InvestMacro

By RoboForex Analytical Department

After three days of significant gains, the Australian dollar is retreating against its American counterpart, with the AUD/USD pair falling to 0.6573.

The US dollar has rebounded after Federal Reserve officials expressed doubts about an immediate monetary policy easing. The discussion around interest rates and the timing of their reduction has become a central topic in the market. Signals that the Fed is prepared to cut rates three times this year, making borrowing costs more affordable, have put pressure on the US dollar, allowing other currencies to recover. However, signs that the Federal Reserve is still awaiting more data before deciding have led to a rebound in the USD and a decline in overall market sentiment.

Australia’s statistical data revealed that import volumes grew by 4.8% month-over-month in February, compared to a previous increase of 1.4%. Export volumes decreased by 2.2% month-over-month, with January’s figure at 1.5%. The positive trade balance in February was the lowest in five months, primarily due to a drop in overseas shipments of iron ore.

For the third consecutive meeting, the Reserve Bank of Australia (RBA) has left the interest rate unchanged at 4.35% annually, its highest level in 12 years. Meanwhile, the RBA has omitted any mention of potential rate hikes from its comments, confident in reducing inflationary pressure. This has led to forecasts that borrowing costs in Australia may decrease later this year.

Technical analysis of AUD/USD

On the H4 chart of AUD/USD, a downward wave to 0.6480 and a correction to 0.6617 have been completed. We expect the start of a new decline to 0.6422. The first structure of the decline is forming today, targeting 0.6520. After completing this, we anticipate a consolidation range. Exiting this range downward could lead to a wave towards 0.6472, potentially extending the trend down to 0.6422. The MACD indicator, with its signal line below zero, supports this scenario, expecting new lows.

On the H1 chart of AUD/USD, a downward wave structure to 0.6520 is forming. Following this, a correction to 0.6572 is anticipated, and a decline to 0.6490, with the trend continuing to 0.6422, is expected. The Stochastic oscillator, with its signal line currently below 20 but poised to rise to 50, technically supports this scenario.

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 moved upward to 1.0844 on Thursday, marking an unexpected shift following a period of strong US dollar performance. This change in dynamics can be attributed to investors’ positive response to comments made by US Federal Reserve Chair Jerome Powell regarding the future of interest rates. Powell’s remarks led to a surge in risk appetite, resulting in the dollar’s decline.

Powell indicated that economic indicators would heavily influence the Federal Reserve’s decisions on interest rate adjustments. Traders interpreted his comments as suggesting that, given the recent modest nature of US economic data, the anticipated forecast of three rate cuts in 2024, starting in June, remains on the table. The expectation is for the Federal Reserve to reduce interest rates by 75 basis points by the year’s end, which aligns with earlier statements from the Fed. These hinted at a majority consensus among monetary policy committee members to commence rate cuts within the year, contingent on economic data.

Powell’s reaffirming the Fed’s trajectory towards lower interest rates, with specific timing depending on upcoming data, sets the stage for March’s closely watched US employment market reports. The focus will be on whether the unemployment rate has remained steady and whether there has been any deceleration in the growth of average wages.

Technical analysis of EUR/USD

On the H4 chart, the EUR/USD pair has completed a correction to 1.0783, with a narrow consolidation range now established around this level. An upward breakout from this range could lead to a continuation of the correction to 1.0847, potentially followed by a new downward wave to 1.0694. This scenario is supported by the MACD indicator, where the signal line is below zero and the histogram peaks, suggesting a potential sharp decline.

The H1 chart reveals a corrective pattern towards 1.0847, with an expected shift towards 1.0783 to commence a decline phase. A new consolidation range at these levels could lead to further correction to 1.0888 or a downward wave to 1.0694 upon a breakout. The Stochastic oscillator, positioned above 80, anticipates a significant drop to the 50 mark, potentially leading to further declines.

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 ForexTime 

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By ForexTime 

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By RoboForex Analytical Department

The EUR/USD pair has dipped to its lowest since 15 February this year following the release of encouraging data regarding the US manufacturing sector’s activity on Monday. This improvement, the first since September 2022, has bolstered the US dollar’s position.

The Institute for Supply Management (ISM) reported that the manufacturing business activity index climbed to 50.3 points in March from 47.8 in the preceding month. This rise above the crucial 50.0-point threshold, which distinguishes contraction from expansion, signals a positive development for the sector.

Key insights from the report highlight an increase in new orders, although manufacturing employment figures remained subdued. The surge in raw material prices also influenced the overall index, which might have otherwise recorded a higher reading. Importantly, this data signifies the end of the manufacturing sector’s most prolonged downturn in 16 months, a sector that constitutes approximately 10.4% of the US economy.

Further economic data revealed that the US Core Personal Consumption Expenditure (PCE) rose by 0.3% in February, slightly below the anticipated 0.4% increase. This Core PCE index, closely monitored by the Federal Reserve, suggests that the Fed may have room to adjust interest rates downwards in June 2024, given the subdued inflationary pressures.

Market expectations for the Federal Reserve’s decision in June have seen slight adjustments. CME FedWatch Tool data indicate a 66% likelihood of policy easing, a slight decrease from the prior 68% and significantly up from 57% the previous week.

Technical analysis of EUR/USD

H4 Chart Analysis: the EUR/USD pair is currently in a consolidation phase around the 1.0794 level. A downward breakout from this range could lead to a continued decline towards 1.0650. A corrective move back to 1.0794, testing from below, may follow, with potential further descent to 1.0600. This scenario is supported by the MACD indicator, which shows the signal line below zero, indicating a continued downward trend.

H1 Chart Analysis: a corrective structure has been completed at the 1.0804 level on the H1 chart. Following the news release, the market breached the 1.0777 level downwards, continuing the downward trajectory towards 1.0720. Upon completion, a potential uptick to 1.0790 (testing from below) could occur before another drop to the 1.0650 mark. The Stochastic oscillator, currently below 50, anticipates a further decline to the 20 mark, supporting the bearish outlook.

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 GBP/USD pair is currently consolidating, hovering around the 1.2631 mark. This consolidation phase follows recent reports highlighting a slowdown in the expansion plans of British businesses for workforce and wage growth, raising concerns about future economic dynamics and inflationary pressures.

A key report from the Lloyds Bank Business Barometer indicates a noticeable dip in the hiring outlook among companies. The differential between firms looking to hire and those planning cuts fell to 27% from a peak of 36% in February. This level is only slightly above the long-term average of 22%. Moreover, there has also been a marginal decline in the proportion of businesses anticipating wage increases in the next year.

Despite these trends, Bank of England (BoE) data provides a somewhat optimistic outlook, showing that British borrowers manage the high-interest environment relatively well. The incidence of problematic debt remains significantly lower than levels seen following the 2008 financial crisis, underscoring the resilience of the UK’s economic system and indicating signs of GDP recovery.

Catherine Mann, a member of the BoE’s Monetary Policy Committee, has called for a more realistic assessment of monetary policy expectations, suggesting that market predictions for substantial interest rate cuts by the BoE might be overly optimistic. Current market sentiment suggests a high probability of a rate reduction at the BoE’s August meeting.

Technical analysis of GBP/USD

The H4 chart analysis for GBP/USD shows ongoing consolidation around 1.2626. A breakout above this range could signal a potential corrective rise to 1.2700. Conversely, a move below this level may indicate a downward trend towards 1.2450 as an initial target. A potential correction to 1.2626 could follow, with a possible further decline to 1.2355. The MACD oscillator’s position below zero supports the possibility of continued downward movement.

On the H1 chart, the pair is forming a consolidation range around 1.2626, with no definitive trend. An upward breakout might lead to a corrective move towards 1.2676, while a downward breakout could signal the continuation of a decline to 1.2545 and potentially to 1.2450. The Stochastic oscillator, currently below 80 and trending downwards, aligns with the likelihood of a continued decline.

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 ForexTime

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By RoboForex Analytical Department

The AUD/USD pair is declining, reaching 0.6539 on Wednesday.

The Australian dollar is heading back to a three-week low following the release of softer-than-expected consumer price index (CPI) data from Australia.

For February 2024, inflation in Australia stood at 3.4%, unchanged from the previous report, in contrast to the anticipated slight increase to 3.5%. This marks the lowest inflation level since November 2021.

Last week, the Reserve Bank of Australia (RBA) held its meeting and decided to keep the interest rate unchanged at 4.35% annually. The rate remains at a 12-year peak, unchanged for the third consecutive meeting. The RBA’s stance has slightly shifted; the regulator no longer indicates further rate hikes, confident that inflation will ease pressure. This opens the possibility of rate reductions later in the year.

The US dollar is strengthening today amid growing expectations that the Federal Reserve will maintain interest rates high for an extended period. This contrasts with forecasts of monetary policy easing by other central banks, some of which could occur before the Fed’s actions.

Technical Analysis of AUD/USD

On the H4 chart of AUD/USD, a correction to 0.6558 has been completed. The market is continuing to develop a declining wave to 0.6486. After reaching this level, a consolidation range is expected. With a downward exit from this range, there is a potential for further decline to 0.6417. This target is local. The MACD indicator supports this scenario, with its signal line below zero and strictly directed downwards.

On the H1 chart, AUD/USD is forming a declining wave structure towards 0.6486. After reaching this level, a corrective phase to 0.6533 may occur, followed by a decline to 0.6470, with the potential to continue the trend towards 0.6417. The Stochastic oscillator confirms this scenario, with its signal line above 80 and preparing for a decline to 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 USD/JPY pair stabilised around 151.35 by Tuesday, not far from its recent peaks, as the weakness of the Japanese yen has prompted verbal interventions from Japanese authorities.

Japan’s Finance Minister, Shunichi Suzuki, mentioned that measures to normalise the yen are quite likely. He cited excessive volatility as increasing uncertainty for the country’s trading partners and creating adverse conditions for business operations.

Monetary policy official Masato Kanda remarked that the yen’s current weakness does not reflect fundamental factors, labelling recent depreciation waves as speculative. Kanda stated that authorities are closely monitoring currency movements and feel the need to “keep a finger on the pulse” of the market. Japan is ready to respond to yen volatility appropriately, though decisions are yet to be made.

The yen’s decline gained momentum last week when the Bank of Japan raised its interest rate for the first time in 17 years, ending eight years of negative interest rates. The capital market was prepared for this move, as the BoJ had meticulously laid the groundwork for such a step.

The Bank of Japan intends to maintain an accommodative monetary policy for an extended period, which acts against the yen’s value.

Technical analysis of USD/JPY

On the H4 chart of USD/JPY, a growth wave to 151.85 has been completed. This target is local and estimated. The market is currently forming a consolidation range below this level. With a downward breakout from this range, a correction to 149.12 is possible, after which a new growth wave to 152.70 is anticipated. The MACD oscillator supports this scenario, with its signal line directed downwards towards the zero line.

On the H1 chart of USD/JPY, a narrow consolidation range has formed around 151.31. A downward breakout and continuation of the correction to 150.75 are expected. Breaking through this level would open potential towards reaching 149.20, followed by an increase to 151.85. The Stochastic oscillator confirms this scenario, with its signal line below 80 and preparing for a decline to 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.