUD, the Kiwi is near the major resistance at 0.62220. Only time will tell if it can break or pull back in the coming days. So, this remains the focal point, while the major support is at 0.58498, an area which it is unlikely to test soon.
Long-term outlook: weak bearish.
In its latest meeting, the central bank's dovish stance (where it cut the interest rate) puts the Kiwi in a 'bearish bracket.'
However, as a risk-sensitive currency like the Aussie, any growth data in China could trigger bullishness for NZD. As with its counterpart, traders should be data-dependent.
Canadian dollar (CAD)
Short-term outlook: bearish.
The ongoing mortgage stress in Canada has forced the Bank of Canada (BoC) to be dovish, the first major bearish catalyst. With a rate cut last month, STIR markets have raised the probability to over 90% of the same next month.
Watch out for the upcoming data on the CAD inflation rate and retail sales this week.
Thanks to dollar weakness, the CAD continues to strengthen mildly. It now looks to test the next major support target (after breaking one at 1.35888) at 1.34780, while the major resistance is far ahead at 1.39468.
Long-term outlook: weak bearish.
Expectations of a rate cut remain the focal point, with the BoC governor Macklem himself saying it's reasonable to expect more cuts in the future. Moreover, STIR markets have priced in an additional cut sometime this year (aside from the one for next month).
The mortgage stress remains a major factor in this interest rate policy, and the BoC will have to cut rates to alleviate it.
However, encouraging oil prices, along with data improvements (the name of the game) may save the Canadian dollar's blushes.
Swiss franc (CHF)
Short-term outlook: bearish.
STIR markets forecast a rate cut in September (an 82% chance) and December this year.
Secondly, SNB expects a moderate improvement in inflation, GDP (Gross Domestic Product), and unemployment to rise slightly in the near term.
However, the Swiss franc can strengthen during geopolitical tensions like the Middle East crisis.
After a notable retracement, USD/CHF is looking to test the support area at 0.83326. Meanwhile, the major resistance level is far higher at 0.92244.
Long-term outlook: weak bearish.
The expected rate cut in the next SNB meetings for 2024 is the main bearish driver. However, the SNB's chairperson, Thomas Jordan, expressed that "appreciation of the Swiss Franc has an impact on monetary policy." This means that potential intervention by the central bank can go either way.
Conclusion
The fundamental outlooks of each currency have remained unchanged from the previous time. However, as expected, prepare for anything on the charts while aligning this activity with our expert fundamental summaries.
