As we head into Friday, September 27, 2024, global markets are positioned for another session that could see heightened volatility, driven by key economic data releases and central bank commentary. The U.S. dollar remains in the spotlight as traders digest the impact of recent U.S. inflation data and jobless claims, while keeping an eye on upcoming insights from the Federal Reserve.
In the currency markets, the EUR/USD pair experienced significant movements, largely driven by mixed economic signals from the Eurozone and the U.S. The euro faces downward pressure as traders continue to weigh concerns over the region’s economic outlook. Meanwhile, U.S. inflation data has sparked fresh speculation over the Federal Reserve’s next steps, adding to volatility.
Meanwhile, the USD/JPY pair exhibited notable price swings, reflecting the impact of declining U.S. Treasury yields and demand for the yen as a safe-haven currency. Traders are closely monitoring Federal Reserve commentary for potential clues on the trajectory of U.S. interest rates.
The GBP/USD pair saw a sharp rally, supported by better-than-expected U.K. economic data. The British pound continues to benefit from optimism around U.K. growth prospects and rising speculation of a hawkish stance from the Bank of England.
EUR/USD
Technicals in Focus
The EUR/USD pair was under pressure, closing near the 1.1168 level after experiencing a sharp decline. The pair’s movements were influenced by mixed U.S. economic data, with traders showing caution ahead of the Federal Reserve’s next move. On the technical side, the MACD indicator has crossed into bearish territory, reflecting growing downward momentum. The Stochastic Oscillator is in oversold territory, suggesting a potential corrective bounce. The 14-day RSI remains neutral, though leaning slightly towards oversold conditions.
Trading Strategy: Neutral to Sell
Sell below 1.1170-1.1150 with targets at 1.1120-1.1090 and 1.1060-1.1030, with a stop loss above 1.1200. Alternatively, consider long positions above 1.1200 with targets of 1.1230-1.1260, with stops below 1.1160.
USD/JPY
Technicals in Focus
The USD/JPY pair experienced significant volatility, trading around the 144.82 level after a session marked by wide price swings. This movement was largely driven by a combination of declining U.S. Treasury yields and demand for the yen as a safe-haven asset. On the technical front, the MACD is showing bearish momentum as it remains below the zero line. The Stochastic Oscillator is approaching oversold territory, indicating a potential bounce. The 14-day RSI remains neutral, suggesting indecision in the market.
Trading Strategy: Neutral to Sell
Sell below 144.80-144.50 with targets at 144.20-143.90 and 143.60-143.30, with a stop loss above 145.10. Alternatively, consider buying above 145.10 with targets at 145.40-145.70, with a stop below 144.80.
GBP/USD
Technicals in Focus
The GBP/USD pair surged higher, closing near the 1.3410 level after a strong rally driven by better-than-expected U.K. data. This upward movement was further supported by positive sentiment regarding the U.K. economy. On the technical side, the MACD shows strong bullish momentum as it continues to rise above the zero line. The Stochastic Oscillator is in overbought territory, signaling that the pair may soon face a pullback. The 14-day RSI is also nearing overbought levels, suggesting that the rally could be running out of steam.
Trading Strategy: Neutral to Buy
Buy above 1.3400-1.3380 with targets at 1.3430-1.3460 and 1.3480-1.3500, with a stop loss below 1.3350. Alternatively, consider selling below 1.3350 with targets at 1.3320-1.3290, with stops above 1.3380.
Market Outlook
Looking ahead, the U.S. core PCE price index and other inflation indicators will be closely monitored, as these could provide key insights into the health of the U.S. economy and the future direction of the U.S. dollar. Traders will also be watching for any updates from the Federal Reserve as policymakers weigh further rate hikes or policy adjustments.
In the Eurozone, traders will continue to assess the ECB’s stance on inflation and growth, especially in light of ongoing economic uncertainties. Meanwhile, the British pound may continue to experience volatility, driven by U.K. economic data and speculation over the Bank of England’s next moves.
Overall, the market is expected to remain sensitive to incoming data and central bank communications, with the potential for increased volatility as traders react to new developments.