As we head into Wednesday, October 9, 2024, global markets are set to navigate a session that promises notable volatility, driven by key economic releases and central bank communications such as how GBP/USD drops amid weak trade balance data. With the U.S. dollar remaining in focus, traders will be reacting to key U.S. data, including jobless claims and core inflation figures, as well as global economic indicators such as the RBNZ rate decision and UK trade data.
In the currency markets, the GBP/USD pair has experienced a sharp downward move, largely driven by disappointing UK economic data. The pound remains under pressure as traders digest weaker-than-expected trade balance figures and ongoing concerns about the UK’s economic outlook. Meanwhile, the USD/JPY pair saw moderate gains, reflecting the strength of the U.S. dollar ahead of key data releases. On the other hand, the NZD/USD pair has exhibited considerable volatility, with the New Zealand dollar facing headwinds after the Reserve Bank of New Zealand’s rate decision.
GBP/USD – GBP/USD Drops Amid Weak Trade Balance Data
GBP/USD Drops Amid Weak Trade Balance Data
The GBP/USD pair exhibited significant volatility, with the pound experiencing a sell-off and dropping towards the 1.3090 level. This downward movement is largely due to the disappointing UK trade balance data, which came in at -19.20 billion, worse than the expected -20.00 billion.
On the technical front, the MACD has crossed into bearish territory, indicating growing selling pressure. The Stochastic Oscillator has entered oversold levels, suggesting a potential for a corrective bounce in the near term. The 14-day RSI remains neutral, hovering near the 40-level, indicating that further downside pressure could be limited in the short term.
Trading Strategy: Neutral to Sell
- Sell below 1.3090-1.3070 with targets at 1.3030-1.3000 and 1.2970-1.2950, with a stop loss above 1.3110.
- Alternatively, consider long positions above 1.3110 with targets of 1.3150-1.3180, with stops below 1.3070.
USD/JPY
Technicals in Focus
The USD/JPY pair has seen moderate gains, closing near the 148.25 level after bouncing from earlier lows around 147.60. This upward movement was supported by the overall strength in the U.S. dollar ahead of key inflation data and jobless claims.
On the technical side, the MACD remains positive, suggesting bullish momentum is still intact. The Stochastic Oscillator is nearing overbought territory, indicating that the pair may face resistance at higher levels. The 14-day RSI remains neutral, but the pair’s recent upward move suggests that a test of the 148.50 resistance level could be in play.
Trading Strategy: Neutral to Buy
- Buy above 148.20-148.00 with targets at 148.50-148.80 and 149.10-149.30, with a stop loss below 147.80.
- Alternatively, consider selling below 147.80 with targets of 147.50-147.20, with stops above 148.20.
NZD/USD
Technicals in Focus
The NZD/USD pair experienced significant volatility, closing near the 0.6110 level after a steep sell-off following the Reserve Bank of New Zealand’s (RBNZ) rate decision. The RBNZ cut rates more than expected, which weighed heavily on the New Zealand dollar.
On the technical front, the MACD is deep in bearish territory, indicating strong downside momentum. The Stochastic Oscillator is in oversold territory, suggesting that the pair may be due for a corrective rebound. The 14-day RSI is also nearing oversold levels, further supporting the potential for a near-term bounce.
Trading Strategy: Neutral to Sell
- Sell below 0.6110-0.6090 with targets at 0.6050-0.6020 and 0.6000-0.5970, with a stop loss above 0.6130.
- Alternatively, consider buying above 0.6130 with targets of 0.6170-0.6200, with stops below 0.6090.
GBP/USD Drops Amid Weak Trade Balance Data
Looking ahead, traders will closely watch the release of U.S. jobless claims and CPI data, as these figures will provide crucial insights into the strength of the U.S. economy and the potential direction of the Federal Reserve’s monetary policy. Additionally, developments from the Bank of England and the European Central Bank will be in focus as investors assess the global economic landscape.
The New Zealand dollar will remain in the spotlight as markets digest the RBNZ’s rate decision and its potential impact on the country’s economic outlook. Meanwhile, the pound will likely remain under pressure as weak UK data continues to weigh on the GBP/USD pair.
Overall, the market is expected to remain volatile as traders navigate a slew of economic data and central bank communications, with potential for sharp moves across major currency pairs.