As we head into Friday, November 1, 2024, global markets are braced for a volatile session, with a series of impactful economic data releases on the horizon. The U.S. dollar remains a key focus as traders await critical employment data, including Nonfarm Payrolls and Average Hourly Earnings, which are expected to provide insight into the U.S. labor market’s strength and influence Federal Reserve policy considerations.
In the currency markets, the USD/JPY pair exhibited downward pressure, largely due to cautious sentiment ahead of U.S. labor market data and dovish expectations for Japanese economic policy. Meanwhile, the AUD/USD pair saw a slight recovery after a recent decline, reflecting reactions to both U.S. data and Australia’s own economic indicators. Lastly, the USD/CAD pair displayed significant volatility, affected by Canadian GDP data and fluctuations in oil prices.
USD/JPY
Technicals in Focus
The USD/JPY pair traded lower, closing near the 152.30 level after a sustained downtrend. This movement was driven by market caution ahead of U.S. employment data and dovish expectations from the Bank of Japan. On the technical front, the MACD indicator remains below the zero line, signaling strong bearish momentum. The Stochastic Oscillator is in oversold territory, suggesting a potential for a corrective bounce. The 14-day RSI is neutral, indicating the possibility of range-bound activity.
Trading Strategy: Neutral to Sell
Sell below 152.50-152.20 with targets at 151.90-151.70 and 151.50-151.30, with a stop loss above 152.80. Alternatively, consider buying above 152.80 with targets of 153.10-153.30, with stops below 152.50.
AUD/USD
Technicals in Focus
The AUD/USD pair saw moderate volatility, closing around the 0.6560 level after recovering from recent lows. This movement was driven by risk sentiment influenced by upcoming U.S. economic data as well as recent Australian economic figures. On the technical side, the MACD is close to the zero line, indicating diminishing bearish momentum. The Stochastic Oscillator is in neutral territory, showing no clear directional bias, while the 14-day RSI remains balanced, suggesting a consolidation phase.
Trading Strategy: Neutral to Buy
Buy above 0.6550-0.6530 with targets at 0.6580-0.6600 and 0.6630-0.6650, with a stop loss below 0.6500. Alternatively, consider selling below 0.6500 with targets of 0.6470-0.6450, with stops above 0.6530.
USD/CAD
Technicals in Focus
The USD/CAD pair displayed heightened volatility, closing near the 1.3920 level after reacting to the latest Canadian GDP data, which highlighted Canada’s economic stability. Oil prices, an essential factor for the Canadian dollar, also contributed to the pair’s movements. Technically, the MACD remains above the zero line, reflecting bullish momentum, while the Stochastic Oscillator is in neutral territory, showing market indecision. The 14-day RSI is slightly bullish, indicating room for a possible upside continuation.
Trading Strategy: Neutral to Buy
Buy above 1.3900-1.3870 with targets at 1.3940-1.3960 and 1.3990-1.4010, with a stop loss below 1.3840. Alternatively, consider selling below 1.3840 with targets at 1.3810-1.3780, with stops above 1.3870.
Market Outlook
Looking ahead, the focus will be on U.S. Nonfarm Payrolls, Unemployment Rate, and Average Hourly Earnings, which are expected to set the tone for USD pairs. The Canadian dollar will also be sensitive to oil price movements and potential insights from Canadian economic performance. Lastly, for the yen, ongoing Bank of Japan policy developments remain a factor, but the USD/JPY pair will likely react heavily to U.S. data releases. Expect increased volatility as traders digest these major economic indicators.