As we head into Friday, November 29, 2024, global markets are navigating a landscape marked by a mix of optimism and caution. With several key economic data releases on the horizon, including Eurozone inflation figures, Canadian GDP data, and U.S. Chicago PMI, the day is expected to bring heightened volatility. Currency traders are closely monitoring these developments for insights into central bank policy trajectories, particularly from the European Central Bank (ECB) and the Federal Reserve. The impact of recent dovish comments from Federal Reserve officials continues to ripple through markets, driving movements in major currency pairs.
Additionally, fluctuating commodity prices, particularly crude oil, are adding another layer of complexity to the markets, influencing commodity-linked currencies such as the Canadian dollar. With month-end positioning also in play, traders should brace for sharp intraday swings as participants adjust portfolios in light of the latest data and geopolitical uncertainties. The focus remains on how these factors will shape broader market sentiment and provide clues for the upcoming trading weeks.
EUR/USD
Technicals in Focus
The EUR/USD pair exhibited mixed movements over the past sessions, trading near the 1.0532 level as of the latest chart. The pair initially spiked on Wednesday following slightly weaker U.S. Core PCE data but pared gains amidst renewed concerns over Eurozone inflation. Upcoming CPI data will be critical in defining the next moves for the euro.
- MACD: Flat near the zero line, reflecting low momentum and indecision.
- Stochastic Oscillator: Trending near oversold territory, hinting at potential upward corrections.
- 14-day RSI: Currently neutral, emphasizing a range-bound behavior.
Trading Strategy: Neutral to Buy
- Buy above 1.0540-1.0560 with targets at 1.0580-1.0600 and stops below 1.0520.
- Alternatively, sell below 1.0510 with targets at 1.0480-1.0460 and stops above 1.0540.
NZD/USD
Technicals in Focus
The NZD/USD pair experienced notable gains, trading near the 0.5886 level. The rally was fueled by dovish signals from the Federal Reserve and resilience in New Zealand economic data, including stronger-than-expected retail sales earlier in the week. However, a retracement is possible as the pair approaches key resistance.
- MACD: Bullish crossover, indicating upward momentum.
- Stochastic Oscillator: Overbought, suggesting a near-term pullback could occur.
- 14-day RSI: Approaching overbought levels, hinting at exhaustion of the bullish trend.
Trading Strategy: Neutral to Sell
- Sell below 0.5880-0.5900 with targets at 0.5850-0.5830 and stops above 0.5910.
- Alternatively, buy above 0.5910 with targets at 0.5940-0.5960 and stops below 0.5880.
USD/CAD
Technicals in Focus
The USD/CAD pair showed significant weakness, trading near 1.4015 as Canadian GDP data for Q3 exceeded expectations, lifting the Canadian dollar. The pair saw further downside pressure as crude oil inventories declined, supporting oil prices and boosting CAD.
- MACD: Bearish momentum persists, with the indicator below the zero line.
- Stochastic Oscillator: Approaching oversold territory, suggesting a potential bounce.
- 14-day RSI: Neutral but trending lower, indicating bearish dominance.
Trading Strategy: Neutral to Sell
- Sell below 1.4030-1.4000 with targets at 1.3970-1.3950 and stops above 1.4050.
- Alternatively, buy above 1.4060 with targets at 1.4090-1.4110 and stops below 1.4020.
Market Outlook
The Eurozone CPI (YoY) is forecasted to rise to 2.8%, which, if realized, could reinforce expectations of further tightening by the ECB. In Canada, strong GDP data (Q3: +1.0% forecasted, +0.91% actual) will likely bolster CAD strength. Lastly, the Chicago PMI report will provide insights into U.S. economic resilience as markets prepare for the next Fed move.
Traders should remain cautious, as end-of-month positioning and key economic data could amplify volatility in the final trading session of the week.