As we head into Tuesday, October 8, 2024, global markets are gearing up for another session of heightened volatility, driven by a series of crucial economic data releases and central bank commentary. Investors are keeping a close eye on developments in the U.S., U.K., and New Zealand, with several key reports expected to shape the market sentiment for the week.
The U.S. dollar remains a focal point as traders react to last week’s Non-Farm Payrolls (NFP) data, which delivered mixed signals about the health of the U.S. labor market. This week, attention will shift to speeches from Federal Reserve officials, who are expected to provide further insights into the central bank’s policy direction amid persistent inflation concerns and a cooling job market.
Meanwhile, in the U.K., economic concerns have intensified following disappointing industrial production and manufacturing output data. These weak figures add to existing worries about the U.K.’s economic resilience as the country continues to navigate through post-Brexit uncertainties.
The British pound is facing downward pressure, particularly as the Bank of England is expected to maintain a cautious stance given the mixed economic outlook. Across the globe, the New Zealand dollar remains on the defensive as soft household spending data suggests further weakness in the domestic economy. Speculation is growing around the Reserve Bank of New Zealand’s next policy moves, with some market participants expecting a dovish tilt that could weigh further on the kiwi.
In the current market environment, traders are bracing for continued volatility, with risk sentiment fluctuating in response to new economic data and central bank signals. The combination of uncertain economic conditions, geopolitical tensions, and shifting monetary policies is likely to keep market participants on edge, particularly as they assess the potential impact on major currency pairs.
GBP/USD

Technicals in Focus
The GBP/USD pair remains under pressure following the release of weaker-than-expected U.K. industrial and manufacturing production data. After a significant sell-off, the pair stabilized around the 1.3090 level but continues to struggle with upside momentum.
On the technical front, the Moving Average Convergence Divergence (MACD) indicator is in bearish territory, with the histogram showing declining momentum. The Stochastic Oscillator is in oversold territory, suggesting a potential for some corrective bounce. However, the 14-day Relative Strength Index (RSI) remains subdued, reflecting the pair’s current bearish bias.
Trading Strategy: Neutral to Sell
Sell below 1.3110 with targets at 1.3070-1.3040 and 1.3000-1.2970, with a stop loss above 1.3145. Alternatively, consider long positions above 1.3150 with targets of 1.3180-1.3200, with stops below 1.3100.
USD/JPY

Technicals in Focus
The USD/JPY pair has shown considerable volatility, with the pair briefly testing the 148.80 level before retreating. The yen’s strength was largely driven by risk-off sentiment and comments from Japanese policymakers, although the U.S. dollar has managed to regain some ground.
On the technical side, the MACD is neutral, hovering near the zero line, while the Stochastic Oscillator remains in overbought territory, suggesting potential downside correction. The 14-day RSI has also moderated but remains slightly above neutral, reflecting indecision in the market.
Trading Strategy: Neutral to Buy
Buy above 148.00 with targets at 148.40-148.70 and 149.00-149.20, with a stop loss below 147.50. Alternatively, consider selling below 147.50 with targets of 147.10-146.80, with stops above 148.10.
NZD/USD

Technicals in Focus
The NZD/USD pair continues to weaken amid disappointing New Zealand economic data and a dovish outlook from the Reserve Bank of New Zealand. After a sharp sell-off, the pair found some support around the 0.6120 level but remains vulnerable to further downside.
On the technical side, the MACD indicator is signaling increased bearish momentum, with the histogram deep in negative territory. The Stochastic Oscillator is in oversold territory, which could suggest a potential corrective bounce. However, the 14-day RSI remains well below 50, indicating a strong bearish trend.
Trading Strategy: Neutral to Sell
Sell below 0.6130 with targets at 0.6100-0.6070 and 0.6050-0.6030, with a stop loss above 0.6160. Alternatively, consider buying above 0.6170 with targets at 0.6200-0.6220, with stops below 0.6130.
Market Outlook
Looking ahead, traders will be closely watching U.S. economic data releases, including inflation figures, which could provide further insight into the Federal Reserve’s next steps. Fed speeches throughout the week will also be critical for gauging the direction of monetary policy, particularly as inflation remains elevated.
In the U.K., market participants will keep an eye on the next batch of economic data to assess the pound’s trajectory amidst ongoing Brexit-related uncertainty and weaker domestic growth. Meanwhile, the New Zealand dollar will remain under pressure unless there is a significant improvement in the country’s economic outlook or a change in the Reserve Bank of New Zealand’s tone. Overall, markets are likely to experience continued volatility as traders react to incoming data and policy signals from central banks.