Currency Analysis and Technical Outlook (1-Hour Chart) – September 18, 2024
USD/JPY: Strong Sell
The USD/JPY pair is attempting to break below 141.35, facing pressure on dollar positions ahead of the Federal Reserve meeting results. Recently, the likelihood of a 50 basis point rate cut has rapidly increased, reaching 67.0% according to the CME FedWatch Tool. Mixed data on Japan’s machinery orders and trade balance is influencing sentiment, but no further tightening of policy from the Bank of Japan (BoJ) is expected.
EUR/USD: Buy
The EUR/USD pair is showing a weak upward trend, recovering from yesterday’s decline. It is currently testing a breakout at 1.1120 as investors await the results of the two-day Federal Reserve meeting, scheduled for today at 20:00 (GMT+2). While investors expect at least a 25 basis point cut, the probability of a 50 basis point cut has risen to 67.0%. U.S. retail sales growth sharply declined from 1.1% to 0.1% in August, coming in below expectations. Meanwhile, Germany’s economic sentiment index fell short of forecasts, putting pressure on the euro.
GBP/USD: Buy
The GBP/USD pair is trading around 1.3160 with little directional movement. Investors are focused on the Bank of England (BoE) meeting scheduled for this Thursday. The August Consumer Price Index (CPI) increased by 0.3% month-on-month, maintaining a year-on-year rate of 2.2%, while core CPI rose to 3.6%, exceeding expectations. Expectations for a 50 basis point cut from the Fed are contributing to predictions of further cuts later this year.
AUD/USD: Buy
The AUD/USD pair is trading around 0.6750 and showing mixed movements as it awaits the Fed meeting results. A 25 or 50 basis point cut is anticipated, with the probability of a more aggressive cut currently at 67.0% according to the CME Group. Attention is also on today’s real estate market data. Australia’s employment data for August is set to be released on Thursday, with a decrease in employment expected.
XAU/USD: Strong Buy
The XAU/USD pair has retreated from this week’s highs as investors await the Fed meeting results. The probability of a 50 basis point cut is estimated at 67.0% according to the CME Group. Additionally, political uncertainty in the U.S. is increasing demand for gold as a safe-haven asset.
