As we head into Wednesday, November 6, 2024, global markets are positioned for a session likely to experience heightened volatility, driven by a series of significant economic releases and central bank activities. The U.S. dollar continues to be the focal point as traders digest recent data and prepare for additional reports, particularly in light of the upcoming FOMC statements and other central bank decisions.
In the currency markets, the EUR/USD pair exhibited a strong upward trend, largely fueled by economic indicators from the Eurozone that have slightly surpassed expectations, combined with a softer stance from the U.S. dollar. The euro is gaining momentum as traders assess the implications of recent European Central Bank (ECB) comments and economic reports.
Meanwhile, the GBP/USD pair saw upward momentum, reflecting the market’s response to recent U.K. data and positioning ahead of Bank of England (BoE) communications. The pound is benefiting from a general market optimism, though traders remain cautious ahead of the BoE’s next moves, given the mixed economic outlook in the U.K.
The AUD/USD pair showed notable gains, reflecting positive risk sentiment and recovery in the Australian dollar, driven by favorable economic indicators and a stable stance from the Reserve Bank of Australia (RBA). Traders are closely monitoring risk-related developments as they anticipate further U.S. economic data releases that could impact broader market sentiment.
EUR/USD
Technicals in Focus
The EUR/USD pair surged, closing near the 1.0925 level after a sharp upward movement. This momentum was driven by recent Eurozone economic data that outperformed slightly, giving the euro an edge against the U.S. dollar. On the technical front, the MACD is showing strong upward momentum with a widening gap, indicating bullish sentiment. The Stochastic Oscillator has moved into overbought territory, suggesting a possible correction could be on the horizon. The 14-day RSI remains elevated, reflecting the pair’s current bullish bias.
Trading Strategy: Neutral to Buy
Consider buying above 1.0900-1.0920 with targets at 1.0950-1.0980, with a stop loss below 1.0870. Alternatively, watch for a correction and consider selling below 1.0870 with targets of 1.0840-1.0820, with stops above 1.0900.
GBP/USD
Technicals in Focus
The GBP/USD pair advanced, closing around the 1.3025 mark following a steady climb throughout the session. The pound strengthened due to better-than-expected U.K. economic data and rising market confidence in the BoE’s forthcoming policy approach. On the technical side, the MACD is indicating bullish momentum, while the Stochastic Oscillator is approaching overbought levels, signaling a potential pullback. The 14-day RSI is also elevated, further highlighting the pair’s current upward trend.
Trading Strategy: Neutral to Buy
Buy above 1.3000-1.3020 with targets at 1.3050-1.3080, with a stop loss below 1.2970. Alternatively, consider selling if there is a reversal below 1.2970 with targets of 1.2940-1.2910, with stops above 1.3000.
AUD/USD
Technicals in Focus
The AUD/USD pair demonstrated a significant rebound, closing near the 0.6635 level after gaining ground through the session. This movement was largely influenced by a rise in risk sentiment and stable Australian economic indicators. On the technical side, the MACD is pointing upwards, indicating growing bullish momentum, while the Stochastic Oscillator has entered overbought territory, hinting at a possible near-term correction. The 14-day RSI is neutral to slightly bullish, reflecting the pair’s gradual upward trend.
Trading Strategy: Neutral to Buy
Buy above 0.6620-0.6630 with targets at 0.6660-0.6680, with a stop loss below 0.6600. Alternatively, consider selling below 0.6600 with targets of 0.6570-0.6550, with stops above 0.6620.
Market Outlook
Looking ahead, U.S. economic data releases, particularly initial jobless claims and non-farm productivity data, will be key factors to watch as they could provide insights into the health of the U.S. labor market and impact the U.S. dollar’s strength. Additionally, any developments from the ECB and BoE could significantly influence the EUR/USD and GBP/USD pairs as traders await further clarity on the central banks’ policy stances.
In Canada, employment data and oil prices will be closely observed for their impact on the USD/CAD pair. The Australian dollar’s movement will also be closely tied to shifts in global risk sentiment and U.S. data, which could alter the current trend.
Overall, the market is expected to remain sensitive to economic data and central bank communications, with the potential for increased volatility as traders adjust their positions in response to new information.