USDJPY, AUDUSD and NZDUSD Forecast: Fed’s Rate Rhetoric Rattles Markets

Key Insights

• USD dips vs. euro, gains on yen post-Powell remarks.
• Yen scrutiny high; intervention eyed.
• Rate hikes hinge on inflation data.
• Consumer data to shape rate outlook.
• Dollar index down to 105.85.

Quick Fundamental Outlook

The U.S. dollar traded bearish against the euro but rose versus the yen, reacting to Fed Chair Jerome Powell’s remarks suggesting further rate hikes if inflation persists. The yen is under scrutiny, near yearly lows against the dollar, with possible intervention looming.

Powell highlighted that the Fed’s rate adequacy to quell inflation is uncertain, hinting at more increases if necessary, supported by improving supply chains. Markets are seeking signs of an end to rate hikes, contingent on incoming data.

Upcoming consumer price and retail sales data could signal the likelihood of future hikes. The dollar index dipped slightly to 105.85, amid a backdrop of declining U.S. consumer sentiment and heightened inflation expectations.

Despite last week’s dovish interpretations of Powell’s comments and weak job figures suggesting a pause in hikes, futures traders still see a chance for a rate increase by January.

USD/JPY Prices Forecast

The USD/JPY pair remains resilient in its uptrend, currently trading around 151.49 with minimal 24-hour movement. The 4-hour chart indicates strong momentum above the pivotal 151.05 mark.

Immediate resistance lies at approximately 151.74, followed by more significant barriers at 152.30 and the psychological round number at 152.87. On the flip side, the currency pair finds immediate support near 151.05, with subsequent cushions at 150.69 and 150.57, respectively.

The Relative Strength Index (RSI) hovers around 66, suggesting bullish sentiment without breaching overbought territory. MACD indicators present a bullish trend, although without specific values provided, we look for the MACD line’s position relative to the signal line for confirmation.

Notably, the price is trading above the 50 EMA at 150.69, reinforcing the short-term bullish narrative. A recent upward channel pattern coupled with a supportive RSI reading hints at continued upside potential, with the possibility of the pair testing higher resistance levels.

In conclusion, the USD/JPY exhibits a bullish demeanor, and the short-term forecast anticipates an approach towards the next resistance threshold, barring any unexpected fundamental shifts.

AUD/USD Prices Forecast

AUD/USD appears to be stabilizing around the 0.6357 level following recent fluctuations. The 4-hour chart presents a consolidation within a broadening formation, suggesting a state of market indecision.

Key price levels to monitor include immediate resistance at 0.6444, with further hurdles at 0.6471 and 0.6522. Support is established at 0.6340, below which lies more substantial floors at 0.6379 and the critical 0.6290 juncture.

The RSI, presently at 36, leans toward oversold conditions, hinting at potential for an upward correction if buying interest returns. The 50 EMA at 0.6399 now acts as a short-term litmus test for directional bias, with the AUD/USD trading just below this level, suggesting a bearish sentiment in the interim.

Chart patterns and candlestick configurations point to a period of consolidation. Given the proximity to the lower bound of the broadening pattern and the RSI positioning, there may be room for a bullish retracement, especially if the pair reclaims ground above the 50 EMA. However, traders should remain cautious as the broader pattern indicates volatility and unpredictability.

Overall, while bearish pressure is evident, the potential for a bounce should not be dismissed in the near term, particularly if supported by improving fundamentals or market sentiment.

NZD/USD Prices Forecast

The NZD/USD pair trades narrowly around 0.5891, with the 4-hour chart showing a potential symmetrical triangle pattern, indicating consolidation. Key resistances lie at 0.5906, 0.5952, and 0.6004, while supports are at 0.5855 and 0.5803. The RSI at 45 suggests a neutral market sentiment, neither overbought nor oversold.

Currently trading just below the 50 EMA at 0.5904, the pair presents a neutral to slightly bearish short-term outlook. However, the price has been making higher lows within the pattern, suggesting underlying buying pressure.

Traders may look for a decisive break out of the triangle for clearer directional bias. A break above the 50 EMA could validate bullish sentiment, potentially leading to testing higher resistances. Conversely, a move below the triangle’s lower boundary could signal bearish continuation.

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