As we head into Friday, November 8, 2024, global markets are poised for potential volatility driven by multiple economic data releases. The U.S. dollar remains a focal point as traders evaluate recent data and anticipate further U.S. labor market insights. Additionally, key events in Canada, the Eurozone, and Australia are expected to play significant roles in shaping market sentiment.
In the currency markets, the EUR/USD pair encountered mixed movements, heavily influenced by economic sentiment from both the Eurozone and the U.S. With ongoing concerns regarding the Eurozone’s economic outlook, the pair remains under pressure. Meanwhile, attention is on the ECB speeches and upcoming U.S. inflation and consumer sentiment data, which are expected to provide further directional cues.
EUR/USD
Technicals in Focus
Following the election outcome, the EUR/USD pair experienced a significant dip but has since shown signs of recovery, stabilizing around the 1.0790 level. The euro faced initial selling pressure due to market uncertainty surrounding the new U.S. administration’s policies. On the technical front, the MACD is hovering around the zero line, indicating limited momentum, while the Stochastic Oscillator remains neutral. The 14-day RSI shows a range-bound pattern, suggesting traders are waiting for clearer policy directions from the U.S. administration.
Trading Strategy: Neutral to Sell
Sell below 1.0780-1.0750 with targets at 1.0720-1.0700 and 1.0680-1.0650, with a stop loss above 1.0810. Alternatively, consider long positions above 1.0810 with targets of 1.0840-1.0870, with stops below 1.0750.
GBP/USD
Technicals in Focus
The GBP/USD pair initially dropped but rebounded sharply, reflecting market sentiment following the U.S. election. The British pound saw a surge as traders reacted to the prospect of U.S.-U.K. trade agreements gaining momentum under Trump’s administration. Technically, the MACD remains slightly positive, showing moderate bullish momentum. The Stochastic Oscillator is close to overbought levels, suggesting the possibility of a pullback, while the 14-day RSI indicates a slight bullish trend as it edges higher.
Trading Strategy: Neutral to Buy
Buy above 1.2970-1.3000 with targets at 1.3030-1.3060 and 1.3090-1.3120, with a stop loss below 1.2940. Alternatively, consider selling below 1.2940 with targets of 1.2900-1.2870, with stops above 1.2970.
AUD/USD
Technicals in Focus
The AUD/USD pair saw increased volatility and a strong upward movement following the election results, closing around the 0.6669 level. The Australian dollar benefited from renewed risk sentiment, as the markets anticipate potential trade improvements between the U.S. and China under Trump. The MACD remains close to neutral but is slowly trending positive, while the Stochastic Oscillator has moved out of oversold territory, indicating potential for further upside. The 14-day RSI is also in a neutral range, suggesting consolidation.
Trading Strategy: Neutral to Buy
Buy above 0.6650-0.6620 with targets at 0.6700-0.6730 and 0.6760-0.6790, with a stop loss below 0.6590. Alternatively, consider selling below 0.6590 with targets at 0.6560-0.6530, with stops above 0.6650.
Market Outlook
The recent U.S. election outcome has shifted the market’s focus to potential changes in economic and foreign policies. Trump’s victory raises expectations for a mix of tax cuts, deregulation, and possible trade renegotiations, especially with China, which could affect global risk sentiment. Market participants are likely to watch for any early policy announcements, particularly in areas like fiscal stimulus and infrastructure, which could have significant implications for the U.S. dollar and risk-sensitive currencies.
In Canada, Trump’s energy-friendly stance may support the Canadian dollar as oil prices react positively. The Australian dollar’s performance will also be tied to global risk sentiment, with markets closely monitoring the potential impact on U.S.-China relations.
Overall, expect markets to remain sensitive to post-election developments and central bank communications, with heightened volatility as traders adjust to this new political landscape.