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EURUSD shows no resistance. Overview for 24.05.2024

The primary currency pair continues to weaken at the end of the week. The current exchange rate for EURUSD stands at 1.0805.

May statistics showed that business activity in the US accelerated to the highest level in two years. The preliminary value of the Markit Services PMI increased to 54.8 points in May from 51.3 points previously, and the Manufacturing PMI in May rose to 50.9 points from 50.0 points.

At the same time, several manufacturers reported an increase in prices for a range of resources, providing one of the reasons for revising expectations regarding the US Federal Reserve interest rates. Such signals are pro-inflationary and are negative news for the Fed.

According to CME's FedWatch monitor, the timing for the Fed's first interest rate cut has now been pushed from November to December.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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JPY has strengthened. Overview for 27.05.2024

The Japanese yen has moderately risen against the US dollar. The current USDJPY pair stands at 156.73.

Bank of Japan monetary policymakers are actively commenting on current developments. Bank of Japan Governor Kazuo Ueda noted that it is premature to address interest rate issues until inflation expectations consolidate. Assessing a fair, neutral interest rate level is currently very difficult.

His colleague, Bank of Japan Deputy Governor Shinichi Uchida, believes the BoJ is close to completing its battle against deflation. He noted that wage growth will likely continue. Japan has been combating deflation for over a decade and has yet to be successful.

Previously released inflation data exerted local pressure on the yen. The overall consumer price index decreased to 2.5% in April from 2.7% in March. April’s core inflation fell to 2.2% from 2.6% in March, marking the second consecutive month of decline. These are not the most favourable figures.

The Bank of Japan continues to fight for stable prices. The interest rate will remain unchanged until signs of confidence in this area emerge.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team
 

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EUR continues to rise. Overview for 28.05.2024

The primary currency pair is experiencing upward momentum. The current EURUSD exchange rate stands at 1.0875.

The currency market is witnessing an encouraging surge in risk appetite, bolstering the euro’s position and exerting pressure on the US dollar. The US currency is holding within narrow ranges against its major competitors ahead of Friday’s core PCE report. The inflation release is expected to provide investors with more data for insight into the Federal Reserve’s future monetary actions.

The European Central Bank has made neutral comments, while German statistics have reflected a deterioration in business sentiment in May.

Germany will release inflation data on Wednesday, and the eurozone will publish its reports on Friday. These figures are of utmost importance ahead of the ECB’s June meeting. Investors are eager to know how soon the ECB might ease monetary policy.

Inflation in the eurozone may continue to slow. If so, the European regulator has every argument to prepare for an interest rate cut next week.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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JPY is gradually retreating. Overview for 29.05.2024

The Japanese yen is declining against the US dollar on Wednesday. The current USDJPY exchange rate stands at 157.24.

The instrument is currently at a four-week high. The yen has returned to the levels observed before Tokyo intervened to support the national currency in late April and early May.

On 29 April, the US dollar reached a 34-year peak of 160.24 yen, prompting at least two currency interventions by the Japanese monetary authorities. According to various estimates, about nine trillion yen or more (57.21 billion USD) was spent to support the weak yen. The JPY exchange rate stabilised and recouped some losses, but not for long.

The Japanese monetary authorities continue to make verbal interventions, which have no impact on the market. As the market suggests, without real actions, the dollar-yen exchange rate will rapidly return to levels preceding the intervention.

The Bank of Japan may expect an interest rate hike if a sharp weakening of the yen rate leads to inflationary growth.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team
 

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EURUSD is under selling pressure. Overview for 30.05.2024

The primary currency pair looks relatively weak on Thursday. The current exchange rate for EURUSD is 1.0792.

Yesterday, a substantial rise in US government bond yields significantly impacted the US dollar, pulling it up and causing a dramatic shift in sentiment in the currency market and a subsequent decrease in risk appetite.

Expectations for a Federal Reserve interest rate cut this year have decreased amid signs of persistent inflation. According to the CME FedWatch monitor, the likelihood of a rate cut at the September meeting is estimated at 56.6%, down from 57.5% a week earlier. However, there is much discussion in the market that the rate cut might occur in November instead of September, which is essential to bear in mind.

The Fed itself has not provided any additional comments on this matter.

The release of revised US GDP statistics for Q1 today is expected to be a significant event, potentially leading to increased volatility.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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EUR is growing, but the dollar is gloomy. Overview for 31.05.2024

The primary currency pair is gaining on Friday. The current exchange rate for EURUSD is 1.0817.

The US dollar stabilised by today, but it noticeably weakened the evening before. This development was attributed to the publication of the second estimate of the US GDP for Q1 2024. The data do not rule out the possibility of US Federal Reserve interest rate cuts this year.

The statistics showed that GDP increased by only 1.3% y/y in January-March, while the first estimate reflected a 1.6% rise. This deterioration in the data has opened the door for the Fed to consider at least one rate cut by the end of the year. The market's current assessment of the likelihood of monetary policy easing at the September meeting stands at 55%, compared to 51% a day earlier.

Today, the market focuses on the Core PCE, the Fed's preferred inflation component. By this evening, the market will have more data on which to base speculations about the Federal Reserve's monetary policy outlook.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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NZD continues its ascent. Overview for 03.06.2024

The New Zealand dollar is rising against the US dollar. The current NZDUSD exchange rate stands at 0.6142.

Trading volumes for the NZD appear relatively small at the beginning of the week due to the market pause in observance of the King's Birthday.

The main support for the NZD now is the weak US dollar. The US Personal Consumption Expenditures index, Core PCE, for April, released on Friday, was in line with expectations at 2.7% y/y, allowing the US Federal Reserve to lower the interest rate this year. The dollar has naturally weakened while other currencies have risen.

Maintaining high interest rates in New Zealand supports the NZD's position despite some weakening in the domestic economy.

Earlier, the RBNZ reaffirmed its hawkish stance on monetary policy, surprising many by considering an interest rate hike. Meanwhile, inflation expectations remain unchanged, slightly reducing the likelihood of monetary policy tightening.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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EUR has surged. Overview for 04.06.2024

The primary currency pair continues to climb higher on Tuesday. The current EURUSD exchange rate stands at 1.0908.

The US dollar has retreated to its lowest value since 21 March as signs of persisting weakening in the US economy strengthen arguments for an imminent interest rate cut by the US Federal Reserve. The US ISM manufacturing PMI in May decreased to 48.7 points from the previous 49.2, falling short of expectations.

According to the LSEG monitor, the likelihood of a Federal Reserve rate cut in September is currently estimated at 59.1% compared to 55.0% on Friday. This anticipation is further heightened by growing expectations, which were no more than 50.0% early last week. The employment market data for May, particularly the wage parameters, which are significant in the context of inflation, will be crucial this week.

The Federal Reserve’s next meeting will conclude on 12 June, and the latest consumer price data will be released that day. Although no risk is expected at this meeting, the Federal Reserve must update its economic forecasts.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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EURUSD corrected itself. Overview for 05.06.2024

The major currency pair stabilised on Wednesday after surging earlier. The current EURUSD exchange rate stands at 1.0877.

The market is gathering strength ahead of Friday’s US employment market report. Investors are currently interpreting isolated signals, with the previous day’s surprising data from the April job openings report still fresh in their minds. The report revealed a significant drop, reaching its lowest level in three years.

Specifically, JOLTS statistics showed that job vacancies decreased by 296 thousand, totalling 8.059 million, the lowest value since February 2021.

Investors usually do not pay much attention to such a release, but it has gained attention because the market is concerned about the tone of Friday’s data on the labour market. Non-farm payrolls (NFP) are expected to have risen by 185 thousand in May compared to April’s 175 thousand.

A weak employment report is good news for the US Federal Reserve, providing more arguments for a rate cut.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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CAD has strengthened. Overview for 06.06.2024

The Canadian dollar, paired with the US dollar, has strengthened. The current USDCAD exchange rate stands at 1.3678.

In the medium term, the pair remains within a wide sideways channel.

Yesterday, the Bank of Canada reduced the interest rate for the first time in four years to 4.75% per annum from the previous 5.00%. The regulator cited the progress achieved in its battle against inflation as an argument for this decision. According to the Bank of Canada’s press release, the core Consumer Price Index is declining, providing a reason to abandon restrictive monetary policy.

At least four inflation components improved significantly, including core inflation, the core price index with its median and average values, and the 3-month moving average.

Some CPI components rose by over 3%, close to a historical average value.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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JPY takes a pause. Overview for 07.06.2024

The Japanese yen is stable against the US dollar on Friday. The current USDJPY exchange rate is 155.57.

Investors refrain from making significant decisions ahead of next week's BoJ meeting. The regulator is expected to maintain interest rates unchanged. The market is closely monitoring monthly bond purchases. A potential reduction in figures could signal a gradual tightening of monetary policy.

Bank of Japan Governor Kazuo Ueda confirmed this week that the central bank will gradually reduce its extensive balance sheet. The timing of such an undertaking remains uncertain.

In March 2024, the Bank of Japan phased out its negative interest rate policy, which had been in place for eight years. At the same time, it scrapped its yield curve control program as Japan set its sights on normalising monetary policy.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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EUR fell to a four-week low. Overview for 10.06.2024

The primary currency pair continues to plummet on Monday. The current EURUSD exchange rate stands at 1.0795.

The euro faced two substantial pressure factors. Firstly, there were political developments in France, where the pro-presidential forces lost the European Parliament elections to the far-right. French President Emmanuel Macron called snap elections after his party’s defeat to Marine Le Pen’s far-right, which crushed it by nearly half.

Secondly, investors have adjusted their expectations about the Federal Reserve interest rate trajectory following Friday’s US employment market statistics. In anticipation of the Federal Reserve meeting this week, the impact of such a driver is considerably strong.

Non-farm payrolls expanded by 272 thousand last month from the previous 165 thousand, while the unemployment rate increased to 4.0% from 3.9% in April. Average hourly earnings rose by 0.4% m/m in May, twice as high as the April reading.

The EURUSD pair will experience very high volatility this week.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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GBP attempts to rise. Overview for 11.06.2024

The British pound sterling is trying to rise against the US dollar. The current GBPUSD exchange rate stands at 1.2736.

The pound has stabilised after hitting a new local low last week. The UK employment market data, industrial production, construction activity, and trade balance figures are due for release. The data are expected to confirm an economic slowdown in April.

The unemployment rate will likely remain at 4.30%, and average earnings are anticipated to increase by 5.70%.

At its next meeting on 20 June, the Bank of England will likely keep the interest rate unchanged at 5.25% per annum, its peak since 2008. UK inflation is clearly reducing, but not fast enough.

Additionally, there is some uncertainty about the country’s elections in early July, which may exert pressure on the pound.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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EURUSD declines. Overview for 12.06.2024

The primary currency pair is dropping lower on Wednesday. The current EURUSD exchange rate stands at 1.0740.

Political instability in France is significantly impacting the euro. President Emmanuel Macron’s position has become shaky following the far-right party’s victory in the European Parliament elections. Rumours are circulating that Macron might also lose the forthcoming elections, which would jeopardise France’s financial stability. This factor is now adding to the euro’s imbalance.

The US Federal Reserve meeting is underway. The decision on the interest rate will be announced on Wednesday evening, and it is expected to remain unchanged at 5.25% per annum. The market is keen for fresh and relevant assessments of the economy and outlook.

The most crucial information the financial world awaits is the timing of the first easing of monetary conditions, with general forecasts currently referring to November.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team
 

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EURUSD experienced significant volatility. Overview for 13.06.2024

The primary currency pair is looking for support after a turbulent rise on Thursday. The current EURUSD exchange rate stands at 1.0805.

Yesterday, the EURUSD pair faced a massive flow of data from both the US Federal Reserve and statistical reports. The Fed’s June meeting ended neutrally, with the interest rate remaining at 5.25% per annum, which was in line with expectations. However, the Federal Reserve’s comments, hinting at a rate cut this year closer to December, and the perceived aggressiveness of the Fed’s rhetoric regarding steps in 2025, have left the market in a state of anticipation for an active interest rate reduction.

The US Consumer Price Index dropped in May, exceeding forecasts. Inflation stood at 3.3% year-on-year, remaining flat on a month-to-month basis. Core inflation decreased to 3.4% year-on-year from the previous 3.6%. This development indicates the easing of price pressure, a positive signal for the economy and the Federal Reserve.

The market has become overly sensitive to statistical data releases. The US Federal Reserve created this foundation, having previously stated that it planned to gather as much data as possible to identify patterns.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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JPY is under pressure. Overview for 14.06.2024

The Japanese yen is declining against the US dollar on Friday. The current USDJPY exchange rate stands at 157.85.

The Bank of Japan concluded its meeting, opting to maintain its current monetary policy structure, keeping the interest rate at zero. In its comments, the BoJ stated that it would maintain the parameters for purchasing Japanese government bonds at the levels agreed in March.

This disappointed investors who were expecting signals towards a reduction in bond purchases. Previously, the Governor of the Bank of Japan did not rule out a gradual reduction of its enormous balance sheet in the form of government bonds but did not specify any timelines.

In March 2024, the Bank of Japan tightened monetary policy for the first time in seven years, moving the interest rate from negative territory to zero.

Fundamental analysis for other instruments can be found in the section "Forex Forecasts and Analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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  • 3 weeks later...

GBP continues to strengthen following a decline

The GBPUSD pair is strengthening its position following the release of the house price indices. It is likely to undergo a correction ahead of a further decline.

GBPUSD trading key points

  • The UK’s Nationwide House Price Index (y/y) in June 2024 increased by 0.2%
  • The UK’s Nationwide House Price Index (m/m) in June 2024 decreased by 0.2%
  • The GBPUSD targets: 1.2600, 1.2500

GBPUSD fundamental analysis

The UK released its year-on-year and month-on-month house price indices for June 2024 on Monday, 1 July 2024. The figure increased slightly by 0.2% year-on-year and declined by 0.2% month-on-month, which did not prevent the pound from strengthening against the US dollar.

The consumer and mortgage lending figures will also be published today. However, given their low importance, the data will not significantly impact the GBPUSD rate.

US manufacturing PMI data is due during the second half of the European trading session. While the forecast suggests growth, the actual data release will confirm this, which may exert significant pressure on the GBPUSD rate.

Market analysis for other instruments can be found in the section "Market analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

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Posted (edited)

USDJPY analysis: the yen continues to lose ground

The USDJPY pair continues its ascent, with no significant correction expected in the near term.

USDJPY trading key points

  • 10-year Japanese government bond (JGB) auction – 1.091%
  • Japan’s monetary base (y/y) – 0.6%
  • USDJPY targets: 163.30, 158.90, 157.40

USDJPY fundamental analysis

The 10-year Japanese government bond (JGB) auction did not help the yen. The USDJPY rate continues its ascent. Insignificant news does not rescue the yen from depreciation at this stage.

Japanese authorities’ actions are widely viewed as playing for a rival, with attempts to strengthen the yen ending with another increase in the USDJPY rate. Bulls are aggressive and seem to have a clear strategy – to make the most of the yen’s depreciation.

Market analysis for other instruments can be found in the section "Market analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

Edited by RBFX Support
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Posted (edited)

EURUSD continues to strengthen in anticipation of speeches by the ECB and FOMC officials

The EURUSD pair is rising ahead of upcoming ECB and FOMC data. After the release of the FOMC minutes, another corrective wave may follow.

EURUSD trading key points

  • The eurozone services PMI is projected at 52.6, lower than the previous 53.2
  • A speech by ECB official Philip R. Lane
  • A speech by FOMC member John C. Williams
  • US nonfarm payrolls: prior reading of 152,000 and a forecast of 163,000
  • US initial jobless claims: previous reading of 233,000 and a forecast of 234,000
  • A speech by ECB President Christine Lagarde
  • FOMC minutes release

EURUSD fundamental analysis

The EURUSD pair continues to strengthen on the news. The euro awaits speeches by ECB official Philip R. Lane, ECB President Christine Lagarde, and FOMC member John C. Williams, which may adjust the EURUSD rate and help strengthen the euro against the US dollar.

Nonfarm payrolls are projected to rise, and initial jobless claims are expected to increase as well. At this stage, it can be preliminarily concluded that these indicators will not significantly impact the EURUSD rate.

The FOMC minutes will be released at the end of the US trading session, potentially increasing volatility and temporarily supporting the EUR.

Market analysis for other instruments can be found in the section "Market analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team
 

Edited by RBFX Support
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Posted (edited)

JPY is gaining momentum, with the US economy slowing

The USDJPY rate is declining ahead of Friday’s US nonfarm payrolls report.

EURUSD trading key points

  • The Federal Reserve’s June meeting minutes confirm US economic slowdown
  • The likelihood of a Federal Reserve interest rate cut in September increased to 68% from 56%
  • Traders are awaiting the release of Friday’s US nonfarm payrolls report

USDJPY fundamental analysis

The US dollar declines on Thursday, influenced by weak economic indicators. Investors believe there is a gradual turn in the flow of US economic data, and the Federal Reserve’s June meeting minutes confirm economic slowdown and easing inflationary pressure. Market expectations about a potential Federal Reserve interest rate cut in September rose to 68% from 56% a week earlier.

Traders may adjust positions in anticipation of Friday’s US nonfarm payrolls report, a key indicator for assessing the economy’s state. This may be the primary reason behind the USDJPY pair’s current decline.

Overall, investors continue to monitor the JPY closely, considering the possibility of a currency intervention by the Japanese government. However, Japan’s Ministry of Finance stated that the goal of a potential intervention will not be the yen rate but its excessive volatility. Current market conditions do not meet the criteria for Japanese authorities to intervene.

Market analysis for other instruments can be found in the section "Market analysis" on our website.

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Sincerely,
The RoboForex Team

Edited by RBFX Support
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