{"id":5981,"date":"2024-09-30T04:33:11","date_gmt":"2024-09-30T04:33:11","guid":{"rendered":"https:\/\/alchemymarkets.com\/?post_type=market_insights&p=5981"},"modified":"2025-05-13T15:25:06","modified_gmt":"2025-05-13T15:25:06","slug":"q4-2024-forex-forecast","status":"publish","type":"market_insights","link":"https:\/\/alchemymarkets.com\/de\/education\/market-insights\/quarterly-forecast\/q4-2024-forex-forecast\/","title":{"rendered":"Q4 Forex Forecast: US Rate Cut Expectations Drive Majors Higher"},"content":{"rendered":"\n

As we enter Q4 of 2024, market participants are bracing for significant movements in the Forex space, driven largely by expectations of further rate cuts from the US Federal Reserve. The key theme in this quarter is the weakening US dollar, as the Fed continues to cut rates in response to slowing inflation and economic growth.<\/p>\n\n\n\n

Central banks all over the world are playing catch up with the US in lowering interest rates to maintain competitive currencies, but the Fed still leads the charge in lowering rates. This is allowing G7 currencies to rise off the back of a weakening dollar. <\/p>\n\n\n\n

Overall, the outlook on most main currencies against the Dollar for Q4 of 2024 appears to be bullish, due to the bearish outlook for the USD.<\/strong><\/p>\n\n\n\n

As of September 2024, the interest rate for the Dollar sits at 4.75% – 5%, which is expected to come down by another 75 bps by the year\u2019s end, reaching 4.00% – 4.25% interest rates.<\/p>\n\n\n\n

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Fedwatch Tool and Its Impact on Q4 2024<\/h2>\n\n\n\n

The Fedwatch Tool <\/strong>\u2014 a crucial market indicator provided by the CME Group \u2014 gives us insight into the likelihood of US Federal Reserve rate decisions.<\/p>\n\n\n\n

As we move into Q4, the tool shows a clear expectation for additional cuts, with the consensus leaning towards a 50, then 25 basis point reduction at the November and December meetings respectively.<\/p>\n\n\n\n

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Source: FedWatch Tool, CME Group<\/a><\/p>\n\n\n\n

As of Q4 2024, the Fedwatch Tool shows a strong expectation for continued rate cuts through the end of the year. The consensus is that the Fed will lower rates by 25 to 50 basis points in the upcoming November and December meetings, bringing rates down to 4.00% – 4.25% by the end of the year.<\/p>\n\n\n\n

This anticipated easing is exerting bearish pressure on the US Dollar, and by extension, influencing G7 currencies to move higher against the US dollar.<\/p>\n\n\n\n

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DXY (US Dollar Strength Index) Q4 Forecast<\/h2>\n\n\n\n
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Thanks to the Fed’s rate cuts, we expect the DXY to continue trending down. These rate cut announcements are coming after a bearish break of the triangle pattern<\/strong><\/a>, formed from June 2023 to August 2024.<\/p>\n\n\n\n

Taking the peaks of the triangle at 107.337, and the lows of the triangle at 99.477, the bearish breakout target suggests that the index might drop towards 94.67<\/strong>, aligning with the 2022 Lows<\/strong>.<\/p>\n\n\n\n

Currently, the DXY is hovering around its December 2023 pivot low<\/strong>. Should the index close below this level on a weekly basis, a further decline towards 99.477 becomes more probable. <\/p>\n\n\n\n

Conversely, a reversal in the DXY would require a break above the 20-week EMA<\/strong><\/a> and a breach of its 2024 highs<\/strong>. But until that happens, expect more bearish pressure on the greenback.<\/p>\n\n\n\n

USDJPY Q4 Forecast<\/h2>\n\n\n\n
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<\/div>Volume Profile:<\/span>\u00a0<\/span>Drawn from January 2023, where the price of USDJPY began its crawl up to the \u00a5160 region. The point of control represents the price level with the highest recorded trading volume.<\/div>\n\n\n\n

The USDJPY pair has entered a critical phase after breaking a 19-month-old trendline<\/strong>. The price is now at a key support level, which has already provided bounce, and could establish a potential range for the Dollar-Yen through the rest of Q4. Conversely, a breakdown here could see prices revisit its 2023 Lows<\/strong>.<\/p>\n\n\n\n

The key support level, the December 2023 Pivot Low<\/strong>, is around \u00a5140.000. If USDJPY holds this level, it could stabilise and rise towards the Point of Control<\/strong> at \u00a5147.572. Beyond the POC, the asset may retest its 19-month trendline, Weekly EMA 20, and 2023 highs, which all align in the \u00a5148.000 – \u00a5151.800 range, likely serving as strong resistance.<\/p>\n\n\n\n

These factors suggest that the pair may trade sideways during Q4, with a range between the December ’23 Pivot Low<\/strong> around \u00a5140 and resistance zones between \u00a5147.500 and \u00a5151.800.<\/p>\n\n\n\n

However, the breakdown of the 19-month trendline is a bearish signal. For the range trade to remain valid, the December ’23 Pivot Low at \u00a5140.232 must hold as support<\/strong>.<\/p>\n\n\n\n

If this level fails, the price could revisit the consolidation zones from May 2022<\/strong>, between approximately \u00a5127.00 and \u00a5130.50, which serve as key support levels. These zones also coincide with the beginning of the 19-month trendline, and 2023 Lows <\/strong>(\u00a5127.075), making them key areas of interest for traders.<\/p>\n\n\n\n

EURUSD Q4 Forecast<\/h2>\n\n\n\n
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<\/div>Volume Profile:<\/span>\u00a0<\/span>Drawn from the 2020 – 2021 highs, where the price of EURUSD began its rapid descent. The point of control represents the price level with the highest recorded trading volume.<\/div>\n\n\n\n

The EURUSD pair is looking strong! It\u2019s sitting above the weekly EMA 20<\/strong>, which is a solid bullish sign, and it recently broke out of a triangle pattern<\/strong>.<\/p>\n\n\n\n

Taking the distance from the highs and lows of the triangle pattern, EURUSD would have a breakout target at its 0.786 Fibonacci Retracement level<\/strong> at $1.17509, drawn from the 2020 – 2021 Highs<\/strong> to the lows at $0.95416. This also aligns with the 2021 <\/strong>Double-Top<\/strong><\/a> neckline <\/strong>at $1.17066.<\/p>\n\n\n\n

That being  said, the most immediate resistance level EURUSD faces is at the 2023 highs<\/strong>, the peak of the triangle pattern. This level also lines up with the 0.618 Fibonacci retracement.<\/strong><\/p>\n\n\n\n

If the pair drops, the $1.08624 level is your line in the sand, as it’s been the Point of Control<\/strong> since 2021, the price level with most trading volume.<\/p>\n\n\n\n

GBPUSD Q4 Forecast<\/h2>\n\n\n\n
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<\/div>Volume Profile:<\/span>\u00a0<\/span>Drawn from the 2021 highs, where the price of GBPUSD began its rapid descent. The point of control represents the price level with the highest recorded trading volume.<\/div>\n\n\n\n

GBPUSD has enjoyed a strong breakout from a triangle pattern, setting the stage for further gains in Q4. The pair bounced off the weekly EMA 20, <\/strong>then subsequently used the 2023 Highs<\/strong> as another support level and surged upwards to test the 0.786 resistance <\/strong>at $1.34204.<\/p>\n\n\n\n

Taking the distance from its triangle peak (2023 Highs)<\/strong> at $1.31432, and its triangle lows (2023 Lows)<\/strong> at $1.18021, a breakout target<\/strong> at approximately $1.40659 would be projected.<\/p>\n\n\n\n

Traders should be mindful of potential resistance at the 2022 highs<\/strong>, which stand in the way of the breakout target, and should be considered as an alternative take profit target. Additionally, if the triangle pattern is drawn from the October \u201823 Pivot Low <\/strong>instead of the 2023 Lows, the pattern\u2019s breakout target would shift to align with the 2022 Highs.<\/p>\n\n\n\n

In the event of a pullback, the Point of Control<\/strong> at $1.27099, October \u201823 Lows <\/strong>at $1.20541, and 2023 Lows <\/strong>at $1.18021 provide strong support, which could help maintain the bullish momentum.<\/p>\n\n\n\n

Given the overall sentiment surrounding the US dollar and the ongoing interest rate cuts, GBPUSD is well-positioned to maintain its upward trajectory.<\/p>\n\n\n\n

USDCAD Q4 Forecast<\/h2>\n\n\n\n
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<\/div>Volume Profile:<\/span>\u00a0<\/span>Drawn from the 2021 Lows, where the price of USDCAD formed a significant pivot low. The point of control represents the price level with the highest recorded trading volume.<\/div>\n\n\n\n

USDCAD remains range-bound as we enter Q4, with key levels offering insight into potential breakout opportunities. On the lower end of the range, we have the 0.382 Fibonacci retracement <\/strong>at $1.32254, while the upper end is capped by the 2023-2024 highs <\/strong>at $1.38991 to $1.39780.<\/p>\n\n\n\n

Drawing a conservative range between its wicks and body closes, USDCAD\u2019s range of movement between 2023 to 2024 is about 650 pips.<\/strong><\/p>\n\n\n\n

If the range breaks towards the upside, the breakout target (up) <\/strong>would align with its 2020 Highs<\/strong> at $1.45602. Traders should look for resistance at the 2024 highs<\/strong>, which could provide a challenge for further bullish movement. Conversely, a breakdown<\/strong> would take the asset to approximately $1.25532.<\/p>\n\n\n\n

AUDUSD Q4 Forecast<\/h2>\n\n\n\n
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<\/div>Volume Profile:<\/span>\u00a0<\/span>Drawn from the significant lows in 2020, the starting point of AUDUSD’s large triangle pattern. The point of control represents the price level with the highest recorded trading volume.<\/div>\n\n\n\n

AUDUSD might be about to break a 13-year trendline<\/strong>, which is pretty exciting!<\/p>\n\n\n\n

The June 2023 Pivot High<\/strong> and the upper triangle trendline pose as resistances, but if AUDUSD can push through, it would open the door to the next level of potential resistance at its 2023 Highs<\/strong> ($0.71577).<\/p>\n\n\n\n

A breakout beyond this level could signal a significant shift in the market, with an extended target that stretches beyond the 2022 Highs <\/strong>($0.76522) and 2021 highs <\/strong>($0.80089).<\/p>\n\n\n\n

It’s important to note that while this breakout would be a strong bullish signal, the target of a 2,450-pip<\/strong> move may not be realised within Q4. Should AUDUSD pull back from resistance, traders can look to the June 2023 Pivot High <\/strong>($0.68996) and Point of Control <\/strong>($0.67058) as key support levels.<\/p>\n\n\n\n

With the Reserve Bank of Australia holding rates steady, and with the Fed scheduled to aggressively cut rates, the interest rate spread is shifting towards AUD’s favour. The Aussie Dollar is looking like a solid currency to hold while the US dollar keeps dropping.<\/p>\n\n\n\n

Read more: <\/strong>RBA Holds Cash Rate Steady at 4.35% Amid Persistent Inflationary Pressures<\/strong><\/a><\/p>\n\n\n\n

NZDUSD Q4 Forecast<\/h2>\n\n\n\n
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<\/div>Volume Profile:<\/span>\u00a0<\/span>Drawn from the 2020 Highs, a significant pivot high for NZDUSD. The point of control represents the price level with the highest recorded trading volume.<\/div>\n\n\n\n

NZDUSD is also in a bullish position as Q4 2024 begins. After breaking out of a triangle pattern that began in 2022, the pair is currently trading above its 20-week EMA<\/strong> and the Point of Control <\/strong>($0.62037), giving it a clear bullish edge.<\/p>\n\n\n\n

The first major resistance lies at the 2023 Highs<\/strong> ($0.65382), with a further potential upside target at the 0.618 Fibonacci retracement <\/strong>($0.67185), which aligns with the 2021 Lows <\/strong>($0.67016).<\/p>\n\n\n\n

If NZDUSD breaks above this level, it could target the 0.786 Fibonacci retracement <\/strong>($0.70463), which lines up nicely with the 2022 Highs <\/strong>($0.70342). This alignment of resistance levels makes these areas critical for traders watching the pair\u2019s momentum.<\/p>\n\n\n\n

On the downside, the Point of Control<\/strong>, around $0.62037<\/strong>, acts as a solid support. This level has seen the most trading volume since 2021 and should offer robust support if revisited again.<\/p>\n\n\n\n

USDCHF Q4 Forecast<\/h2>\n\n\n\n
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<\/div>Volume Profile:<\/span>\u00a0<\/span>Drawn from the 2019 highs, a significant price that USDCHF has not surpassed in 5 years. The point of control represents the price level with the highest recorded trading volume.<\/div>\n\n\n\n

USDCHF is bouncing between 0.8375 and 0.9225 Swiss Francs, represented by its \u201823-\u201924 Lows<\/strong> and 2024 highs<\/strong>. The price is currently below the 20-week EMA<\/strong>, signalling bearish bias. If it can grind higher, it\u2019ll face resistance at the July 2023 Pivot Low<\/strong> (0.85551 Francs) and EMA 20 <\/strong>(0.86842 Francs).<\/p>\n\n\n\n

Ultimately, to shift back into bullish territory, USDCHF would need to break above and regain ground above its 2024 Highs <\/strong>(0.92244 Francs) and Point of Control <\/strong>(0.92457 Francs).<\/p>\n\n\n\n

However, given the lack of intervention or significant policy changes from the Swiss National Bank, USDCHF may struggle to achieve these levels. For now, we should consider the USDCHF price to be trading within a range, and only look for higher or lower targets when a breakout, or breakdown occurs.<\/p>\n\n\n\n

In the event of a breakout (up), the breakout target distance would be equal to USDCHF\u2019s price range from 2023 – 2024 \u2013 this could take the asset up to its 2022 Highs<\/strong> at 1.0058 Francs.<\/p>\n\n\n\n

In the event of a breakdown, USDCHF\u2019s next major low target would be 0.74499. <\/strong>Though not marked on the chart, this level aligns with the asset\u2019s lows last seen in 2011. While such a move would be dramatic, it\u2019s not entirely out of the question, particularly if the dollar remains under sustained pressure.<\/p>\n\n\n\n

Key Takeaways:<\/strong><\/h2>\n\n\n\n