Currency Analysis and Technical Outlook (1-Hour Chart) – September 17, 2024
USD/JPY: Strong Sell
The USD/JPY pair has slightly risen after breaking the July low of 139.57. Expectations for a 50 basis point rate cut in the U.S. have increased, with the CME Group's FedWatch Tool indicating a probability of around 60%. Japan's Tertiary Industry Index rose by 1.4% in July, providing support for the yen, but the Bank of Japan (BoJ) is not expected to change its policy at this week’s meeting.
EUR/USD: Strong Buy
The EUR/USD pair has pulled back from the local high of 1.1120 on September 6. Market participants are awaiting the results of the two-day Federal Reserve (Fed) meeting starting today. Multiple officials, including Fed Chair Jerome Powell, have suggested a potential cut in borrowing costs due to easing inflation and a cooling labor market. Recently, expectations for a 50 basis point cut have risen, with the probability reaching around 60% at the beginning of the week. In the Eurozone, September economic indicators are being released, with Germany's ZEW Economic Sentiment Index expected to decline from 19.2 to 17.1 points.
GBP/USD: Buy
The GBP/USD pair is slightly weakening around 1.3200 and has not been able to break this level. The market is awaiting the outcome of the Fed meeting, with a 59% probability for a 50 basis point cut. Meanwhile, the Bank of England (BoE) has a meeting scheduled for September 19, but no additional monetary easing is expected. The UK Consumer Price Index (CPI) is forecasted to rise to 2.2% year-on-year, with core CPI expected to increase from 3.3% to 3.5%.
NZD/USD: Strong Buy
The NZD/USD pair is showing uncertain declines and has retreated from the high on September 6. The market is focused on the increasing likelihood of a 50 basis point rate cut by the Fed, with probabilities ranging from 55.0% to 59.0% according to the CME Group. Meanwhile, New Zealand's Manufacturing PMI improved from 44.4 to 45.8 points in August, and the Services PMI also showed recovery, but weakness in China’s economic data is suppressing further growth.
XAU/USD: Sell
The XAU/USD pair is trading around 2580.00 with little change. The market's bullish momentum is limited as participants await the results of the Fed meeting. According to the CME Group's FedWatch Tool, there is a 59% probability for a 50 basis point rate cut.