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GBP/USD pressured as USD rises and UK rate outlook weighs.In-Depth: The GBP/USD pair experienced renewed selling pressure, slipping below the mid-1.2400s during the European session and approaching a three-week low. The US Dollar (USD) continued its upward trend for the third consecutive day, reaching a nearly two-month high, which weighed heavily on the major currency pair. Optimism surrounding the potential lifting of the US debt ceiling and expectations of a prolonged period of higher interest rates from the Federal Reserve (Fed) provided support to the Greenback. US President Joe Biden and top congressional Republican Kevin McCarthy expressed their determination to reach a deal soon to raise the federal government's debt ceiling of $31.4 trillion. An agreement needs to be reached and passed by both chambers of Congress before the federal government faces a potential shortage of funds to meet its obligations by June 1. Furthermore, hawkish comments from several Fed officials pushed back against speculations of interest rate cuts later in the year, supporting elevated US Treasury bond yields and bolstering the US Dollar. Conversely, the British Pound (GBP) was weighed down by expectations of fewer rate increases by the Bank of England (BoE) in the coming months to address inflation. This speculation was fueled by underwhelming UK jobs data released earlier in the week and less hawkish remarks from BoE Governor Andrew Bailey. During a speech at the British Chamber of Commerce Conference, Bailey stated that UK inflation is expected to decrease significantly in the upcoming months. However, he reiterated the BoE's commitment to raising interest rates to bring inflation back to the 2% target. Considering the fundamental factors at play, the GBP/USD pair is currently biased towards further downside movement. Any attempted recovery could be viewed as an opportunity for bearish traders and may fizzle out quickly. Market participants are now closely monitoring the US economic docket, including Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Existing Home Sales data. Additionally, speeches from influential FOMC members, developments in US bond yields, and progress in US debt-limit negotiations will drive USD demand and provide fresh impetus to the major currency pair. From a technical standpoint, the GBP/USD rebounded at the predicted 61.8% area and continues its bearish rally based on the identified AB=CD pattern. Our outlook remains bearish.
by FOREXN1
25
AUD/USD Dips on Dollar Strength and Mixed Data - FundamentalThe AUD/USD pair had a negative performance at the beginning of Tuesday, following a slow start to the week. It faced selling pressure, reversing the earlier rebound during the mid-Asian session and recording slight losses around 0.6650 at the current time. This decline can be attributed to the stronger US Dollar, despite the lack of a deal between US President Joe Biden and House Speaker Kevin McCarthy to avoid the debt ceiling expiration. The US Dollar Index (DXY) has been gradually rising and is currently around 103.30. Meanwhile, Australia's preliminary S&P Global PMI readings for May showed a mixed picture. The Manufacturing gauge came in at 48.0, slightly higher than the expected 47.3, while the Services PMI decreased to 51.8 from the previous reading of 53.7 and the forecast of 48.9. The Composite PMI for Australia stood at 51.2, down from April's figure of 53.0. Additionally, the tensions between the West and Russia, as well as conflicts between the G7 and China, are weighing on the AUD/USD pair. Russia's strengthening ties with China, including the potential increase in trade turnover to $200 billion, has strained relations with the West. Given Australia's relationship with China, such developments have a negative impact on AUD/USD. Furthermore, the increasing likelihood of a 0.25% interest rate hike by the Federal Reserve in June, as well as no rate cuts expected in 2023, compared to the Reserve Bank of Australia's dovish stance, also contribute to the bearish sentiment for AUD/USD. In the broader market, S&P500 Futures are showing a slight uptrend near 4,220, rising for the second consecutive day after pulling back from a nine-month high on Friday. The positive performance of US stock Futures and Wall Street is causing a pause in the five-day uptrend of the benchmark 10-year and two-year US Treasury bond yields, which had reached their highest levels in two months. Looking ahead, the initial readings of S&P Global Purchasing Managers Indexes (PMIs) for May in the US will be important for AUD/USD traders to determine clear directions. Additionally, the ongoing US debt ceiling negotiations and discussions by the Federal Reserve will be significant factors to monitor. From a technical perspective, the price has experienced a rebound at the 61.8% Fibonacci level within a bearish channel, and there seems to be a formation of an AB=CD pattern, indicating a potential target point around the 1.272% Fibonacci extension. Overall, the outlook suggests a continuation of the bearish trend for AUD/USD.
by FOREXN1
25
NZD/USD Nears Completion of AB=CD PatternThe NZD/USD is experiencing significant selling pressure in response to the unexpected dovish shift by the Reserve Bank of New Zealand (RBNZ). Meanwhile, the USD remains strong, nearing a two-month high, which further contributes to the sharp decline throughout the day. The current fundamental landscape favors bearish traders as market focus shifts to the release of the FOMC minutes. The NZD/USD pair continues its downward trajectory after a significant drop from the 0.6300 level in the previous day. This selling pressure intensified following the RBNZ's policy announcement on Wednesday. As a result, spot prices have reached a nearly one-month low, around the 0.6130 region during the early part of the European session. The New Zealand dollar experienced a widespread decline as the RBNZ surprised the markets by signaling the end of its most aggressive hiking cycle since 1999. It's worth noting that the central bank had raised its official cash rate (OCR) by 25 basis points earlier in the week, bringing it to 5.5%, the highest level since the 2008 financial crisis. In the accompanying monetary policy statement, the RBNZ forecasted that the official cash rate would peak at its current level. This, coupled with the strength of the US dollar, has prompted aggressive selling in the NZD/USD pair. The USD Index (DXY), which tracks the performance of the US dollar against a basket of currencies, remains steady near a two-month high reached on Tuesday. This is due to expectations that the Federal Reserve (Fed) will maintain higher interest rates for a longer period. In fact, the market is currently pricing in the possibility of another 25 basis points rate hike in June, a sentiment reinforced by recent hawkish comments from several Fed officials. Additionally, concerns about global economic growth slowing down further benefit the safe-haven appeal of the US dollar and weigh on the risk-sensitive New Zealand dollar. On the other hand, USD bulls seem hesitant and are awaiting the release of the FOMC meeting minutes, scheduled for later during the US session. These minutes will be closely analyzed for insights into the Fed's rate-hike trajectory, which will impact the USD in the near term and provide fresh direction for the NZD/USD pair. However, the unexpected dovish shift by the RBNZ suggests that the path of least resistance for spot prices is downward. As a result, any attempted recovery in the pair might be seen as an opportunity to sell and may quickly fizzle out. From a technical perspective, the NZD/USD pair is nearing completion of a potential AB=CD pattern, and we anticipate a resumption of price movement with a bullish impulse. However, if the price continues to decline, an alternative scenario may come into play.
by FOREXN1
6
EUR/GBP:Economic Outlook and Forex Analysis: PMI Data and Trend.In May, the Preliminary French S&P Global Manufacturing PMI is expected to be 46.0, while the Preliminary French S&P Global Services PMI is predicted to be 54.2, and the Preliminary French S&P Global Composite PMI is anticipated to be 52.3. Traders can compare these figures to the April data, which reported the French S&P Global Manufacturing PMI at 45.6, the French S&P Global Services PMI at 54.6, and the French S&P Global Composite PMI at 52.4. Similarly, for Germany, the Preliminary German S&P Global Manufacturing PMI for May is forecasted at 45.0, the Preliminary German S&P Global Services PMI at 55.5, and the Preliminary German S&P Global Composite PMI at 53.5. Traders can refer to the April figures of the German S&P Global Manufacturing PMI (44.5), the German S&P Global Services PMI (56.0), and the German S&P Global Composite PMI (54.2) for comparison. Moving to the Eurozone, the Preliminary Eurozone S&P Global Manufacturing PMI for May is expected to be 46.2, the Preliminary Eurozone S&P Global Services PMI at 55.6, and the Preliminary Eurozone S&P Global Composite PMI at 53.7. These figures can be compared to the April data for the Eurozone: the S&P Global Manufacturing PMI (48.5), the S&P Global Services PMI (56.2), and the S&P Global Composite PMI (54.1). In terms of the Eurozone's Current Account (s.a) for March, it is predicted to be -€20.2B. Traders can compare this to the February figure, which was reported as €24.3B. Shifting focus to the UK, the predicted UK Public Sector Net Borrowing for April is £17.50B, while the UK Public Sector Net Borrowing excluding Banking Groups is expected to be -£0.57B. These figures can be compared to the March data, which reported UK Public Sector Net Borrowing at £20.71B and UK Public Sector Net Borrowing excluding Banking Groups at £18.87B. Finally, the Preliminary UK S&P Global Manufacturing PMI for May is forecasted at 48.0, the Preliminary UK S&P Global Services PMI at 55.5, and the Preliminary UK S&P Global Composite PMI at 54.6. Traders can refer to the April figures of the UK S&P Global Manufacturing PMI (47.8), the Preliminary UK S&P Global Services PMI (55.9), and the Preliminary UK S&P Global Composite PMI (54.9) for comparison. Considering the EUR/GBP currency pair the question remains whether the bulls will overpower the bears and exert pressure on the EUR/GBP towards its horizontal resistance area.
by FOREXN1
3
EUR/JPY Extends Upside Momentum, Aims for 2023 Highs above 150EUR/JPY continues its upward trajectory after a minor retreat on Friday, remaining below the 150.00 level at the start of the week. A successful breach of the key psychological barrier at 150.00 could pave the way for a potential test of the 2023 high at 151.61. From a technical perspective, EUR/JPY demonstrates robust bullish momentum across various timeframes, indicating a favorable environment for further extension of long positions.
Long
by FOREXN1
3
EUR/USD: Fundamental Analysis and Potential PullbackAt the start of the European session, the risk sentiment remains subdued as Asian equities trade with mixed results, failing to capitalize on the previous rally in Wall Street. The US Dollar, on the other hand, is consolidating its weekly gains near two-month highs, mirroring the lackluster performance of US Treasury yields across the yield curve. Optimism surrounding a potential US debt ceiling deal was dampened by a Reuters report that highlighted concerns from a small but influential Republican faction. They warned that they could block any agreement to raise the $31.4 trillion debt ceiling in the House of Representatives unless the accord includes substantial federal spending cuts. Furthermore, fresh tensions between the US and China over Taiwan are keeping traders on edge. The US Trade Representative's office announced a partial agreement between the US and Taiwan on their "21st Century" trade initiative, covering customs, border procedures, regulatory practices, and small businesses. This development clouds the outlook for a scheduled visit to the US by a Chinese commerce official next week. However, US stock futures are showing a 0.15% increase, as market participants maintain hope for a debt ceiling deal by Sunday when President Biden and House Minority Leader Kevin McCarthy resume talks. Despite the overall risk-on sentiment in the market, the US Dollar has extended its upward trend for the past three days. This is mainly due to hawkish comments from US Federal Reserve (Fed) policymakers and increasing expectations of a 25 basis points (bps) interest rate hike in June. Market expectations for a June rate hike have risen to a 36% probability, compared to a mere 10% chance at the beginning of the week. Dallas Fed President Lorie Logan stated that current data does not support skipping an interest rate hike in the upcoming June meeting. Fed Governor Philip Jefferson highlighted that inflation remains elevated, while St. Louis Fed President James Bullard advocated for higher interest rates, viewing them as insurance against inflationary pressures. Looking ahead, market focus will be on updates regarding the US debt ceiling and speeches by central bank officials, as there are no major economic data releases scheduled on both sides of the Atlantic. The speech by Fed Chair Jerome Powell will receive particular attention, while end-of-the-week flows are expected to influence market dynamics. EUR/USD is experiencing renewed buying interest, resuming its rebound towards the 1.0800 level in early European trading. This comes as the US Dollar corrects in tandem with the pullback in US Treasury bond yields. Eurostoxx futures are up 0.05% at the moment. According to sources cited by Bloomberg, the European Central Bank (ECB) is reportedly intensifying its scrutiny of bank liquidity and may consider raising liquidity requirements. From a technical perspective, there is a possibility of a pullback today around the previous resistance level, particularly at the 38.2% and 50% Fibonacci retracement levels. Only in this scenario would we consider a new short setup.
by FOREXN1
22
NZD/CAD:Potential Bullish Pullback Expected based on FundamentalAccording to economists, inflation in New Zealand is expected to remain high for an extended period, with increased government spending being a significant factor. While there are no current predictions for the next quarterly inflation figures due in July, the government is focused on maintaining fiscal sustainability and keeping inflation under control. As a result, the Reserve Bank of New Zealand (RBNZ) is likely to continue its hard-line approach to monetary policy by raising interest rates, which could have a positive impact on the New Zealand dollar. From a technical perspective, the NZD/CAD price is currently within a bullish channel and is expected to retest the lower side of the dynamic trendline of support, which coincides with the 61.8% Fibonacci level. The RSI is also in oversold territory. Considering these technical indicators along with the fundamental aspects, our forecast suggests a possible pullback towards the bullish main trend, as seen on the daily charts.
by FOREXN1
17
USD/CAD Approaching Crucial Resistance at 1.3650In the Asian session, the USD/CAD pair is making headway towards the significant resistance level of 1.3650. The Canadian dollar is gaining momentum after a period of reduced volatility, while the US Dollar Index (DXY) is on the brink of completing its nominal correction. The current price of USD/CAD has now reached a confluence zone, where the Fibonacci Area of reversal and the Dynamic trendline that have previously acted as resistance intersect. Our stance on USD/CAD remains bearish, and we anticipate a reversal from this area.
Short
by FOREXN1
6
GBP/JPY Dips on Surprise Jump in Japan's Inflation - FundamentalThe GBP/JPY pair experienced a significant decline below the 172.00 level, triggered by an unexpected surge in inflation rates in Japan. This sudden rise in Japan's inflation numbers, exceeding projections, is not anticipated to have an impact on the Bank of Japan's (BoJ) prolonged ultra-dovish policy stance. Market participants do not expect the Bank of England (BoE) to bring inflation down by half before the year ends. During the Asian session, the GBP/JPY pair suffered a sharp drop after failing to sustain levels above the immediate resistance at 172.00. This downward pressure on the cross was the result of the Statistics Bureau of Japan reporting higher-than-expected inflation data for April. The national headline Consumer Price Index (CPI) rose to 3.5% from the previous release of 3.2%, surpassing the consensus estimate of a slowdown to 2.5%. Meanwhile, the core CPI, which excludes food and energy prices, accelerated to 4.1% compared to the consensus of 3.4% and the previous release of 3.8%. The publication of inflation numbers exceeding projections brings some relief to Bank of Japan (BoJ) policymakers, but it does not alter their prolonged ultra-dovish policy stance. BoJ's Kazuo Ueda has already indicated that inflation projections are softening, and the central bank is committed to taking necessary measures to maintain inflation steadily above the 2% target. Meanwhile, the Pound Sterling has remained resilient in recent trading sessions due to the lack of promising signs of inflation deceleration in the United Kingdom. Investors are speculating that the Bank of England (BoE) will not be able to reduce inflation by half before the end of the year. BoE Governor Andrew Bailey has already acknowledged underestimating the strength and persistence of inflation. Additionally, UK Finance Minister Jeremy Hunt has pledged a reduction in the tax burden on households, which is expected to further stimulate retail demand. The UK Office for National Statistics (ONS) reported on Thursday that 18% of UK firms are planning to pass on the impact of higher input prices and increased labor costs to consumers, compared to 23% in the previous survey. From a technical perspective, the pair rebounded from the previous resistance level, and our analysis suggests a potential pullback between the 38.2% Fibonacci level and the 61.8% level. This pullback could lead to a fresh bullish impulse aligning with the overall bullish trend observed across higher timeframes.
by FOREXN1
14
EUR/AUD: Fundamental Analysis and Anticipated Technical SetupEUR/AUD Continues Bearish Momentum as Mixed ECB Comments and Australian Wage Data Impact Sentiment The EUR/AUD pair remains within a bearish momentum, with the price consolidating in recent hours and forming a bearish triangle pattern that could potentially trigger a new bearish setup. The Euro's demand is undermined by mixed comments from European Central Bank (ECB) officials. Vice Bank of Spain's Governor, Pablo Hernandez de Cos, expressed concerns on Wednesday about the persistence of higher inflation, suggesting that it could slow down the recovery and potentially lead to further tightening measures in the euro area. On the Australian side, recent data revealed that the Wage Price Index rose by 0.8% quarterly during the first quarter, slightly below the market consensus of 0.9%. However, the annual rate climbed to 3.7%, reaching the highest level since September 2012. While labor costs play a crucial role for the Reserve Bank of Australia (RBA), it's important to note that the Q1 data alone may not be sufficient to drive a decision towards a rate hike. Overall, the combination of mixed ECB comments and the Australian wage data adds to the sentiment favoring a continued bearish outlook for the EUR/AUD pair.
by FOREXN1
7
GBP/USD Extends Decline as US Dollar Strengthens - FUNDAMENTALDuring the European trading hours, GBP/USD is experiencing a drop towards the 1.2400 level after facing rejection just shy of 1.2500. Despite a mixed market mood, the US Dollar is holding onto its recovery gains, exerting downward pressure on the pair. Traders are eagerly awaiting the testimony of Bank of England Governor Andrew Bailey, as it could provide fresh impetus for trading. GBP/USD has continued its downward slide mid-week, reaching its lowest level since late April near 1.2420. The pair's bearish outlook remains intact in the short term, with sellers likely to dominate the market as long as the 1.2500 level acts as resistance. The US Dollar has benefited from risk aversion on Tuesday, putting GBP/USD on the defensive. Although recent headlines suggest that a deal to raise the US debt ceiling could be reached by the end of the week, market caution prevails on Wednesday. According to a report from the Wall Street Journal, House Democrats are planning to collect signatures for a "discharge petition to raise the debt ceiling." In the European session, the UK's FTSE 100 Index is trading flat, while US stock index futures show mixed performance. Meanwhile, UK Finance Minister Jeremy Hunt expressed full support for the Bank of England's policy decision and acknowledged that there is no automatic solution to bring down inflation. However, these comments failed to generate demand for Pound Sterling. In the latter half of the day, market participants will closely watch the release of Housing Starts and Building Permits data from the US for potential market-moving catalysts. If these data remind the market of the negative impact of the Federal Reserve's tight policy on the real estate sector, the US Dollar could weaken, potentially allowing GBP/USD to stage a rebound. It is also worth noting that the valuation of the US Dollar will continue to be influenced by the overall risk sentiment during the American session. A further decline in Wall Street's main indexes would support the US Dollar, while the opposite could weaken the currency.
by FOREXN1
16
EUR/USD Continues Decline Amid Data Releases and C.Bank OutlooksEUR/USD Extends Decline as Data Releases and Central Bank Outlooks Influence Market Sentiment In the Eurozone, New Car Registrations witnessed a notable increase of 17.2% in the year up to April, indicating positive growth in the automotive sector. Additionally, final inflation figures for April in the broader Euroland are eagerly awaited later in the morning, which will provide further insights into the region's economic performance. Turning our attention to the US, the release of weekly Mortgage Applications will take the spotlight, followed by Housing Starts and Building Permits data. These indicators will shed light on the health of the US housing market and its potential impact on the broader economy. As EUR/USD continues its decline, approaching the key support level of 1.0800 on Wednesday, market participants are closely monitoring the dynamics between the euro and the US dollar. The euro's value is expected to be influenced by the actions and statements of the Federal Reserve and the European Central Bank (ECB) regarding their respective monetary policy plans, particularly related to interest rate adjustments. While the ECB has maintained a hawkish stance, suggesting the possibility of further rate hikes, there are concerns about the loss of momentum in economic fundamentals in the region. This creates a juxtaposition between the ECB's outlook and the current economic conditions. Key events to watch in the Eurozone this week include the release of the EMU Final Inflation Rate on Wednesday, which will provide crucial information on price stability within the euro area. Important factors lingering in the background include the continuation of the ECB's hiking cycle in June and July (with a possibility of September), the impact of the ongoing Russia-Ukraine conflict on growth prospects and inflation outlook in the region, as well as the risks of inflation becoming entrenched. These developments will shape the outlook for the euro and influence the trajectory of EUR/USD in the coming days.
by FOREXN1
24
EUR/USD Reacts to US Dollar Strength and ECB Tone | FUNDAMENTALThe EUR/USD pair experienced a pullback from its lowest levels in six weeks as the US Dollar gained momentum, reaching nearly a two-month high. The Euro's decline was influenced by softer EU inflation data and a downbeat tone from ECB's de Cos. Meanwhile, the US Dollar benefited from optimism surrounding a potential extension of the US debt limit and increased expectations of a June rate hike by the Federal Reserve (Fed). Market sentiment dwindled heading into the European session on Thursday, further pressuring the EUR/USD pair, which was trading near 1.0840, down 0.05% intraday. Traders expressed doubts about the ECB's hawkish bias compared to the growing likelihood of a Fed rate hike in June. Recent interest rate futures indicated a 20% probability of a 0.25% rate increase by the Fed in June, contrasting with expectations of no such actions in 2023. This hawkish sentiment was influenced by positive US economic data and hawkish comments from Fed officials. US Housing Starts for April were slightly below expectations, with figures of 1.401 million compared to the anticipated 1.4 million. Building Permits for the same month also declined, reaching 1.416 million compared to the previously revised 1.437 million. However, upbeat US Retail Sales and Industrial Production data for April supported the hawkish stance of the Fed and fueled risk appetite. Federal Reserve Bank of Chicago President Austan Goolsbee and Atlanta Fed President Raphael Bostic were among the officials who reiterated concerns about inflation and favored the EUR/USD bears. In the Eurozone, the final readings of April's inflation based on the Harmonized Index of Consumer Prices (HICP) showed a slight decrease in the monthly rate to 0.6% compared to the previous estimate of 0.7%. However, the annual forecasted increase of 7.0% was confirmed. Following the inflation data, ECB policymaker and Bank of Spain's Governor Pablo Hernandez de Cos stated in an interview that "The persistence of higher inflation would slow the recovery and would very likely lead to further tightening in the euro area." Apart from the Fed-ECB dynamics, comments from US President Joe Biden and House Speaker Kevin McCarthy reassured the markets that they would work together to avoid a catastrophic default. This boosted market sentiment and supported the US Dollar. The US Dollar Index (DXY) remained mildly bid near 102.90, marking its highest levels in seven weeks. Looking ahead, market participants are anxiously awaiting ECB President Christine Lagarde's speech and US President Biden's assurance of a budget solution by the end of Sunday. These factors, combined with second-tier US data and discussions on the US debt limit, will likely shape the direction of the EUR/USD pair in the near term.
by FOREXN1
6
USD/JPY Resumes Upside Momentum - Fundamental AnalysisThe USD/JPY pair has continued its upward trajectory following a slight correction below 136.50 during the Asian session. The focus now is on reclaiming Tuesday's high at 136.68, as the Japanese Yen struggles to gain strength despite positive Q1 Gross Domestic Product (GDP) figures. While concerns about the US debt ceiling persist, the recent release of weaker-than-expected Chinese macroeconomic data has heightened fears of a recession and dampened investor appetite for riskier assets. However, despite these challenges, the overall fundamental landscape appears to favor bullish traders, indicating that the path of least resistance for the USD/JPY pair remains to the upside. Looking ahead, the next significant resistance zone is expected around 138.000, which could serve as a crucial level for determining further price movements.
Long
by FOREXN1
14
Bullish Momentum Continues for USD/JPY PairThe USD/JPY pair has been on a steady rise, building on its overnight goodish rebound from the 133.75 region, which was a one-week low. For the second successive day on Friday, it has gained some follow-through traction, maintaining its bid tone through the early part of the European session and currently placed around the 134.70 region, up over 0.20% for the day. The equity markets have a generally positive tone, and the Bank of Japan's (BoJ) dovish outlook is undermining the safe-haven Japanese Yen (JPY) and turning out to be a key factor acting as a tailwind for the USD/JPY pair. The BoJ Governor Kazuo Ueda, speaking in parliament earlier this week, said that it was too early to discuss specific plans for an exit from the massive stimulus programme. In contrast, the US Dollar (USD) reverses a modest intraday dip and stands tall near a one-and-half-week high touched on Thursday, which lends additional support to the USD/JPY pair. The uncertainty over the Federal Reserve's (Fed) next policy move, along with a modest uptick in the US Treasury bond yields, continue to underpin the Greenback, though the US debt ceiling concerns act as a headwind. The US CPI report released earlier this week pointed to signs of easing inflationary pressure and reaffirmed market expectations about an imminent pause in the Fed's year-long rate-hiking cycle. However, investors remain divided over the possibility of rate cuts later this year. This, in turn, holds back the USD bulls from placing aggressive bets and might keep a lid on any meaningful upside for the USD/JPY pair, at least for now. Market participants now look forward to the release of the Preliminary Michigan Consumer Sentiment Index from the US, due later during the early North American session. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the USD/JPY pair. Apart from this, traders will take cues from the broader risk sentiment to grab short-term opportunities on the last day of the week. From a technical perspective, the price of the USD/JPY pair may reach the 137.000 area or even go up to 138.000 before seeing a retracement. The current bullish trend of the pair seems to be supported by the positive market sentiment and the dovish stance of the Bank of Japan, as well as the uncertainty over the Fed's next policy move. However, the possibility of rate cuts later this year and the US debt ceiling concerns may limit the USD bulls' aggression, preventing a significant upside for the USD/JPY pair. Overall, the short-term opportunities in the USD/JPY pair will depend on the broader market sentiment and the release of key economic indicators.
by FOREXN1
10
GBP/USD Dips as USD Strengthens | Fundamental AnalysisIn the early European session, GBP/USD is declining towards 1.2400. The British pound is under pressure due to increased demand for the US Dollar, as investors assess US debt ceiling discussions alongside mid-tier US housing data. The US Dollar (USD) has gained momentum and reached a five-week high following hawkish comments from Cleveland Fed President Loretta Mester. Mester's remarks signaled that interest rates are not restrictive enough and that the central bank is not yet inclined to hold rates steady. This led to a significant rise in US Treasury bond yields overnight. Additionally, a general decline in equity markets, reflecting a risk-off sentiment, has further boosted the Greenback's safe-haven appeal against the British pound. The release of weaker Chinese macro data on Tuesday has also contributed to concerns about a fragile post-COVID recovery in the world's second-largest economy, fueling recession fears. Combined with ongoing uncertainties surrounding the federal government's borrowing limit, this has dampened investors' appetite for riskier assets. Despite mixed US Retail Sales figures, which had limited impact on the market, USD bulls remain unfazed. Market expectations are still aligned with the Federal Reserve's hawkish stance, anticipating higher interest rates for an extended period.
Short
by FOREXN1
1
EUR/USD Corrects Upwards as Market Sentiment ImprovesEUR/USD has opened the new trading week on a positive note, showing some signs of recovery after last week's losses. The currency pair managed to erase a small portion of its previous week's losses, giving hope to buyers that it could extend its correction and rally further. However, the previous week was not kind to the EUR/USD as the broad-based strength of the US Dollar amid risk aversion weighed heavily on the pair. As a result, the pair hit its lowest level in a month below 1.0850 on Friday, leaving many investors uncertain about its future direction. Early on Monday, the Euro Stoxx 50 has been trading in positive territory, and US stock index futures have also risen between 0.25% and 0.35%. This reflects a more optimistic market sentiment, which could be a good sign for the EUR/USD as well. As for the technical analysis, the next level to watch out for is the area between the 50% and 61.8% Fibonacci retracement levels, where the price may experience a pullback. The area of 1.09000 is where the 61.8% Fibonacci level is placed, making it one of the most important levels to watch out for. In conclusion, the EUR/USD is showing some promising signs of recovery after last week's losses. However, the broader market sentiment and technical indicators suggest that there could be some resistance ahead before the pair can gain any significant momentum.
by FOREXN1
28
NZD/USD Drops on Weak Chinese Data, Bearish Bias IntactDisappointing Chinese Economic Data Pushes NZD/USD Below 0.6250, Confirming Bearish Bias The NZD/USD pair experienced a significant drop below the key level of 0.6250 following the release of weaker-than-anticipated annual Retail Sales data by the National Bureau of Statistics of China. The data revealed that the economic expansion in April stood at 18.4%, falling short of the forecasted 21.0%, although it did surpass the previous release of 10.6%. Additionally, the annual Industrial Production data for April landed within the estimated range of 10.9% but exceeded the former release of 3.9%, registering a growth rate of 5.6%. This slower growth in both retail demand and industrial production suggests that the Chinese economy is making progress in the right direction following the easing of full lockdown measures. From a technical perspective, the NZD/USD pair has initiated a new bearish impulse aligned with the prevailing downtrend. This downward movement was triggered when the price reached the 38.2% Fibonacci continuation level. As a result, our bias for the NZD/USD pair remains bearish, indicating a potential further decline in the near future.
by FOREXN1
13
EUR/JPY:Overbought Conditions and Divergence -Potential PullbackEUR/JPY exhibits strong upward momentum as it recovers above the 148.00 level early in the week. However, the current price is encountering resistance at the 61.8% Fibonacci area, where an overlap between overbought conditions and divergence on the RSI suggests a potential pullback in line with the prevailing trend. Should the price surpass the A leg of the potential AB=CD pattern, it could initiate a fresh bullish impulse.
by FOREXN1
18
GBP/USD retreats ahead of BoE policy announcement - Long SetupEarly on Thursday, GBP/USD retreated below 1.2600, losing its bullish momentum after reaching a one-year high at 1.2680 on Wednesday. The upcoming Bank of England (BoE) policy announcements are now in focus, with the pair's near-term technical outlook pointing to a bearish tilt. The US Dollar (USD) came under selling pressure on Wednesday after the Consumer Price Index (CPI) data showed a rise of 4.9% YoY in April, below the market expectation of 5%. However, the cautious market sentiment did not allow GBP/USD to sustain its upward momentum. The BoE is expected to increase its key rate by 25 basis points to 4.5% in the May policy meeting, though inflation remains stubbornly high. If two external members of the Monetary Policy Committee (MPC) vote in favor of keeping the policy rate unchanged, it could be seen as a hawkish surprise, while the GBP could gain strength if the policy statement shows some members voted for a 50 bps rate increase. Revised projections will also be closely watched, and if the BoE expects inflation to fall rapidly before summer, it could signal the end of the tightening cycle, putting pressure on the GBP. If Governor Andrew Bailey leaves the door open for additional rate hikes, the GBP could regain its strength. The technical analysis shows that the price has reached the 61.8% Fibonacci level at 1.2500 inside a bullish channel, providing a good opportunity for traders to take a long position. The upcoming BoE event is likely to be the primary driver of GBP/USD's action, though the April Producer Price Index (PPI) and weekly Initial Jobless Claims data will also feature on the US economic docket later in the day.
by FOREXN1
14
AUD/USD: Global Economic Slowdown Putting Pressure on AUDOn Thursday, global economic slowdown concerns resurfaced after the release of mixed Chinese inflation figures and a weaker US labor market report. These developments have put downward pressure on the risk-sensitive Australian dollar (AUD). In contrast, the US dollar (USD) is consolidating the previous day's gains, reaching over a one-week high and drawing support from a slight increase in US Treasury bond yields. This added strength in the USD is contributing to further downward pressure on the AUD/USD pair. However, the downside for the pair seems limited for now. The uncertainty surrounding the Federal Reserve's (Fed) next policy move is preventing USD bulls from making aggressive bets. While the US CPI report released earlier this week indicated some signs of easing inflationary pressure, investors are still divided over the possibility of rate cuts later this year. This situation, combined with a generally positive tone in equity markets, is keeping a lid on further gains for the safe-haven USD and lending support to the AUD/USD pair. Moreover, the hawkish outlook of the Reserve Bank of Australia (RBA), which suggests the need for further tightening of monetary policy to ensure inflation returns to its target within a reasonable timeframe, adds a note of caution for bearish traders. Nevertheless, the AUD/USD pair is on track to end the week lower and to reverse a major part of its gains recorded over the past week or so.
Short
by FOREXN1
30
EUR/USD: Fundamental Analysis + Possible Next Target ABCDOn Thursday, the EUR/USD pair continued its downward trend, hitting a fresh weekly low of 1.0917 during London trading hours. Despite poor performance from government bond yields, the US Dollar gained ground due to a persistent gloomy sentiment. Prior to Wall Street's opening, the 10-year note yields fell 6 basis points to 3.36%, while the 2-year note dropped 6 bps to 3.83%. The Euro declined following comments from European Central Bank (ECB) official Joachim Nagel, who emphasized that the ECB will make decisions on a meeting-by-meeting basis, dismissing rumors of a September rate hike. In addition, the ECB's Consumer Expectations Survey revealed that consumer inflation expectations increased significantly in March, while expectations for economic growth over the next 12 months became slightly more negative. On the data front, Initial Jobless Claims in the United States (US) unexpectedly surged to 264K for the week ending May 5, much worse than the anticipated 245K. On a positive note, the Producer Price Index (PPI) rose 2.3% YoY in April, below the previous 2.7% and less than the 2.4% forecast. Compared to the previous month, the PPI saw a modest increase of 0.2%, surpassing market expectations. From a technical perspective, the completed AB=CD Pattern indicates that the D leg has reached the point 1.621 Extension, where the price may experience a reversal in this area, as seen in the previous AB=CD Pattern. Our target area for the next bullish move is around the upper side of the bearish channel at 1.09800, with a stop loss at 1.0855. That's our bullish idea.
by FOREXN1
7
GBP/USD Bulls in Control Ahead of US Inflation Data/BoE MeetingOn Tuesday, the Pound Sterling (GBP) rebounded above the 1.2600 level against the US Dollar (USD), following a slip in the Greenback as a result of slightly softer US Treasury bond yields. Traders are anticipating two significant releases that are expected to impact the GBP/USD over the next two days, namely the US Consumer Price Index (CPI) inflation data on Wednesday, and the Bank of England (BoE) policy meeting on Thursday. From a technical perspective, the GBP/USD is currently in a broadly bullish long-term uptrend. The old adage that "the trend is your friend" provides an advantage for long over short holders. The price on the H1 timeframe recently rebounded on the 61.8% Fibonacci level from the previous swing, and the stochastic indicator displays a divergence with oversold levels. Based on this analysis, our forecast is bullish.
Long
by FOREXN1
33