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Market Fundamental Analysis by RoboForex

EURUSD rose: the market awaits US employment market statistics

Supported by expectations regarding the Federal Reserve’s policy, the EURUSD pair returned above 1.1100, rising for the third consecutive session. Find out more in our analysis for 6 September 2024.

EURUSD forecast: key trading points
  • The EURUSD pair has resumed steady growth
  • Today, investors are awaiting the crucial US employment sector releases for August
  • EURUSD forecast for 6 September 2024: 1.1133, 1.1026, and 1.0985
Fundamental analysis

The EURUSD rate climbed to 1.1115.

The first release of US employment market data for August surprised the market yesterday. ADP private sector jobs increased by only 99,000, missing the forecast of 144,000 and falling short of the previous increase of 122,000. While there is no direct correlation between these figures and nonfarm payrolls, the sentiment is clear: the employment market is losing jobs.

This may prompt the US Federal Reserve to act even more swiftly than planned. In this context, today’s statistics are crucial, with the US unemployment rate report for August scheduled for release this evening. The main forecast suggests a decrease to 4.2% from 4.3%. Nonfarm payrolls could expand by 164,000 following previous growth of 114,000. However, statistics may bring surprises.

The EURUSD forecast suggests an increase in volatility later this afternoon.

RoboForex Market Analysis & Forex Forecasts

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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.


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The RoboForex Team
 
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Gold (XAUUSD) remains in a sideways range; the market awaits US inflation statistics

The XAUUSD price has been trading in a sideways range for three weeks; the direction of the price movement out of the range may determine the future trend. The market will focus on US inflation data this week. Find out more in our XAUUSD analysis for today, 9 September 2024.

XAUUSD forecast: key trading points
  • Market focus: market participants are awaiting US inflation statistics this week
  • Current trend: gold is consolidating within a sideways range
  • XAUUSD forecast for 9 September 2024: 2,532 and 2,470
Fundamental analysis

Friday’s US employment market statistics aligned with the forecasts, with nonfarm payrolls showing growth of 142,000 and the unemployment rate declining to 4.2%. US stock indices responded to this data with a fall, and gold also corrected downwards from its annual high of 2,532 USD to 2,500 USD.

Market participants will focus on US inflation statistics this week, with the Consumer Price Index (CPI) and the Producer Price Index (PPI) scheduled for release. A decline in inflation will exert pressure on the USD and help strengthen gold. Conversely, a rise in inflation will support the US dollar, potentially causing XAUUSD quotes to fall.

RoboForex Market Analysis & Forex Forecasts

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
 
USDJPY remains flat: the market is awaiting signals

The USDJPY pair has halted its rise and is consolidating. Investors have a busy week ahead. Find out more in our analysis for 10 September 2024.

USDJPY forecast: key trading points
  • The USDJPY halted its ascent
  • The market is still betting on a decisive monetary policy tightening by the Bank of Japan
  • USDJPY forecast for 10 September 2024: 139.70
Fundamental analysis

The USDJPY rate is hovering around 143.25 on Tuesday. Last week’s gains for the yen appear to be offset, with the US dollar regaining ground ahead of the release of crucial inflation statistics this week.

The JPY rate rose by more than 3.00% over the past week, with the USDJPY pair falling to annual lows. This became possible due to expectations of future decisive steps by the Bank of Japan. In making a decision to raise interest rates before the end of the year, the BoJ could be supported by the continued growth of wages in the country and persistent inflationary pressure.

It became known a little earlier that the Japanese economic growth rate slowed in Q2. The country’s GDP grew by 2.90% year-over-year, falling short of the preliminary estimate of 3.10%. The USDJPY forecast is still neutral.

RoboForex Market Analysis & Forex Forecasts

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
 
USDCAD: the US dollar continues to strengthen

The US consumer price index at last year’s level and the rest of the fundamental data package may further drive the USDCAD pair. Discover more in our analysis for 11 September 2024.

USDCAD forecast: key trading points
  • The Thomson Reuters/Ipsos primary consumer sentiment index in Canada (PCSI): previously at 50.06
  • The US consumer price index (m/m) for August: previously at 0.2%, projected at 0.2%
  • The US consumer price index (y/y) for August: previously at 2.9%, projected at 2.5%
  • USDCAD forecast for 11 September 2024: 1.3700
Fundamental analysis

The primary consumer sentiment index is calculated by Thomson Reuters/Ipsos and measures consumer sentiment based on a target group survey. The index increased to 50.06 last month, indicating positive consumer sentiment. The forecast for 11 September 2024 may be disappointing for the Canadian dollar, with the USDCAD rate continuing its ascent after a correction.

The expected fundamental news for the USDCAD pair may be called neutral. According to analytical forecasts, almost all data may be released in line with expectations or with minor deviations.

There is a package of US news, including year-over-year and month-over-month consumer price indices for August. They reflect changes in consumer goods and services prices and are key indicators for the direction of purchases and US inflation. Readings below the forecast are considered negative for the US dollar, while those above are considered positive.

The forecast suggests that the CPI index may remain flat at 0.2% month-over-month and slightly decrease to 2.5% year-over-year. Expectations that the estimates will align with actual data are so far low. An increase in indicators may further boost the USDCAD pair.

Despite the news, the USDCAD forecast for 11 September 2024 appears positive for the US dollar as it may strengthen its position against the Canadian dollar. Actual data aligning with the forecast may also drive growth in the pair.

RoboForex Market Analysis & Forex Forecasts

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
 
EURUSD: rising US core inflation has almost ruled out a 50-basis-point Fed interest rate cut

The EURUSD rate is slightly correcting following a decline caused by a rise in US inflation. Discover more in our analysis for 12 September 2024.

EURUSD forecast: key trading points
  • US core inflation unexpectedly rose by 0.3% in August from July, marking the highest reading in four months
  • The likelihood of a 50-basis-point Federal Reserve interest rate cut at the next meeting is virtually ruled out, while the odds of a 25-basis-point cut (market expectations) are 87%
  • The European Central Bank is expected to lower the key rate by 25 basis points today
  • According to analysts, the EURUSD rate may fall to 1.0200 by the end of the year amid ECB monetary policy tightening
  • EURUSD forecast for 12 September 2024: 1.0986 and 1.0950
Fundamental analysis

US core inflation unexpectedly rose in August, driven by increased housing and travel prices. The core CPI, excluding food and energy costs, increased by 0.3% from July, marking the highest reading over the past four months. Headline inflation ran at 0.2% m/m and 2.5% y/y. This unexpected rise in inflation may prevent the Federal Reserve from lowering interest rates aggressively despite signs of a slowing employment market.

The current inflation data changed market expectations, pushing the EURUSD rate slightly down. The likelihood of a 50-basis-point Federal Reserve interest rate cut at the upcoming meeting is now virtually ruled out. Instead, expectations of a 25-basis-point cut are estimated at 87%, while the odds of a more significant 50-basis-point reduction have dropped to 13%. The market has already priced everything in, although analysts had expected to get clarity on interest rate issues only by Friday.

At the same time, the European Central Bank is expected to lower the key rate by 25 basis points today. This decision is due to the fact that inflation in the eurozone eased to 2.2% in August, wage growth slowed, and the GDP Q2 growth forecast was revised to 0.2%. According to analysts, the EURUSD rate may decline to 1.0200 by the end of the year amid ECB monetary policy tightening in response to the weakening economy. The current ECB meeting may directly impact today’s EURUSD forecast and become a significant catalyst for the currency market, showing that the regulator can cut rates faster than currently expected.

RoboForex Market Analysis & Forex Forecasts

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
 
USDJPY at annual lows: this is not the end yet

The USDJPY pair continues to fall. The Japanese yen has risen to new highs. Find out more in our analysis for 13 September 2024.

USDJPY forecast: key trading points
  • The USDJPY pair declines rapidly
  • The yen receives support from the Bank of Japan’s hawkish statements
  • USDJPY forecast for 13 September 2024: 139.70 and 137.77
Fundamental analysis

The USDJPY rate fell to 140.99 on Friday, marking another annual low. This became possible due to the hawkish comments from a Bank of Japan member. Yesterday, Bank of Japan Policy Board member Naoki Tamura said that the regulator should raise short-term interest rates to 1.00% by fiscal 2026 to reach the inflation target of 2.00%.

This is not the only strong statement in recent days. Junko Nakagawa has previously noted that the Bank of Japan is ready to hike interest rates further. This will be relevant if the economy and inflation align with forecasts.

Rating agency Fitch revised its interest rate expectations. The borrowing cost is now projected at 0.50% by the end of 2024, 0.75% by the end of 2025, and 1.00% by the end of 2026.

The yen has benefited from the global weakening of the US dollar. The USDJPY forecast suggests further sell-offs in the pair.

RoboForex Market Analysis & Forex Forecasts

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
 
GBPUSD continues to rise following a correction

Improving UK house price index and US manufacturing index figures support the British pound. Discover more in our analysis for 16 September 2024.

GBPUSD forecast: key trading points
  • The Rightmove UK house price index (y/y): previously at -1.5%, currently at 0.8%
  • NY Empire State Manufacturing Index (US): previously at -4.7 points, currently at -4.1
  • GBPUSD forecast for 16 September 2024: 1.3177 and 1.3199
Fundamental analysis

A monthly change in the Rightmove UK year-over-year house price index was published on Monday, 16 September 2024. The indicator shows how much the average price of housing property for sale has changed. Figures above the forecast and previous data are a positive factor for the British pound. A weaker-than-expected reading reflects negative developments. The previous statistics came out below forecasts, while the current reading has now shifted to positive territory, reaching 0.8% and propelling the GBPUSD rate.

The NY Empire State Manufacturing Index measures the development of the manufacturing sector in New York State. It is calculated based on a survey of 200 largest manufacturing enterprises. A reading above zero points to increased manufacturing activity, while the one below zero indicates a decline. Stronger-than-expected data may provide significant support to the US dollar. The forecast for 16 September 2024 suggests that the reading will remain in negative territory at -4.1, which is still negative for the US dollar.

Fundamental analysis for 16 September 2024 does not provide arguments in favour of the US currency, so the pound sterling has every chance to continue its upward momentum after the correction.

RoboForex Market Analysis & Forex Forecasts

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
 
EURUSD: expectations for a 50-basis-point Fed interest rate cut are growing

The EURUSD rate is correcting after declining for three consecutive sessions, with losses exceeding 1.19%. Discover more in our analysis for 17 September 2024.

EURUSD forecast: key trading points
  • The likelihood of a 50-basis-point Federal Reserve interest rate cut is 69%, while the odds of a 25-basis-point rate reduction is 31%
  • Investors are awaiting data on US retail sales and industrial production today, which are projected to decrease slightly
  • Some analysts believe the US economy continues to grow, which may support the US dollar
  • EURUSD forecast for 17 September 2024: 1.1115 and 1.1026
Fundamental analysis

The EURUSD rate continues to test the 1.1130 level, with the US dollar remaining under pressure as investors await the crucial Federal Reserve meeting, where interest rates are expected to be cut for the first time since 2020.

The markets have already priced in a possible 25-basis-point Federal Reserve interest rate cut. However, expectations are rising for a more significant 50-basis-point cut. According to the CME FedWatch tool, the likelihood of this event currently stands at 69%, up from 59% a day ago. The odds of a more modest 25-basis-point cut are estimated at 31%.

Today, investors are awaiting the release of US retail sales and industrial production data to better assess the state of the economy. Forecasts suggest a slight decrease in the figures. According to some analysts, the US economy continues to grow, outperforming most other countries; hence, the US currency is not expected to weaken sharply.

Nevertheless, BNP Paribas experts believe the situation may change if the US economy begins to slow down. In case of a possible recession, the Federal Reserve will likely lower interest rates more aggressively than other central banks, which may weaken the US dollar and increase its vulnerability.

As shown by Goldman Sachs research, the US dollar typically strengthens if rates are reduced amid economic growth. It is also noted that the US currency shows strong positions if the Federal Reserve cuts rates simultaneously with other central banks. In the current situation, several major central banks are cutting rates, which may positively impact the US dollar movements as part of today’s EURUSD forecast.

RoboForex Market Analysis & Forex Forecasts

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
 
USDCAD: markets expect a faster interest rate cut by the Bank of Canada

The USDCAD rate is declining on Wednesday after rebounding from the crucial resistance level. Find out more in our analysis for 18 September 2024.

USDCAD forecast: key trading points
  • Inflation in Canada eased to 2.0% in August, the lowest in 3.5 years
  • Inflation data supports the Bank of Canada governor’s statements that the pace of interest rate cuts may be accelerated
  • Housing starts in Canada fell by 22.3% to 217,000 in August, marking the lowest reading since November 2023
  • USDCAD forecast for 18 September 2024: 1.3695
Fundamental analysis

The USDCAD rate is influenced by inflation data as investors are confident in further monetary policy easing by the Bank of Canada.

Inflation in Canada continued to slow, reaching 2.0% in August. This is the lowest reading in the past 3.5 years and is in line with the regulator’s forecasts, which expected inflation to ease to 2.5% in the second half of 2024. However, analysts believe inflation may rise again as the August slowdown is partially due to falling global fuel prices.

This data reinforces statements by Bank of Canada Governor Tiff Macklem about a potential acceleration of the pace of interest rate cuts amid concerns about the employment market and an expected fall in oil prices. The markets now anticipate a 50-basis-point interest rate cut, which may lead to sharp price fluctuations as part of the USDCAD forecast for today.

However, high mortgage rates and rents continue to exert pressure on inflation, indicating ongoing challenges in the Canadian economy despite the overall inflation easing. This is further confirmed by the data on a sharp decrease in construction: housing starts fell by 22.3% to 217,000 in August 2024, the lowest since November 2023 and well below market expectations of 258,000.

RoboForex Market Analysis & Forex Forecasts

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
 
USDJPY: markets await the Bank of Japan's decision

The USDJPY rate is correcting after rebounding from the 143.40 resistance level. Find out more in our analysis for 19 September 2024.

USDJPY forecast: key trading points
  • Jerome Powell’s comments: further large interest rate cuts will not be the new standard
  • US economic data expectations: focus on initial jobless claims and existing home sales
  • The Bank of Japan decision: the current interest rate is expected to remain unchanged on Friday, but signals of future hikes are possible
  • Japan’s inflation data: the core CPI is projected to decrease to 2.5%, potentially affecting BoJ’s further actions
  • USDJPY forecast for 19 September 2024: 141.30, 139.10, and 137.77
Fundamental analysis

Investors, who expected sharp fluctuations in the USDJPY rate after the US Fed interest rate cut, saw a more restrained reaction. The US dollar rate strengthened on comments from Federal Reserve Chair Powell that the regulator does not intend to rush to ease monetary policy and that a 50-basis-point rate cut will not become a regular occurrence. However, analysts believe the relative calm will not last long, with the markets likely to face unexpected fluctuations in the coming hours as rate expectations in other economies intensify.

Investors will now be closely watching the upcoming US economic data, including initial jobless claims and existing home sales. Initial jobless claims are expected to decrease from 230,000 to 226,000. Such a slight reduction may signal stability in the employment market, which is a significant indicator for assessing the state of the US economy. Existing home sales are also projected to fall from 3.95 million to 3.91 million homes. The slowdown in the real estate market may be due to elevated interest rates, which make mortgage loans more expensive, reducing demand for home purchases.

The Bank of Japan's monetary policy decision will also be in the spotlight on Friday and may significantly change today’s USDJPY forecast. The regulator is expected to maintain current monetary policy parameters, keeping the interest rate unchanged. However, the BoJ may signal potential future rate hikes, especially if inflation and economic indicators change noticeably. Investors are also keeping a close eye on Japan’s inflation data for August, which is due on Friday. The core CPI is projected to fall to 2.5%. This will indicate easing inflation, which will reduce the pressure on the BoJ when making further decisions.

RoboForex Market Analysis & Forex Forecasts

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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