Topic: Trade Bitcoin with FreshForex - page 3. (Read 3998 times)

The USD/JPY pair is fluctuating in a narrow range in the Asian session on Friday, consolidating its weekly rise to its highest level since 19 August, reached the previous day. Spot prices are currently trading below 147.00, unchanged for the day, as traders prefer to stay on the sidelines ahead of the release of important monthly US employment data.

The US Non-Farm Payrolls (NFP) report is expected to show that the country added 140,000 jobs in September, down slightly from 142,000 in the previous month, while the unemployment rate remained unchanged at 4.2%. In addition, average hourly earnings will be looked at to determine the size of the rate cut by the Federal Reserve (Fed) at its next meeting in November. This, in turn, will play a key role in fuelling demand for the US Dollar (USD) and provide a meaningful boost to the USD/JPY pair.

Ahead of the key data release, investors lowered bets on more aggressive Fed policy easing amid signs of a still resilient US labour market. This sent the US Dollar Index (DXY), which tracks the dollar against a basket of currencies, to a one-month high on Thursday. In addition, lower bets for a Bank of Japan rate hike in 2024 as well as political uncertainty ahead of Japan's snap election on 27 October could undermine the Japanese Yen (JPY) and serve as a tailwind for the USD/JPY pair.

Nevertheless, spot prices continue to rise for the second week in the last three, and if the US employment data does not offer any negative surprises, the fundamental backdrop supports the prospects for further gains. At the same time, persistent geopolitical risks associated with ongoing conflicts in the Middle East and the risk of a full-scale war in the region may favour the yen. This may prove to be the only factor restraining bullish traders from aggressive bets on USD/JPY.

Trading recommendation: Trade predominantly with Buy orders from the current price level

The GBP/USD pair saw a further decline during the early Asian session on Thursday, reaching the 1.3265 level. The renewed demand for the US dollar (USD) amid rising geopolitical tensions in the Middle East provides some support for the major pair. On Thursday, market participants will be monitoring the September ISM Services Purchasing Managers' Index (PMI), weekly initial jobless claims and the final PMI from S&P Global Services.

On Tuesday, Iran launched over 180 rockets at Israel, marking the largest direct strike on the country to date. Israel and the United States have vowed to take action in response to the attack. The conflict in the region is intensifying, with fears of a wider war boosting safe-haven flows and favouring the US dollar against the pound sterling (GBP).

The ADP US employment change data for September exceeded expectations, with 143,000 new jobs created. The figure exceeded the median forecast of 120,000 and the revised August figure of 103,000. On Friday, attention will shift to US employment data in search of new market-moving information.

Trading recommendation: Trading predominantly Sell y orders from the current price level.

The EUR/USD pair is trading slightly higher around 1.1070 during Asian trading hours on Wednesday. Meanwhile, any signs of rising geopolitical tensions in the Middle East could weigh on risky assets such as the euro (EUR).

Traders are still assessing the likelihood of a sharp rate cut by the US Federal Reserve (Fed) in November after Fed Chairman Jerome Powell said that the US central bank is in no hurry and will lower the benchmark rate “over time”. Financial markets now estimate the probability of a 50 basis point (bps) rate cut in November at nearly 37.4%, while the probability of a 25 bps rate cut is 62.6%, according to CME FedWatch Tool data.

Unfavorable economic data from the U.S. on Tuesday undermined the dollar. The US manufacturing PMI from ISM was unchanged at 47.2 in September, weaker than expectations of 47.5. The report pointed to a continued contraction in the US manufacturing sector.

Eurozone inflation declined in September, falling below the European Central Bank's (ECB) target level. The harmonized consumer price index (HICP) rose 1.8% in September, down from 2.2% in August, Eurostat said on Tuesday. The figure was the lowest since April 2021. The eurozone economy may not be out of the woods yet, even despite encouraging inflation data for September. The ECB cut interest rates to 3.50% in September and has also hinted that another cut may be in the near future.

Fears of an expanding war in the Middle East could put pressure on the common currency and boost safe-haven assets such as the U.S. dollar. Iran launched more than 200 ballistic missiles at Israel on Tuesday, and Prime Minister Benjamin Netanyahu vowed to retaliate against Iran for the missile attack.

Trading recommendation: Watch the level of 1.1070, if the level is fixed above consider Buy positions, if the level rebounds consider Sell positions.

The USD/JPY pair is building on an overnight good bounce from the 141.60 area, or near two-week lows, and gaining momentum for the second day in a row on Tuesday. The upward movement takes spot prices above 144.00 during the Asian session and is supported by a combination of factors.

The US Dollar (USD) is receiving support from Federal Reserve (Fed) Chairman Jerome Powell's relatively hawkish tone on Monday, which prompted investors to cut bets on another excessive rate cut in November. The Japanese Yen (JPY), on the other hand, remains on the defensive amid comments from Japan's new Prime Minister Shigeru Ishiba, who said that the Bank of Japan's (BoJ) monetary policy must remain accommodative to support the fragile economic recovery.

In addition, Ishiba said on Monday that he intends to call a general election for 27 October. Furthermore, bullish sentiment in global financial markets is undermining demand for the safe-haven Yen and serving as a tailwind for the USD/JPY pair. Bulls on the Japanese Yen remained on the sidelines after the Bank of Japan's September meeting released a summary of views that the central bank will adjust its accommodative stance if economic conditions improve.

In terms of economic data, Japan's unemployment rate fell more than expected to 2.5 per cent in August from 2.7 per cent in the previous month. In addition, the Bank of Japan's closely watched Tankan survey showed that sentiment among large Japanese manufacturers was stable in the three months to September, while sentiment among large non-manufacturers improved slightly. Nevertheless, this did not provide a boost to the Japanese Yen or the USD/JPY pair, supporting the outlook for further intraday gains.

Market participants now turn their attention to the economic agenda in the US, where ISM manufacturing PMI data and JOLTS job openings data will be released. These data, along with speeches of influential FOMC members, will stimulate demand for the dollar and create opportunities for short-term trading on the USD/JPY pair. In addition, important US macroeconomic releases scheduled for the beginning of the new month, including the Nonfarm Payrolls (NFP) report, should determine the next stage of directional movement.

Trading recommendation: Trade predominantly with Buy orders from the current price level

The GBP/USD currency pair is trading at around 1.3385 in the early Asian session on Monday. The prospect of further interest rate cuts by the Federal Reserve (Fed) and a less dovish stance from the Bank of England (BoE) is providing some support to the major pair. The Federal Reserve's Chair, Michelle Bowman, is scheduled to deliver a speech later today.

US inflation has reached a rate close to the Fed's 2% target. The US Bureau of Economic Analysis (BEA) reported on Friday that the headline personal consumption expenditure (PCE) price index rose 2.2% year-on-year in August, up from 2.5% in July. The figure was below the estimated 2.3% level. The core PCE index increased by 2.7% in August, in line with expectations.

On a monthly basis, the PCE price index showed a 0.1% increase over the same period. The CME FedWatch Tool data indicates that the probability of a half-point rate cut in November is nearly 54%, while the probability of a quarter-point cut is 46%.

The appreciation of the pound sterling (GBP) is supported by the expectation that the Bank of England's rate cut cycle will be slower than in the US. This, in turn, serves as a positive factor for GBP/USD. In the absence of significant economic data releases in the UK this week, market expectations regarding the Bank of England's monetary policy actions for the remainder of the year will influence the GBP.

Trading recommendation: Trading predominantly Buy orders from the current price level.

On Thursday, the EUR/USD returned to its highest point since the market sell-off in the dollar gained momentum. The release of better-than-expected data from the US has helped to allay concerns about a possible slowdown in the US economy.

Despite a slight easing of recession fears, the US economy is still facing challenges, with key activity indicators showing a decline. Friday will present one final challenge for those monitoring economic data. The release of Personal Consumption Expenditure (PCE) inflation data in the final trading session of the week could have a significant impact on the market if it fails to meet expectations.

In Europe, the EU confidence figures are also scheduled for release on Friday. However, most of these indexed surveys are anticipated to remain consistent with previous readings. Euro traders are particularly focused on the release of European inflation data for September, scheduled for next Tuesday.

The recent decision by the US Federal Reserve to cut interest rates by 50 basis points prompted concerns in global markets, with some investors questioning whether such a drastic move was a reaction to the looming economic slowdown in the US. However, Fed Chairman Jerome Powell clarified that the rate cut was a preemptive measure designed to bolster the US labour market, rather than a reaction to indications of recession.

The positive data on US durable goods orders and weekly initial jobless claims further reinforced the Fed's position, with both figures exceeding expectations. The narrative of a 'soft landing' for the economy remained intact. The upcoming release of Personal Consumption Expenditure (PCE) inflation data on Friday will be a crucial indicator of the impact of the Fed's recent rate cut.

US Durable Goods Orders in August remained unchanged from the previous month, falling short of the previous month's strong increase but still outperforming the projected 2.6% contraction. Additionally, initial jobless claims for the week ending 20 September decreased to 218,000, exceeding the projected 225,000 and indicating a reduction from the previous week's revised 222,000.

Trade recommendation: Trading predominantly Buy orders from the current price level.

The Japanese Yen (JPY) remains depreciated against the US Dollar (USD) following the release of the minutes from the Bank of Japan's (BoJ) July policy meeting on Thursday. The yen faces challenges as traders expect the BoJ to ponder before further rate hikes.

The minutes of the BoJ's monetary policy meeting expressed a general view among members on the importance of remaining vigilant on the risks of inflation exceeding targets. Several members indicated that raising rates to 0.25 percent would be an appropriate way to adjust the level of monetary support. Some others suggested that a moderate adjustment in monetary support would also be appropriate.

Pressure on the U.S. dollar is being exerted by the increased likelihood of further interest rate cuts by the U.S. Federal Reserve (Fed) at upcoming meetings. According to CME FedWatch Tool, markets estimate the probability that the Fed will cut rates by 75 basis points to a range of 4.0-4.25% by the end of this year at around 50%.

Traders' attention is now focused on the release of final annualized U.S. gross domestic product (GDP) data for the second quarter (Q2), due later in the day. On Friday, inflation data will be released in Tokyo, which could provide further insight into the economic outlook and possible monetary policy moves by the Bank of Japan.

Trading recommendation: Trading predominantly Sell orders from the current price level.

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GBP/USD continued to rally the Pound for the second day in a row, breaking above 1.3400 and hitting new 30-month highs after the US Dollar weakened significantly on Tuesday.

Wednesday will be quiet for the Pound in terms of data, although traders will be keeping an eye on statements from Bank of England Monetary Policy Committee (MPC) member Megan Green. MPC member Green will be speaking at the North East England Chamber of Commerce.

The U.S. portion of Wednesday's economic data list is also underweight for the midweek market session. August's monthly new home sales figure is unlikely to have much momentum one way or the other, followed by a speech from Federal Reserve Board of Governors (Fed) member Adrian Kugler, who will speak at Harvard's Kennedy School in Cambridge.

Consumer confidence deteriorated across the board on Tuesday, with consumer expectations for 12-month inflation accelerating to 5.2 per cent. Consumers also reported a general weakening in their six-month outlook for household financial conditions, and consumer assessments of overall business conditions turned negative.

The pullback in consumer confidence results triggered renewed trading in the rates markets in favour of a subsequent sharp rate cut in November. According to the CME's FedWatch tool, rates markets are pricing in nearly 60% probability of a second 50 bps rate cut. 7 November and only a 40% probability of a more reasonable subsequent 25bp rate cut. Earlier in the week, traders were estimating roughly equal odds of a 50bp or 25bp rate cut.

Trading recommendation: Trade predominantly with Buy orders from the current price level

The EUR/USD exchange rate saw a modest decline of 0.5% on Monday, indicating a loss of recent bullish momentum. The Fib declined on one of the most challenging trading days of the second half of the year, following the release of EU Purchasing Managers' Index (PMI) data that fell short of expectations and US PMI data that showed only slight improvement.

Tuesday will be a relatively quiet day for EUR/USD, with minimal data releases anticipated on either side of the Atlantic. However, there is expected to be a speech from Federal Reserve (Fed) Governor Michelle Bowman.

Despite the dollar's general weakening following the Fed's surprise double rate cut last week, negative market sentiment towards the euro is preventing gains in the EUR/USD.

The September S&P US Manufacturing PMI declined to 47.0 m/m, reaching its lowest level since July 2023. This is indicative of the persisting gloomy outlook for business activity in the US manufacturing sector. In contrast, the S&P US Services PMI Purchasing Managers' Index declined to 55.4 in September, down from 55.7 in August. However, this figure exceeded the projected 55.2.

Austan Goolsbee, a policymaker at the Federal Reserve Bank of Chicago and President of the Chicago Fed, made comments on Monday that had a chilling effect on the markets. He noted that the Fed may have to make further rate moves to keep business credit conditions liquid enough to keep the keel on U.S. business as record tightness in the U.S. labour market winds down.

Trade recommendation: Trading predominantly Buy orders from the current price level.

The Japanese Yen (JPY) continues to lose ground for the third consecutive session on Monday in trading diluted by holidays. This downward movement could be influenced by growing concerns that the Bank of Japan (BoJ) is in no hurry to raise interest rates.

The BoJ kept its interest rate target range of 0.15-0.25% at its meeting on Friday. BoJ Governor Kazuo Ueda emphasized that the central bank “will continue to adjust the level of monetary policy easing as necessary to achieve our economic and inflation targets.” Ueda recognized that while Japan's economy is showing a moderate recovery, there are still signs of weakness.

The US dollar (USD) continues to rise as Treasury yields recover their losses. However, the dollar could face challenges due to growing expectations of additional rate cuts by the U.S. Federal Reserve (Fed) in 2024. According to the CME FedWatch Tool, markets are pricing in a 50 percent chance of a 50 basis point rate cut to a range of 4.0-4.25 percent by the end of this year.

Trading recommendation: Watch the level of 144.00, if the level is fixed below consider Sell position, if the level rebounds consider Buy position.

On Thursday, the GBP/USD currency pair reached a new 30-month high. A significant decline in the value of the US dollar prompted a risk-averse response in the cable market, resulting in a notable strengthening of the British pound. The Federal Reserve's (Fed) 50bp rate cut this week has prompted a risk-on stance across global markets, while the Bank of England's (BoE) concerns over rate retention have not resulted in a further strengthening of the Pound.

The only significant indicator on Friday will be UK retail sales for August, but it is unlikely to have a significant impact as investors are fatigued following the dual central bankers – the Fed and the Bank of England. Analysts anticipate a slight decline in UK retail sales for August, with a projected decrease from the previous reading of 0.5% to 0.4%. The annual figure is expected to remain at 1.4%.

On Thursday, the Bank of England voted seven to one in favour of maintaining interest rates at 5.0%, as expected. The Bank of England initiated a reduction in interest rates earlier in the summer, lowering them by a quarter point at its most recent meeting. However, this action may have been premature. Bank of England policymakers are awaiting further evidence of the UK economy's performance before making any further adjustments to interest rates.

In the US, initial jobless claims for the week ending 13 September fell to 219,000, down from the previous week's revised 231,000 and below the median market forecast of 230,000. The latest manufacturing activity survey from the Philadelphia Fed for September also exceeded expectations, with the manufacturing conditions index rising to 1.7 from the previous seven-month low of -7.0 and well above the -1.0 forecast.

In a statement to the markets, Fed Chairman Jerome Powell asserted that the 50bp rate cut implemented by the Fed this week was not a hasty reaction to deteriorating economic conditions. Instead, Powell explained that the move was an attempt to proactively support the US labour market. Powell was successful in suggesting that a rate cut of up to 0.5% should be renamed a 'recalibration'. Investors rewarded the Fed's latest strategy by investing in riskier assets and reducing their holdings of the safe-haven US dollar.

Trading recommendation: Trading predominantly Buy orders from the current price level.

Since March 2024, we've witnessed a significant decline in the cryptocurrency market. During this time, the price of Bitcoin (BTCUSD) has dropped by 20-30%, and many altcoins have lost 50-70%, retesting the lows of June 2022. Market participants, especially those who bought at March highs, are growing nervous, with many questioning the future of cryptocurrencies as an investment class.

However, this correction is normal in terms of market cycles and historical metrics. Moreover, U.S. presidential candidates are using the crypto market as a key element of their campaigns. This could temporarily hold back crypto growth, allowing the winning candidate to claim future successes.

Looking closer, several powerful factors are supporting the prospects of a crypto market rebound:

* Political context: The 2024 U.S. presidential election is in full swing, and both leading candidates are focusing on blockchain technology and cryptocurrencies. This creates a favorable environment for renewed interest in crypto as an investment tool. Campaign promises and discussions around supporting blockchain could stimulate interest among both private and institutional investors, potentially driving cryptocurrency growth.
* U.S. interest rate cuts: On September 18, the Federal Reserve lowered the key rate to a range of 4.75–5%, marking the first reduction since March 2020. This move aligns with market expectations but decreases the appeal of traditional financial instruments like bonds due to their lower yields. In such an environment, investors often seek higher-yielding assets, including cryptocurrencies.
* Bitcoin halving impact: One of the key events influencing Bitcoin's price is halving — the reduction in rewards for mining new blocks. The latest halving occurred in April 2024, and its effects typically appear within 5-8 months. Historically, halving creates a supply shortage, driving up Bitcoin prices. With Q4 2024 coinciding with this period, Bitcoin could surpass previous highs, potentially boosting other altcoins as well.

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The EUR/USD currency pair reached a new high for September following the Federal Reserve's (the Fed) unexpected decision to cut interest rates by 50 basis points on Wednesday. This development has boosted risk appetite and prompted traders to adopt a more bullish stance. This is the first occasion on which the Federal Reserve has reduced interest rates for a period of four years.

The Federal Open Market Committee's (FOMC) dot plot of aggregate economic forecasts was also revised downwards from the Fed's previous rate forecast. The median expectation of the Federal Reserve is that the federal funds rate will be 4.4% by the end of 2024 and 3.4% by the end of 2025. This is a reduction from the previous forecasts of 5.1% and 4.1%, respectively.

A closer examination of the Fed's notes reveals that the central bank now anticipates U.S. gross domestic product (GDP) growth of 2.0% through 2024, a downward revision from the previous 2.1% figure released in June. Additionally, Fed officials anticipate that the US unemployment rate will reach 4.4% by the end of 2024.

As the Fed finally met the expectations of the market, which had been demanding a rate cut since the beginning of the year, global markets turned their attention to the press conference of Fed Chairman Jerome Powell.

Trade recommendation: Trading predominantly Buy orders from the current price level.

The USD/JPY pair saw a fresh wave of selling during the Asian session on Wednesday, with the pair dropping below 142.00 in the last hour. This reversed some of the gains made overnight and paused the recovery from the lowest level since July 2023, which was reached earlier in the week. Meanwhile, fundamental analysis indicates that the most probable outcome for spot prices is a decline, although market participants may exercise caution in placing aggressive wagers ahead of pivotal central bank events.

The Federal Reserve (Fed) will announce its decision following its two-day meeting on Wednesday, with expectations that it will commence its policy easing cycle. The market will then turn its attention to the Bank of Japan's (BoJ) policy update on Friday, which will play a pivotal role in influencing the Japanese Yen (JPY) and provide fresh impetus to the USD/JPY pair. Meanwhile, cautious market sentiment and diverging expectations of future policy from the Fed and BoJ are driving safe-haven flows towards the JPY, exerting downward pressure on the USD/JPY.

The market is pricing in the likelihood of a 50 basis point interest rate cut by the Federal Reserve, amid signs of easing inflationary pressures. This has the effect of overshadowing Tuesday's better-than-expected US retail sales data, which is not helpful for the US dollar (USD) in consolidating an overnight rebound from the 2024 low. Conversely, recent indications from Bank of Japan officials point towards a further interest rate increase by the Japanese central bank before the end of the year. This has been a significant contributing factor to the recent relative rise in the Japanese Yen, which has helped to create a favourable tone around the USD/JPY pair.

Meanwhile, the JPY bulls appeared to remain undaunted by Japan's trade data for August, which revealed a notable decline in both exports and imports. Official data indicates that Japan's exports have risen for the ninth consecutive month, with an increase of 5.6% year-on-year in August. However, this growth is occurring at a slower pace than anticipated. This was accompanied by a much smaller-than-expected 2.3% rise in imports, which had little impact on the underlying bullish sentiment around the Japanese Yen. This indicates that the outlook for the USD/JPY pair in the near term is negative and supports the likelihood of a continuation of the recent downtrend.

Trade recommendation: Trading mainly by Sell orders from the current price level.

The GBP/USD pair reached a high on a relatively quiet Monday, marking the start of the new trading week with a renewed bullish sentiment and a move back towards 1.3200. Investor sentiment remains positive as markets anticipate significant central bank speeches this week, with a potential rate cut by the Federal Reserve and another Bank of England (BoE) speech widely expected.

The US retail sales figures are scheduled for release on Tuesday, but the key indicator, which typically causes some volatility, is not expected to have a significant impact this week unless the data deviates significantly from expectations. The month-on-month retail sales growth for August is forecast to decelerate to 0.2% from July's 1.0%, while the underlying month-on-month retail sales figure (excluding auto purchases) is expected to slow to 0.3% from 0.4%.

In the UK, the latest Consumer Price Index (CPI) data will be released at the start of Wednesday. It is anticipated that the annualised figure for August will remain at 2.2% year-on-year. As with US retail sales, the standalone figure is not expected to have a significant impact on the market as long as it falls within a reasonable range of average market forecasts.

Investors anticipate that the Federal Reserve will commence a new cycle of interest rate reductions on Wednesday. The key issue now is not when this will occur, but rather the extent of the cuts. CME's FedWatch tool indicates that traders anticipate a 60% probability of a 50 bp reduction in the federal funds rate, with the remaining 40% expecting a more modest 25 bp cut. Betting markets also estimate an overall rate cut of 125-150 bps by the end of the year, with traders believing there is about an 80% chance of the Fed funds rate reaching 400-425 bps by 18 December, compared to the current interest rate of 525-550.

The Bank of England will also issue its own rate statement on Thursday, but it is anticipated to be considerably less noteworthy than the Fed's statement. It is anticipated that the Bank of England will maintain its principal discount rate at 5.0% this week. Additionally, the Monetary Policy Committee (MPC) is expected to vote in favour of maintaining the rate at seven to two, in contrast to the previous Bank of England meeting where a vote was cast to cut the rate by a quarter point, resulting in a five to four outcome.

Trading recommendation: We follow the level of 1.3200, when fixing above it we take Buy positions, when rebounding we take Sell positions.

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The EUR/USD currency pair commenced the week on a positive note, rising to the 1.1090 level during the Asian trading session on Monday. Investors are now awaiting the US Federal Reserve's (the Fed) decision, which is expected later this week. There is still no consensus among market participants as to whether the Federal Reserve will cut interest rates by 25 or 50 basis points.

The CME FedWatch Tool indicates that there is a 48.0% probability of the Federal Reserve cutting rates by 25 basis points at the September meeting. The probability of a 50 basis point rate cut has increased to 52.0%, up from 50.0% a day earlier.

Investors will be monitoring the FOMC press conference closely in order to gain insight into the future trajectory of US interest rates. Should Fed Chairman Jerome Powell announce a more aggressive easing approach, this could exert downward pressure on the US dollar, thereby providing potential momentum for EUR/USD.

European Central Bank (ECB) Governing Council member and Central Bank of Ireland Governor Gabriel Makhlouf stated on Friday that the central bank is still operating in a 'highly uncertain environment' and will rely on data to inform future monetary policy decisions. Mr Makhlouf was keen to stress that the ECB is not committing to a specific rate choice, but remains 'determined to ensure' that eurozone inflation returns to the 2% target 'in a timely manner'.

The latest research from Rabobank highlights that the ECB announced a second rate cut in this cycle last week, with another cut expected before the end of the year. The latest ECB staff forecasts also reflect a downward revision to eurozone growth. While expectations of Fed policy easing may weaken the US dollar, Rabobank believes that unfavourable eurozone fundamentals are likely to limit EUR/USD's upside potential in the near term.

Trade recommendation: We follow the level of 1.1100, when fixing above it we take Buy positions, when rebounding we take Sell positions.

The USD/JPY pair weakened further below the mid 141.00s during the Asian session on Friday and is now back closer to the YTD low reached earlier this week. Moreover, the fundamental backdrop seems to be leaning in favor of bearish traders and supports the prospects of a continuation of the established downtrend seen over the past two months.

The US Dollar (USD) fell to a fresh weekly low amid rising bets for more aggressive Federal Reserve (Fed) policy easing next week, bolstered by the release of a softer-than-expected US Producer Price Index (PPI) on Wednesday. In fact, markets are now pricing in a more than 40% probability that the US central bank will cut borrowing costs by 50 basis points at the end of its September meeting. This keeps US Treasury yields near 2024 lows, which puts pressure on the dollar and leads to a decline in the USD/JPY pair.

The Japanese Yen (JPY), on the other hand, continues to receive support from hawkish signals from the Bank of Japan (BoJ) indicating that it will raise interest rates further if the economic outlook matches forecasts. Moreover, BoJ board member Naoki Tamura said on Thursday that the road to ending soft policy is still very long. This represents a significant divergence from dovish Fed expectations, which in turn encourages further pullback in Japanese Yen (JPY) and contributes to the tone of the USD/JPY pair.

The aforementioned fundamental backdrop indicates that the path of least resistance for spot prices remains to the downside, although traders may prefer to move sideways ahead of a key central bank event that could occur next week. The Fed is due to announce its decision at the end of its two-day meeting next Wednesday. This will be followed by the BOJ's policy update on Friday, which will determine the next leg of directional movement for the USD/JPY pair. Nevertheless, the pair remains on track to end the second week in the negative.

Trading recommendation: Trade predominantly with Sell orders from the current price level.

The EUR/USD pair struggled to gain momentum during the Asian session on Thursday and fluctuated in a narrow range, just above the psychological 1.1000 mark, or the four-week low reached the previous day. Traders, prefer to wait for the much-anticipated European Central Bank (ECB) meeting before positioning themselves for the next leg of directional movement.

The ECB is widely expected to cut interest rates by 25 basis points (bps) amid signs that Eurozone inflation is cooling. The bets were supported by data that Germany's consumer price (CP) index fell to its lowest level in three years in August and touched the ECB's 2% target. This in turn undermined the common currency and acted as a headwind for EUR/USD amid moderate strength in the US Dollar (USD).

The US CPI report released on Wednesday showed that US consumer prices are generally declining. However, the core CPI indicates that underlying inflation remains resilient and dashes hopes of a larger rate cut by the Federal Reserve (Fed) next week. This is underpinned by a rise in US Treasury bond yields and brings the Dollar Index (DXY), which tracks the quid against a basket of currencies, to a one-month peak.

At the same time, the markets fully appreciated the prospects of the Fed easing cycle and a 25 bps rate cut following the FOMC meeting on 17-18 September. This, along with the optimistic market sentiment, has restrained further strengthening of the safe-haven US Dollar. This should continue to provide some support for EUR/USD ahead of a key central bank risk event and warrants caution from bearish traders.

Investors may also prefer to wait for the ECB's updated economic forecasts, which, along with Christine Lagarde's comments, will have an impact on the EUR exchange rate. In addition, the publication of the US Producer Price Index (PPI) could provide fresh impetus to EUR/USD and create some meaningful trading opportunities later in the North American session.

Trading recommendation: Trade predominantly with Sell orders from the current price level