As we head into Friday, October 4, 2024, global markets are positioned for a session that could see heightened volatility, driven by significant economic data releases such as USD Rallies as Nonfarm Payrolls Boost Confidence. The U.S. dollar remains at the center of attention as traders digest labor market data and await further updates from central banks. The focus is particularly on U.S. Nonfarm Payrolls and related employment metrics.
In the currency markets, the EUR/USD pair experienced sharp movements, driven by mixed signals from the Eurozone and the U.S. economic landscape. The euro faced selling pressure due to the negative sentiment surrounding the Eurozone economy and the strength of the U.S. dollar.
Meanwhile, the GBP/USD pair witnessed a significant sell-off, reflecting both the strength of the U.S. dollar and renewed concerns over the UK’s economic outlook after the latest data releases. Traders are repositioning ahead of key BoE speeches and economic data.
The USD/JPY pair showed some recovery during the session, reflecting positive sentiment surrounding the U.S. economy and ongoing speculation regarding potential central bank interventions.
EUR/USD
USD Rallies as Nonfarm Payrolls Boost Confidence
The EUR/USD pair declined sharply during the session, falling towards the 1.1010 level. The sell-off was exacerbated by concerns over weaker Eurozone data and robust U.S. economic indicators.
On the technical side, the MACD is showing bearish momentum, while the Stochastic Oscillator is in oversold territory, suggesting that the pair might experience a short-term corrective bounce. The 14-day RSI has entered bearish territory, indicating continued downside pressure.
Trading Strategy: Neutral to Sell
- Sell below 1.1020-1.1000 with targets at 1.0970-1.0950, with a stop loss above 1.1040.
- Alternatively, consider long positions above 1.1040 with targets of 1.1070-1.1100, with stops below 1.1010.
GBP/USD
Technicals in Focus
The GBP/USD pair experienced a sharp decline, dropping towards the 1.3090 level as the U.S. dollar gained strength and UK economic data disappointed.
On the technical front, the MACD has crossed below the zero line, indicating strong bearish momentum. The Stochastic Oscillator is deeply oversold, signaling a possible corrective bounce. The 14-day RSI remains bearish, reflecting ongoing selling pressure.
Trading Strategy: Neutral to Sell
- Sell below 1.3120-1.3090 with targets at 1.3050-1.3020, with a stop loss above 1.3150.
- Alternatively, consider buying above 1.3150 with targets at 1.3180-1.3220, with stops below 1.3120.
USD/JPY
USD Rallies as Nonfarm Payrolls Boost Confidence
The USD/JPY pair showed a recovery, climbing towards the 146.90 level after a period of volatility. The pair remains supported by stronger U.S. data and ongoing speculation regarding potential intervention by the Bank of Japan.
On the technical side, the MACD is still indicating positive momentum, while the Stochastic Oscillator is in overbought territory, signaling a potential retracement. The 14-day RSI remains in neutral territory, reflecting ongoing indecision.
Trading Strategy: Neutral to Buy
- Buy above 146.70-146.90 with targets at 147.20-147.50, with a stop loss below 146.50.
- Alternatively, consider selling below 146.50 with targets of 146.20-145.90, with stops above 146.90.
USD Rallies as Nonfarm Payrolls Boost Confidence
Looking ahead, the U.S. Nonfarm Payrolls, Average Hourly Earnings, and Unemployment Rate data will be the primary drivers of market sentiment. These figures are expected to provide critical insights into the strength of the U.S. labor market and the potential future direction of the U.S. dollar. Any significant deviation from expectations could lead to heightened volatility across major currency pairs.
In the Eurozone, speeches by ECB members could provide additional clues regarding the central bank’s stance on monetary policy amidst ongoing economic uncertainties. Similarly, in the UK, BoE speeches will be closely monitored by traders for signals regarding future rate hikes or adjustments to monetary policy.
In Japan, the ongoing risk of central bank intervention continues to loom over the USD/JPY pair, keeping traders alert for any unexpected announcements from the BoJ.
Overall, the market is expected to remain sensitive to these economic data releases and central bank communications, with the potential for increased volatility as traders react to new information.