The EUR/USD sell-off paused slightly ahead of the upcoming minutes by the ECB.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 0.9850.
•  Add a stop-loss at 1.0025.
• Timeline: 1 day.

Bullish view

• Set a buy-stop at 1.0010 and a take-profit at 1.0100.
• Add a stop-loss at 0.9925.

The EUR/USD price moved sideways on Thursday morning as investors waited for the upcoming European Central Bank (ECB) minutes. The pair was trading at 0.9962, which was slightly above this week’s low of 0.9900.

ECB minutes, US GDP, and Jackson Hole

The EUR/USD sell-off paused slightly ahead of the upcoming minutes by the ECB. These minutes will provide more color about the deliberations that happened in the committee during the July meeting. In it, the members decided to hike interest rates for the first time in 11 years. It hiked by 0.50% and hinted that more increases were coming.

Therefore, the minutes will shed more light on whether the committee expects rates to keep rising even as the economic crisis escalates. In addition to high inflation, Europe is facing additional challenges like a prolonged drought that has led to substantially low water levels in key rivers. At the same time, the bloc risks power rationing in winter.

The EUR/USD price will react to the latest German GDP and business sentiment data. Based on the first estimate, analysts expect that the German economy expanded by 1.5% year-on-year in the second quarter. The country is under intense pressure because of its reliance on German natural has.

Meanwhile, analysts expect data by the IFO Institute to show that business climate, current assessment, and expectations dropped sharply in August. This will be in line with the relatively weak flash manufacturing and services PMI numbers that were published on Tuesday.

In the United States, the main event will be the Jackson Hole Symposium where central bank officials will have a chance to reset expectations. Jerome Powell’s speech will be the headline event. Christine Lagarde will not attend the event.

The second reading of US GDP data will not significantly impact the pair unless there is a major change. Data published in July showed that the economy moved to a recession in Q2 as it contracted by 0.8%.

EUR/USD Forecast

The EUR/USD pair has been in a strong bearish trend in the past few weeks. It moved from this month’s high of 1.0368 to below the parity level. On the four-hour chart, it dropped below the important support at 1.0095 and the 25-day and 50-day moving averages,

It has also formed what looks like a bearish consolidation pattern. Therefore, the pair will likely resume the downward trend and retest the key support at 0.9850.

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The pair will likely have a bullish breakout in the near term.

Bullish View

• Buy the BTC/USD pair and set a take-profit at 26,000.
• Add a stop-loss at 23,500.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 23,500 and a take-profit at 22,000.
• Add a stop-loss at 25,500.

The BTC/USD price moved sideways and remained above the important support at $24,000 as the recent rebound stalled. The pair was trading at 24,155 on Tuesday, which was lower than this week’s high of 25,200. It is also about 37% above the lowest level this year.

Bitcoin Recovery Stalls

The BTC/USD pair moved sideways as investors focused on the relatively strong US dollar. The dollar index rose by more than 0.80% in the overnight session and was trading at $106.33, which was the highest point in about two weeks. Bitcoin has an inverse relationship with the US dollar.

Further, the performance happened as investors saw the VIX index rise by more than 2.30%. This performance was mostly because of the ongoing weakness in China.

Data published by the country’s National Bureau of Statistics (NBS) showed that industrial production, fixed asset investments, and retail sales declined in July. As a result, the country’s central bank decided to cut two important interest rates.

The BTC/USD price also wavered in line with the performance of other cryptocurrencies. ETH moved back below $2,000 while the total market cap of all cryptocurrencies declined to $1.23 trillion.

The next key catalyst for Bitcoin will be the upcoming minutes of the Federal Open Market Committee (FOMC) that are scheduled for Wednesday. These minutes will provide more information on what happened in last month’s meeting.

Still, there is a high possibility that the bank will continue hiking interest rates in the coming months even as inflation pulls back.

BTC/USD Forecast

The four-hour chart shows that the BTC price has been in a slow bullish trend since June this year. Since then, it has managed to move from a low of 17,600 to a high of 25,202. Along the way, the pair formed what looks like an ascending triangle pattern, which is usually a bullish sign. The triangle has now moved to its confluence level.

At the same time, it has moved above the 25-day and 50-day moving average. The Know Sure Thing (KST) indicator has moved above the neutral point. Therefore, because of the ascending triangle pattern and the strong performance of American equities, the pair will likely have a bullish breakout in the near term. If this happens, the next key reference level to watch will be at 26,000.

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The pair will likely have a bullish breakout this week as investors target the next key resistance point at 26,000.

Bullish View

• Buy the BTC/USD pair and set a take-profit at 26,000.
• Add a stop-loss at 23,000.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 23,500 and a take-profit at 22,000.
• Add a stop-loss at 25,000.

The BTC/USD price moved solidly above the resistance point at 24,000 as sentiment in the market improved. It rose to a high of 24,955, which was the highest level since June 13th of this year, meaning that it has recovered by about 40% from its lowest level this year.

Market Sentiment Improving

The BTC/USD pair continued its recovery as investors focused on corporate earnings and the falling American consumer and producer inflation.

On Wednesday, data published by the American government showed that the country’s consumer inflation dropped from 9.1% in June to 8.7% in July. In the same period, the producer price index (PPI) declined sharply as the cost of fuel pulled back.

These numbers showed that the Federal Reserve will likely slow its rate hiking cycle in the coming months. Still, most Fed officials who have talked after the data came out insisted that the bank will likely continue tightening in the coming months. They noted that inflation remains substantially above the Fed’s target of 2.0%.

The BTC/USD price also rose as the US dollar index retreated from its highest point this year. The dollar index retreated from the year-to-date high of $109.30 to about $106. This performance was mostly because of the performance of US inflation.

Meanwhile, it seems like investors are getting greedy. The fear and greed index that is tracked by CNN Money closed at 55 on Friday. This price is a few points below the greed level of 50 but it is substantially above its lowest level this year. As a result, the main American indices like the Dow Jones, Nasdaq 100, and S&P 500 have moved to a bull market.,

On the other hand, Bitcoin’s fear and greed index rose to 50, which was higher than last month’s low of 15.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD price has been in a slow upward trend in the past few weeks. Along the way, the pair formed an ascending triangle pattern that is shown in purple. This triangle is usually a bullish sign. It has also remained above the 25-day and 50-day moving averages while the Stochastic Oscillator has moved slightly below the overbought level.

Therefore, the pair will likely have a bullish breakout this week as investors target the next key resistance point at 26,000.

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Bullish View

• Set a buy-stop at 24,600 and a take-profit at 25,500.
• Add a stop-loss at 22,500.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 23,450 and a take-profit at 22,000.
• Add a stop-loss at 25,000.

The BTC/USD price jumped in the overnight session as the market reflected on the latest US inflation data. It crossed the important resistance at 24,000 for the first time since last week and is about 35% above the lowest level this year.

US Inflation Data

The BTC/USD price jumped sharply as investors reacted to the latest US consumer price index numbers. According to the Bureau of Labor Statistics (BLS), the country’s consumer price index declined from 1.3% in June to 0.0% in July. This decline was smaller than the median estimate of 0.2%. It then translated to a year-on-year increase of 8.5%, which was lower than the expected 8.7%.

Further data showed that the country’s core inflation dropped from 0.7% to 0.3%, which was lower than the expected 0.5%. On a YoY basis, this inflation remained unchanged at 5.9%. The two figures were still bigger than the Fed’s target of 2.0%.

Therefore, analysts believe that the Fed could start slamming its brakes on hiking interest rates since inflation has started to drop. They expect that it will hike by 0.5% in September followed by 0.25% in the final two meetings of the year.

The BTC/USD pair rose after the report because of the significantly weaker US dollar. The dollar index dropped by more than 1.25% to $104.93. At its peak this year, the index was trading at $109.30. Similarly, America’s short-term bond yields slipped, with the 10-year falling to 2.788% and the 5-year dropping to2.9%.

Meanwhile, other assets also continued their comeback. Gold soared to the highest point in months while American indices like the Dow Jones, Nasdaq 100, and the Russell 2000 rose by more than 1.50%.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD pair dropped to a low of 22,724 on Wednesday. This was a notable level since it was along the ascending trendline shown in green. It then bounced back after the US published weak inflation numbers. The pair has moved above the 25-day and 50-day moving averages while the MACD has moved slightly above the neutral point.

The pair will likely have a bullish breakout in the coming days. This view will be confirmed if it manages to move above the upper side of the ascending triangle pattern at 24.400.

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The pair will likely continue rising as bulls target the next key resistance point at 0.7055.

Bullish View

• Buy the AUD/USD pair and set a take-profit at 0.7055.
• Add a stop-loss at 0.6940.
• Timeline: 1 day.

Bearish View

• Set a sell-stop at 0.6950 and a take-profit at 0.6875.
• Add a stop-loss at 0.7060.

The AUD/USD price recovered as the US dollar retreated. The pair rose to a high of 0.7000, which was the highest point since August 2nd. It has also rebounded by more than 1.85% from the lowest level on Friday after the US published strong jobs data.

US Consumer Inflation Data Ahead

The AUD/USD pair rose slightly as the US dollar retreated. The dollar index retreated by about 0.40% in the overnight session as investors continued focusing on last Friday’s jobs data. According to the Bureau of Labor Statistics (BLS), the economy added over 528k jobs in July while the unemployment rate dropped to 3.6%.

Wages also continued rising. As a result, investors now believe that the Federal Reserve will continue hiking interest rates in the coming months. In an interview on Sunday, Mary Daly said that she supported a 0.50% rate hike in September.

In a separate report, Michelle Bowman, a Fed governor said that she strongly supported last month’s 0.75% rate hike. She added that she also supported similar rate hikes until inflation started declining in a consistent and lasting way.

There will be no major economic data from Australia. Therefore, the next key data to watch will be the upcoming inflation data from the US. Economists expect the data to show that inflation dropped from 1.3% to 0.2% on a month-on-month basis. They also expect that prices dropped from 9.1% to 8.7% on a year-on-year basis.

Further, economists expect the data to show that core CPI fell from 0.7% to 0.5%. On a YoY basis, they expect that core CPI rose from 5.9% to 6.1%. These numbers are still substantially higher than the Fed target of 2.0%.

AUD/USD Forecast

The four-hour chart shows that the AUD/USD pair has formed a double-bottom pattern at 0.6887. In price action analysis, this pattern is usually a bullish sign. It has now moved slightly above the 25-day and 50-day moving averages.

The pair has moved slightly below the first resistance of the standard pivot point while the Relative Strength Index (RSI) has pointed upwards. Therefore, the pair will likely continue rising as bulls target the next key resistance point at 0.7055. This price was the highest point since August 1st.

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The pair will likely have a bullish breakout as buyers target the key resistance at 1.0350.

Bullish View

• Buy the EUR/USD and set a take-profit at 1.0350.
• Add a stop-loss at 1.0150.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 1.0160 and a take-profit at 1.000.
• Add a stop-loss at 1.03100.

The EUR/USD price remained in a tight range on Monday morning as investors repositioned for the new month. The pair was trading at 1.0226, which was higher than last month’s low of 0.9956 and last week’s low of 1.0099.

ECB, Fed, and Inflation

The EUR/USD pair is in a consolidation phase as the market reflects on last month’s actions by the European Central Bank (ECB) and the Federal Reserve.

The ECB, in a surprise decision, decided to deliver its first interest rate by 50 basis points. This increase was bigger than the median estimate of 0.25%.

The Christine Lagarde-led bank also warned that it will continue hiking interest rates in the coming meetings in its bid to fight inflation. Preliminary data published on Friday showed that the bloc’s inflation continued soaring in July as the cost of energy accelerated. Inflation rose by 8.9%, which was the highest level recorded by Eurostat.

The EUR/USD is also consolidating as investors focused on last week’s decision by the Federal Reserve. In response to the rising inflation, the Fed decided to hike interest rates by 0.75% for the second straight month. This increase brought the year-to-date rate increase to 225 basis points, making it the most hawkish that the Fed has been in decades.

Like the ECB, the bank is fighting soaring inflation. Data published last Friday revealed that the US personal consumption expenditure (PCE) rose by 1% on a month-on-month basis in June this year. Core PCE, which excludes volatile food and energy, rose by 4.8%.

Still, there is a sense in which inflation is easing. For example, gasoline prices have moved from a high of $5 to about $4.3. Similarly, food prices and other key commodities like copper and iron ore have declined sharply in the past few weeks.

EUR/USD Forecast

The EUR/USD pair has been in a tight range recently. In this period, it has formed a descending channel that is shown in red. The current price is slightly below the upper side of this channel. It has also moved slightly above the 25-day and 50-day moving averages. The Relative Strength Index (RSI) has also been consolidating.

Therefore the pair will likely have a bullish breakout as buyers target the key resistance at 1.0350. A drop below the support level at 1.0165 will invalidate the bullish view.

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The pair will likely keep rising keep falling as bears target the next key support level at 0.7120.

Bearish View

• Sell the AUD/USD pair and set a take-profit at 0.7140.
• Add a stop-loss at 0.7250.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 0.7240 and a take-profit at 0.7300.
• Add a stop-loss at 0.7170.

The AUD/USD pair is in a tight range ahead of the upcoming American consumer inflation data and as commodity prices keep rising. It is trading at 0.7192, where it has been in the past few days. This price is slightly below the highest point this month.

Inflation Data Ahead

The AUD/USD pair has moved sideways in the past few days even after the Reserve Bank of Australia (RBA) caught many investors by surprise. In its decision this week, the bank decided to hike interest rates by 0.50% for the first time in two decades. The bank also hinted that it will continue hiking interest rates in the coming months.

Still, analysts believe that Australia’s inflation will continue rising as the cost of energy remains at elevated levels. In a statement, former RBA governor, Ian MacFarlane said that inflation will likely not drop to the neutral point at 2%. Instead, he believes that it will rise to 8% and then settle at about 5%.

Meanwhile, the AUD/USD pair is reacting to the rising commodity prices. The Bloomberg Commodity Index (BCOM) rose to $136, helped by oil and gas prices. Other commodities that Australia sells like coal and copper have all surged in the past few days. Higher commodity prices are usually beneficial to the Australian economy.

The next key driver for the AUD/USD pair will be the upcoming US inflation data that are scheduled on Friday. Economists expect the data to show that the country’s inflation declined slightly from 8.3% to 8.2% while core inflation declined from 6.2% to 5.9%.

American bond yields have risen ahead of these numbers. The 10-year yield has risen to 3.03% while the 30-year and 5-year yields rose to 3.18% and 3.04%.

AUD/USD Forecast

The 4H chart shows that the AUD/USD pair formed an ascending channel shown in black. The pair is slightly below the lower side of the ascending channel. It is also moved along the 25-period and 50-period moving averages and is between the 23.6% and 38.2% Fibonacci retracement levels. Further, the price has moved to the Ichimoku cloud.

Therefore, the pair will likely keep rising keep falling as bears target the next key support level at 0.7120. A move above the resistance at 0.7230 will invalidate the bearish view.

The pair will likely have a bearish breakout ahead of the upcoming US jobs data. 

Bearish View

• Sell the AUD/USD pair and set a take-profit at 0.7125.
• Add a stop-loss at 0.7245.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 0.7220 and a take-profit at 0.7300.
• Add a stop-loss at 0.7150.

The AUD/USD pair remained in a tight range after the positive Australian economic numbers. The pair is trading at 0.7165, which is slightly below this week’s high of 0.88%. It has risen by more than 5% from its lowest level in May.

Australia Economic Recovery

The Australian economy is doing relatively well helped by the country’s reopening and the relatively high commodity prices.

According to the statistics agency, Australia’s economy expanded by 0.8% on a QoQ basis in the first quarter. This recovery was lower than the previous 3.6% and better than the median estimate of 0.5%.

As a result, the country’s economy rose by 3.3% on a year-on-year basis. Also, this growth was lower than the previous 4.4%.

This recovery was broad-based as the final consumption increased by 1.9% while capital expenditure rose by 0.7%.

Analysts expect that the recovery will continue, helped by the resurgent services sector. In the past few months, the number of tourist arrivals in the country has been in a strong growth.

Focus now shifts to the Reserve Bank of Australia (RBA), which will start its monthly meeting on Monday. With the election done, analysts expect that the bank will hike interest rates by another 0.25% as it continues its battle against inflation.

The AUD/USD is also reacting to the ongoing reopening in China. Authorities in Shanghai have decided to start unwinding the lockdowns that happened in the past few months. This unwinding is positive for Australia, which sells most of its products in China.

The pair will also react to the upcoming US non-farm payroll numbers. The data is expected to show that the economy added more than 300k jobs while wage growth continued by over 5.2%.

AUD/USD Forecast

The AUD/USD pair remained a tight ranget in the overnight session. It is trading at 0.7178, which was slightly below this week’s high of 0.7234. It is still consolidating between the ascending channel. Also, it is slightly above the 38.2% Fibonacci Retracement level while the MACD has moved above the neutral level.

Therefore, the pair will likely have a bearish breakout ahead of the upcoming US jobs data. This means that the pair will likely retest the support at 0.7100.

There is a likelihood that the pair will continue falling as bears target the next key support at 1.0700.

Bearish View

• Sell the EUR/USD pair and set a take-profit at 1.0720.
• Add a stop-loss at 1.0850.
• Timeline: 1 day.

Bullish View

• Set a buy-stop at 1.0840 and a take-profit at 1.0900.
• Add a stop-loss at 1.07200.

The EUR/USD price remained in a tight range on Monday and Tuesday morning as the market reflected on the rising bond yields. The pair also wavered after signs showed that the Chinese economy was slowing down. It is trading at 1.0778, which was also the lowest level on March 7th.

Rising US Bond Yields

The EUR/USD pair remained under pressure as investors focused on activities in the bond market. The bond sell-off continued as investors priced in more tightening by the Federal Reserve. As a result, the yield of the 10-year rose to 2.83% while the 30-year and 2-year rose to 2.93% and 2.46%, respectively.

These were the highest they have been in a few years. The performance of the bond market is mostly because of the ongoing thinking that the Federal Reserve will be more aggressive in the coming month. Investors expect that the Fed will hike interest rates by 0.50% in its meeting in May.

The EUR/USD has therefore declined because of the divergence between the Fed and the European Central Bank (ECB). In its meeting last week, the ECB signaled that it will continue winding down its asset purchases. It will then start hiking interest rates in the third or fourth quarter.

The euro is also falling as the uncertainty of the European economy remains. With the crisis in Ukraine continuing, there are expectations that the economy will retreat. For one, the EU has made plans to end importing oil from Russia and there are hopes that it will stop importing natural gas.

The economic calendar will be a bit muted today. The key economic data to watch will be the latest US housing starts and building permits numbers. Economists expect that the number of building permits declined from 1.865 million to 1.825 million. They also see the housing starts falling from 1.79 million to 1.745 million.

EUR/USD Forecast

The EUR/USD pair has been in a strong sell-off in the past few months. It has dropped by about 6% from its highest level in February. The pair has moved slightly below the 15-period and 25-period moving averages, which is a signal that bears are in control. The pair is also trading at the same level as its lowest point on March 7th.

Therefore, there is a likelihood that the pair will continue falling as bears target the next key support at 1.0700. A move above the resistance at 1.085 will signal that there are mor buyers in the market.