InvestMacro

By RoboForex Analytical Department

The USD/CAD pair ended its continuous upward trend on Friday, 26 June 2024, settling around 1.3813, signalling a potential shift towards correction.

The Bank of Canada decided to lower the interest rate from 4.75% p.a. to 4.50% p.a. at its meeting this week. Overall, the tone of the Canadian regulator’s remarks has changed. The Bank of Canada expects the economy to grow by 1.2% this year versus the previous forecast of 1.5%. Expectations for 2025 and 2026 were adjusted to 2.1% and 2.4% from 2.2% and 1.9%.

Inflation forecasts were also changed. By the end of 2024, the overall consumer price index is expected to fall to 2.6%. Inflation will be 2.4% in 2025 and 2.0% in 2026.

The Bank of Canada is confident that the state of the economy is well positioned for inflation to return to target even if economic activity improves slightly in the second half of this year.

Since 11 July, the CAD has been falling almost nonstop in tandem with the USD. It has only started to correct now that it has reached a three-month low.

USD/CAD technical analysis

On the H4 chart of USD/CAD, the market has formed a consolidation range around 1.3740 and worked off the local target of the growth wave at 1.3847 in an upward movement. Today, we expect a new consolidation range to form at the current highs. In case of a downside exit, we will consider the probability of correction to 1.3740 (test from above). In case of an upward exit, we will consider the likelihood of the trend’s continuation to 1.3892. Technically, this scenario is confirmed by the MACD indicator. Its signal line is at the maximum and is preparing for a decline.

On the USD/CAD H1 chart, the market made a downward impulse to the level of 1.3795 and a correction to the level of 1.3825. The market has practically marked the boundaries of the consolidation range. We expect the exit from this range down to the level of 1.3790. If this level is breached, we will consider the correction wave development to continue to 1.3763. The target is local. Technically, this scenario is confirmed by the Stochastic oscillator. Its signal line is under the mark of 50 and is directed strictly downwards to the level of 20.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

By RoboForex Analytical Department

GBP/USD pair is down to 1.2892 on Thursday. Selling intensified on the 18th of July. Since then, GBP has remained under pressure, although it is making attempts to stabilise.

Statistics released earlier showed that UK private sector activity improved in July. PMI data indicated that activity in the services sector expanded slightly, while in the industrial segment, it was the highest since February 2022.

The data aligned with forecasts and confirmed the positive sentiment in industrial production after Labour’s convincing election victory.

The market is watching the situation with the Bank of England interest rate. The probability of a rate reduction at the August meeting is at most 40%. The UK regulator holds a neutral view of the monetary policy structure and is unlikely to make decisions that could have a mixed effect.

Overall, GBP remains under pressure from the US Dollar, which is receiving support from various sides.

GBP/USD Technical Analysis

On the H4 chart of GBP/USD, the market has formed a consolidation range around the 1.2911 level. Today, the market broke out of this range downwards. The potential for a downside wave to 1.2777 is almost open. The target is the first one. After reaching this level, we will consider the probability of correction to 1.2911 (test from below). Technically, this scenario is confirmed by the MACD indicator. Its signal line is above the zero mark and is directed strictly downwards.

On the H1 chart of GBP/USD, a correction wave to the level of 1.2937 is performed. Today, the structure of decrease to the level of 1.2858 is formed. After working off this level, we will consider the probability of a growth link to the level of 1.2897. At this point, the correction potential will be exhausted. After the correction is over, we will consider the beginning of a new wave of decline to 1.2824 with the prospect of trend continuation to the level of 1.2777. Technically, this scenario is confirmed by the Stochastic oscillator. Its signal line is under the level of 50 and continues to decline to the level of 20.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

By RoboForex Analytical Department

The NZD/USD pair is experiencing a significant downturn, trading around 0.5996. Several factors influence this decline, including global political developments and domestic monetary policy expectations.

The recent announcement by US President Joe Biden that he will not seek re-election in 2024 has unexpectedly bolstered the US dollar. Biden’s endorsement of Vice President Kamala Harris as his successor has introduced a new dynamic into the political landscape, generally favouring the stability of the US dollar.

Simultaneously, the New Zealand dollar is weakened by the looming possibility of interest rate cuts by the Reserve Bank of New Zealand (RBNZ). Market participants increasingly expect rate reductions beginning early in August following a weaker-than-expected Q2 inflation report. This anticipation builds on the RBNZ’s July decision to maintain the official cash rate at 5.5% per annum, coupled with hints that monetary policy might be relaxed if inflation pressures abate.

Adding to the pressure, recent trade data from New Zealand showed a surplus in June, primarily due to a sharper decline in imports compared to exports, suggesting potential economic softness.

NZD/USD Technical Analysis

The NZD/USD pair has established a consolidation range around the 0.6022 level, with a breakout leading to a continuation of the downward trend. The immediate target is 0.5962, with the potential to extend towards 0.5946. The MACD indicator supports this bearish outlook, as it remains below zero and points downwards, indicating sustained selling momentum.

Resistance was found at 0.6022, and the pair is extending its decline towards 0.5962. A corrective bounce to 0.6000 might occur before resuming the downward movement towards 0.5946. The Stochastic oscillator, currently below 20, suggests a potential brief recovery to around 50 before a likely resumption of the downward trend.

Investors and traders should closely monitor these developments, especially any further political news from the US and upcoming economic data from New Zealand. These factors could significantly impact the pair’s movements in the near term.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

By RoboForex Analytical Department

The EUR/USD pair fell sharply to 1.0888, with investors speculating on the future of US interest rates and the potential implications of the upcoming presidential election, particularly as Donald Trump’s chances appear to be improving. These factors contribute to a heightened risk appetite, leading to a retreat in the USD.

As the Federal Reserve approaches its meeting at the end of the month, a quiet period will begin this Saturday, during which the Fed will make no further comments.

Concurrently, the European Central Bank (ECB) recently held its meeting, maintaining the current interest rates as anticipated. This decision aligns with recent economic indicators corroborating the ECB’s inflation forecasts, prompting a cautious approach. The ECB emphasised that the prevailing high rates are instrumental in managing the consumer price index and reiterated the necessity to maintain these rates, given the expected inflation to remain above the 2% target into 2025.

This perspective is reinforced by sustained price pressures, particularly in the services sector, highlighting ongoing inflationary concerns.

EUR/USD technical analysis

EUR/USD currency pair has developed a consolidation range around the 1.0806 level, with a breakout leading to achieving the target at 1.0946. A correction towards 1.0806 is currently anticipated, with the initial correction wave targeting 1.0880. Subsequently, a potential rebound to 1.0910 may occur before another decline to 1.0840. The MACD indicator supports this bearish outlook, indicating a downward trajectory from above zero.

The pair is forming a downward wave to 1.0880. Upon reaching this level, a rise to 1.0910 may be considered. This analysis is corroborated by the Stochastic oscillator, positioned below 20 and poised for an upward movement, suggesting a short-term recovery in the pair.

Investors and traders should monitor these developments closely, particularly any shifts in market sentiment influenced by macroeconomic data and central bank activities, which are crucial in shaping the currency dynamics in the near term.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

By RoboForex Analytical Department

The Australian dollar has stabilized against the US dollar, currently trading around 0.6738. This follows a period of decline influenced by ongoing speculations regarding the US Federal Reserve’s impending policy actions. Expectations are set for the Fed to initiate rate cuts starting in September, with an additional reduction anticipated before the year’s end.

Fed Chairman Jerome Powell recently reinforced these expectations by indicating that the regulator might not wait for inflation to hit the 2% target before reducing rates, responding to the current trajectory of the consumer price index.

Conversely, the Reserve Bank of Australia (RBA) is perceived to be trailing its international counterparts in easing monetary policy, which has contributed to the subdued performance of the AUD.

Later this week, Australia is slated to release its employment statistics. These figures are crucial as they provide a tangible measure of the labour market’s health and could potentially influence the RBA’s policy decisions moving forward.

AUD/USD technical analysis

The AUD/USD pair is currently developing a downward movement towards the 0.6703 level, which serves as a local target. Upon reaching this level, a corrective movement upwards to 0.6747 is expected, which will test this resistance from below. Following this correction, the market may resume its downward trend towards 0.6696, completing the current correction wave before potentially initiating a new upward trajectory towards 0.6811. The MACD indicator supports this outlook, with its signal line indicating a downward trend despite being above the zero mark.

On the hourly chart, the AUD/USD has established a consolidation range around the 0.6747 level. With a downward exit, the pair continues to develop a downward structure aiming for the 0.6704 level. After this target is achieved, an upward correction to retest 0.6747 is anticipated. Subsequently, a new decline towards 0.6696 may occur. The Stochastic oscillator suggests that the current upward momentum is waning, with its signal line poised to drop from above 80, indicating potential for further declines.

Investors and traders should monitor these levels closely, especially in light of forthcoming economic data from Australia, which could significantly sway market sentiment and currency valuation.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

By RoboForex Analytical Department

The Japanese yen showed significant strength against the US dollar late last week, with the USD/JPY pair currently stabilizing around 157.86. This marks the lowest level for the currency pair in nearly a month.

The yen’s recent surge is attributed to widespread market speculation regarding potential interventions by Japanese authorities. Analysts believe that Japan may have conducted two separate interventions to bolster the yen, although these could also involve large-scale position closings on exchanges, known as “stop triggers.”

Reports indicate that the Bank of Japan may have expended between 3.37 and 3.57 trillion yen ($21.18 to $22.00 billion) last Thursday alone, with Friday’s expenditures yet to be confirmed. This marks a short interval since the last currency intervention by the BOJ.

Additionally, the BOJ’s recent inquiries into bank exchange rates could have preemptively influenced market movements, sometimes seen as a precursor to formal interventions.

USD/JPY technical analysis

The USD/JPY pair is currently navigating a consolidation phase around the 158.24 level. We anticipate a potential decline to 157.05, followed by a rebound to 158.76. A subsequent drop to 154.74 is expected, which could prompt a corrective movement back to 158.24. The MACD indicator supports this bearish outlook, with its signal line positioned below zero and indicating a downward trajectory.

On the H1 chart, the USD/JPY is forming a downward wave towards 157.04. Upon reaching this level, a rise to at least 158.24 may occur, followed by another decline to 154.74. This bearish pattern is corroborated by the Stochastic oscillator, with the signal line preparing to ascend from below 20 to around 50, suggesting potential brief recoveries amid overall downward momentum.

Market participants will closely monitor upcoming releases and statements from the Japanese government and the BOJ for confirmation of these interventions and further insights into future monetary policy actions.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

By RoboForex Analytical Department

The USD/JPY pair experienced a significant drop to 159.06, driven by sharp declines following the release of unexpectedly low US inflation figures and potential interventions from Japanese authorities.

On Thursday, the pair plunged nearly 3%, prompted by US inflation data and rumours of Tokyo’s intervention to bolster the yen, which is nearing 38-year lows. Masato Kanda, Japan’s chief currency diplomat, hinted at readiness to intervene in the currency market but remained non-committal about the specific actions taken the previous evening.

Market participants are left to speculate on the nature of these moves as official data that could confirm government interventions will only be available at the end of the month. Reports from Asahi suggest that interventions did occur, while Nikkei highlighted the BoJ’s inspections of banks’ euro-yen rates, potentially escalating market tensions and supporting the yen’s strength.

USD/JPY technical analysis

The USD/JPY chart shows a second correction impulse down to 157.40. The potential for a recovery to 159.60 is noted, which would serve as a test from below. A subsequent decline to 157.22 is anticipated. This bearish outlook is supported by the MACD indicator, whose signal line is below zero, indicating a downward trend.

The H1 chart confirms the formation of a downward trajectory towards 157.22, with the immediate target of 157.40 already achieved. A rebound to 159.60 is expected, followed by another decline to the target level. The Stochastic oscillator aligns with this analysis, showing a signal line above 80 and preparing for a downward adjustment to 20, suggesting potential for further declines.

Investors and traders will closely watch further statements from Japanese officials and the forthcoming official statistics to clarify the situation, as these factors will significantly influence the yen’s trajectory in the near term.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

By RoboForex Analytical Department

The USD/JPY pair has risen to 161.65, with the market cautious ahead of today’s US consumer price index release. Despite this, the yen remains weakened by the significant interest rate differential between the Bank of Japan (BoJ) and the Federal Reserve.

Earlier this year, the BoJ abandoned its longstanding negative interest rate policy, adjusting the rate to zero. However, this adjustment has not halted the yen’s depreciation, raising concerns about the currency’s ongoing decline.

Investors eagerly await the BoJ’s meeting in July, where crucial decisions on bond purchases are expected. The outcome of this meeting could mark a significant shift in Japan’s monetary policy.

Mixed economic signals from Japan

Morning statistics from Japan showed mixed results. Core machinery orders declined by 3.2% month-on-month in May, following a 2.9% decrease the previous month. However, on an annual basis, these orders increased by 10.8%, surpassing the expected 7.2% growth, suggesting some underlying strength in the industrial sector.

USD/JPY technical analysis

The USD/JPY is establishing a consolidation range around 161.12. The price could reach up to 162.00, considered a local target within the current upward trend. Following this level, a correction to 158.80 is anticipated, which could lead to another growth phase targeting 163.30. This bullish outlook is supported technically by the MACD indicator, where the signal line is prominently above zero and oriented upward.

On the H1 chart, the pair has completed a growth structure reaching 161.79. Currently, a downward impulse to 161.47 has been observed. A continuation of this correction to 161.12 is expected, which should precede another rise to 162.00. This analysis is corroborated by the Stochastic oscillator, with the signal line poised to drop from above 80 to 20, indicating potential short-term pullbacks before further gains.

Investors and traders will closely monitor upcoming data releases and central bank communications to gauge the potential directions for both the yen and broader currency markets.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.