As we move into Tuesday, September 17, 2024, forex markets are positioning themselves for what could be a volatile session, driven by a series of key economic data releases such as the US production data.
The U.S. dollar continues to be a central focus as traders digest yesterday’s upbeat NY Empire State Manufacturing Index, which exceeded expectations, showing a strong rebound in the U.S. manufacturing sector. Today, all eyes are on U.S. retail sales and industrial production data, which will provide further insights into the health of the U.S. economy and its potential to influence the Federal Reserve’s upcoming decisions on interest rates.
In Europe, the euro is facing headwinds as market participants await the release of the Eurozone ZEW Economic Sentiment Index, which will offer clues about the region’s economic outlook. ECB speeches are also scheduled today, which could further clarify the central bank’s stance on inflation and monetary policy. The euro has struggled to gain momentum amid a backdrop of slow growth and continued uncertainty around the ECB’s policy direction.
Meanwhile, the British pound is holding onto recent gains, benefiting from expectations of hawkish sentiment from the Bank of England ahead of Thursday’s interest rate decision. Inflation data, set for release tomorrow, is expected to provide critical insights into the U.K.’s economic landscape and may set the tone for further movements in the GBP/USD pair. Retail sales figures, expected later this week, will also play a key role in shaping market sentiment around the pound.
Commodity-linked currencies, including the Australian and Canadian dollars, remain under pressure. The Australian dollar has been particularly sensitive to risk sentiment, and with key employment data set to be released on Thursday, volatility is expected to rise. The Canadian dollar is also closely tied to movements in oil prices, and with Baker Hughes rig count data and other crude oil market reports scheduled later in the week, traders are likely to adjust their positions accordingly. Traders continue to monitor US production data for key insights on market sentiment.
GBP/USD

Technicals in Focus
The GBP/USD pair experienced a surge during Monday’s session, reaching highs of 1.3210 before retracing slightly to settle around the 1.3195 level. The British pound’s strength reflects the anticipation around key economic data releases, such as Wednesday’s inflation data and retail sales on Friday.
On the technical front, the pair is displaying signs of consolidation near the 1.3195 level. The MACD is showing some bullish momentum, while the 14-day RSI is hovering in the neutral zone, suggesting that the pair could see continued movement in either direction depending on upcoming data.
Trading Strategy: Neutral to Buy
Buy above 1.3200 with targets at 1.3230 and 1.3260, with a stop loss below 1.3170. Alternatively, consider selling below 1.3170, with targets at 1.3140 and 1.3110, with stops above 1.3200.
AUD/USD

Technicals in Focus
The AUD/USD pair also saw significant movement, with the pair testing the 0.6740 level before pulling back slightly. The Australian dollar remains vulnerable ahead of key domestic data, including the employment change and unemployment rate figures scheduled for Thursday.
Technically, the pair has reached a key resistance level near 0.6735. The MACD indicates slowing bullish momentum, while the RSI is nearing overbought territory, suggesting a potential pullback in the near term.
Trading Strategy: Neutral to Sell
Sell below 0.6730 with targets at 0.6700 and 0.6670, with a stop loss above 0.6755. Alternatively, consider buying above 0.6755 with targets at 0.6780 and 0.6810, with stops below 0.6730.
USD/JPY

Technicals in Focus
The USD/JPY pair experienced choppy trading as it reached 140.70 during Monday’s session before pulling back slightly to hover around the 140.48 level. The yen’s movement was largely influenced by market positioning ahead of the Bank of Japan’s interest rate decision and monetary policy statement later in the week.
On the technical side, the MACD is showing signs of bullish divergence, while the RSI remains in neutral territory, suggesting indecision in the market as traders await further clarity from the BoJ.
Trading Strategy: Neutral to Buy
Buy above 140.50 with targets at 140.80 and 141.10, with a stop loss below 140.20. Alternatively, consider selling below 140.20, with targets at 139.80 and 139.50, with stops above 140.50.
Market Outlook on US Production Data
Looking ahead, the US retail sales and industrial US production data will be closely watched today as they could provide further insights into the strength of the U.S. economy. Additionally, traders are gearing up for Thursday’s Bank of England interest rate decision and Australian employment data, both of which are expected to add to the volatility in GBP and AUD pairs.
Overall, the market remains sensitive to economic data and central bank communications, with the potential for increased volatility as traders react to new developments.