As we head into Tuesday, September 10, 2024, global markets are positioned for potential forex volatility, driven by a combination of key economic data releases and central bank decisions. Traders are closely monitoring U.S. employment data and inflation reports, which are expected to provide significant insight into the Federal Reserve’s next steps.
In the currency markets, the GBP/USD pair experienced notable selling pressure, with the British pound weakening further against the U.S. dollar. This downward move was driven by a combination of weak U.K. labor data and a stronger U.S. dollar ahead of key inflation data. The market is keenly focused on U.K. employment and wage growth figures set to be released, which could provide further direction for the pair.
Meanwhile, the USD/JPY pair showed recovery signs after a significant dip earlier in the session. The pair’s movements reflected demand for the U.S. dollar, supported by ongoing U.S. economic resilience. Traders are awaiting key updates from Japan’s industrial production data as well as further insight into U.S. inflation expectations.
The AUD/USD pair experienced a sharp decline, reflecting broader risk-off sentiment and a stronger U.S. dollar. Traders are closely monitoring Australian economic releases and the U.S. PPI report, which could influence the direction of the pair in the near term.
GBP/USD
Technicals in Forex Volatility
The GBP/USD pair has continued its downward slide, closing around the 1.3078 level after experiencing a sharp sell-off. The pair has been impacted by weak labor market expectations and the market’s anticipation of U.K. economic data. On the technical front, the MACD shows bearish momentum, with histograms expanding below the zero line. The Stochastic Oscillator is in oversold territory, indicating the potential for a short-term bounce. However, the 14-day RSI remains firmly bearish, suggesting further downside risks.
Trading Strategy: Neutral to Sell
Sell below 1.3100-1.3070 with targets at 1.3030-1.3000 and 1.2970-1.2950, with a stop loss above 1.3130. Alternatively, consider long positions above 1.3130 with targets of 1.3170-1.3200, with stops below 1.3070.
USD/JPY
Technicals in Forex Volatility
The USD/JPY pair showed signs of recovery, trading around the 142.88 level after a significant sell-off earlier in the session. The pair’s movements were influenced by demand for the U.S. dollar and market positioning ahead of Japan’s industrial data. On the technical front, the MACD has shifted to neutral, while the Stochastic Oscillator is moving out of oversold territory, suggesting the potential for further upside. The 14-day RSI is also showing signs of consolidation, supporting the case for a neutral to bullish outlook.
Trading Strategy: Neutral to Buy
Buy above 142.90-143.00 with targets at 143.50-143.80 and 144.00-144.20, with a stop loss below 142.60. Alternatively, consider selling below 142.60 with targets of 142.20-141.90, with stops above 143.00.
AUD/USD
Technicals in Forex Volatility
The AUD/USD pair experienced significant selling pressure, closing around the 0.6656 level after hitting a session low near 0.6650. This sharp decline was influenced by broader risk-off sentiment and a stronger U.S. dollar. On the technical front, the MACD shows increasing bearish momentum, while the Stochastic Oscillator remains in oversold territory, indicating the potential for a short-term bounce. However, the 14-day RSI remains bearish, pointing to further downside risks in the near term.
Trading Strategy: Neutral to Sell
Sell below 0.6660-0.6640 with targets at 0.6610-0.6590 and 0.6560-0.6540, with a stop loss above 0.6690. Alternatively, consider buying above 0.6690 with targets of 0.6720-0.6750, with stops below 0.6660.
Market Outlook on Forex Volatility
Looking ahead, the U.S. core CPI data will be critical for the market’s direction, especially in light of ongoing discussions about the Federal Reserve’s future interest rate path. In the U.K., labor market data will be closely watched as it will provide further insight into the economy’s strength. Japan’s industrial production data is also expected to play a key role in determining the next movements for the yen. Overall, traders should expect increased forex volatility as markets react to these key economic reports.