As we head into Thursday, September 26, 2024, global markets are bracing for heightened volatility, driven by a series of significant economic data releases and central bank updates. The U.S. dollar remains in the spotlight as traders react to recent economic reports and prepare for key upcoming data, particularly U.S. jobless claims, GDP data, and speeches from Federal Reserve officials.
In the currency markets, the EUR/USD pair experienced a choppy session, largely influenced by mixed economic signals from the Eurozone and the U.S. While the euro found some relief after stronger-than-expected U.S. data, it continues to face pressure as traders wait for further direction from the European Central Bank (ECB) and U.S. economic releases.
Meanwhile, the USD/JPY pair experienced sharp movements, with the yen gaining strength as U.S. Treasury yields declined. This was further bolstered by safe-haven demand for the yen, as traders sought shelter from potential market turbulence ahead of key economic announcements.
The GBP/USD pair exhibited notable volatility, driven by a rally in the British pound, supported by better-than-expected U.K. economic data. Investors are also positioning ahead of key U.K. inflation data and the Bank of England’s next policy decisions, adding to the pair’s movement.
EUR/USD
Technicals in Focus
The EUR/USD pair remained volatile, closing near the 1.1205 level after oscillating throughout the session. The pair’s movements were influenced by mixed Eurozone and U.S. economic data, with traders showing caution ahead of U.S. jobless claims and inflation figures. On the technical front, the MACD is hovering above the zero line, with histograms showing modest upward momentum, suggesting slight bullish sentiment. The Stochastic Oscillator is entering overbought territory, signaling potential exhaustion of the current upward move. The 14-day RSI remains neutral, reflecting the pair’s current range-bound behavior.
Trading Strategy: Neutral to Buy
Buy above 1.1200-1.1180 with targets at 1.1230-1.1260 and 1.1280-1.1300, with a stop loss below 1.1150. Alternatively, consider selling below 1.1150 with targets of 1.1120-1.1090, with stops above 1.1180.
USD/JPY
Technicals in Focus
The USD/JPY pair experienced a sharp decline, falling to 143.92 after hitting a session high of 144.40. This movement was largely driven by falling U.S. Treasury yields and increasing demand for the yen as a safe-haven currency. On the technical side, the MACD has crossed below the zero line, indicating increasing bearish momentum. The Stochastic Oscillator is in oversold territory, suggesting that the pair may soon see a corrective bounce. The 14-day RSI is neutral, offering no clear directional bias.
Trading Strategy: Neutral to Sell
Sell below 144.00-143.70 with targets at 143.40-143.20 and 142.80-142.60, with a stop loss above 144.20. Alternatively, consider buying above 144.20 with targets at 144.50-144.80, with a stop below 143.90.
GBP/USD
Technicals in Focus
The GBP/USD pair rallied strongly, closing near the 1.3410 level after a day of significant upward movement. This rally was driven by better-than-expected U.K. economic data and positive sentiment regarding the U.K. economy. On the technical front, the MACD is showing strong bullish momentum as it moves higher above the zero line. The Stochastic Oscillator is nearing overbought territory, signaling that the pair may be ripe for a correction. The 14-day RSI is moving into overbought levels, indicating that the upward trend may start losing steam soon.
Trading Strategy: Neutral to Buy
Buy above 1.3400-1.3380 with targets at 1.3430-1.3450 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. initial jobless claims and GDP data will be closely monitored as they could provide key insights into the strength of the U.S. labor market and the broader economy. Additionally, speeches from Federal Reserve officials, including Chair Powell, will be of particular interest as traders search for any indications of future monetary policy shifts.
In the Eurozone, traders are awaiting the next steps from the ECB as economic uncertainty continues to weigh on the region. The euro remains under pressure, and any new data from the ECB could lead to significant price swings in EUR/USD.
Overall, the market is expected to remain sensitive to incoming economic data and central bank communications, with the potential for increased volatility as traders react to new information.