As we head into Wednesday, September 25, 2024, global markets are positioned for a session that could see heightened volatility, driven by key economic data releases. The U.S. dollar remains the focal point as traders digest mixed economic data and prepare for upcoming reports, including the U.S. jobless claims and European Central Bank (ECB) updates.
In the currency markets, the EUR/USD pair faced significant fluctuations, largely influenced by mixed economic data from both the Eurozone and the U.S. The euro remains under pressure amid uncertainty surrounding the ECB’s stance on inflation and growth, while the dollar is supported by stronger-than-expected U.S. consumer confidence data.
Meanwhile, the USD/JPY pair exhibited volatility as it reacted to both U.S. data and risk sentiment, driven by expectations from upcoming Federal Reserve speeches. The yen showed strength after a notable decline in the U.S. session, reflecting ongoing demand for safe-haven assets.
The AUD/USD pair also displayed notable volatility, reflecting the market’s sensitivity to risk sentiment and Australian economic data. Investors are closely watching developments related to the Reserve Bank of Australia (RBA) and global trade dynamics.
EUR/USD
Technicals in Focus
The EUR/USD pair experienced significant swings, currently trading near the 1.1149 level. The pair’s movements were largely driven by a combination of weaker Eurozone manufacturing PMI data and stronger U.S. consumer confidence. On the technical side, the MACD indicator suggests a possible shift toward bearish momentum as it crosses below the zero line. The Stochastic Oscillator is entering oversold territory, which could suggest a potential corrective bounce in the short term. The 14-day RSI is neutral, providing no strong directional bias.
Trading Strategy: Neutral to Sell
Sell below 1.1150-1.1120 with targets at 1.1090-1.1060 and 1.1030-1.1010, with a stop loss above 1.1175. Alternatively, consider long positions above 1.1175 with targets of 1.1200-1.1230, with stops below 1.1140.
USD/JPY
Technicals in Focus
The USD/JPY pair showed sharp movements, currently hovering around the 143.67 level after experiencing significant downward pressure earlier in the session. This sell-off was primarily driven by a pullback in U.S. Treasury yields and risk-off sentiment. The MACD is signaling an increase in bearish momentum as it moves below the zero line, while the Stochastic Oscillator is approaching oversold territory, hinting at a potential rebound. The 14-day RSI remains neutral, suggesting limited momentum in either direction.
Trading Strategy: Neutral to Sell
Sell below 143.70-143.40 with targets at 143.00-142.70 and 142.40-142.10, with a stop loss above 144.00. Alternatively, consider buying above 144.00 with targets at 144.30-144.60, with stops below 143.60.
AUD/USD
Technicals in Focus
The AUD/USD pair exhibited strong volatility, closing near the 0.6867 level after a rapid rise earlier in the day. This upward move was supported by stronger-than-expected Australian data and improving risk sentiment. On the technical side, the MACD is close to the zero line, reflecting weakening bearish momentum. The Stochastic Oscillator is in overbought territory, indicating a potential for downside correction. The 14-day RSI is neutral, which reflects the current consolidation phase.
Trading Strategy: Neutral to Buy
Buy above 0.6860-0.6830 with targets at 0.6890-0.6920 and 0.6950-0.6980, with a stop loss below 0.6800. Alternatively, consider selling below 0.6800 with targets of 0.6770-0.6740, with stops above 0.6830.
Market Outlook
Looking ahead, the U.S. initial jobless claims report will be a key focus for markets as it could provide critical insights into the strength of the U.S. labor market and the broader economy. Traders are also keenly watching speeches from Federal Reserve officials, including Fed Chair Powell, for any guidance on future interest rate policy.
In Europe, market participants are closely monitoring the ECB’s non-monetary policy meeting, especially as inflation remains a significant concern. The outlook for the Eurozone remains uncertain, with mixed PMI data and ongoing geopolitical risks impacting sentiment.
Overall, the market is expected to remain sensitive to economic data and central bank communications, with the potential for increased volatility as traders react to new information.