Article by: ETO Markets
This week's forex analysis is set to revolve around significant economic events in the Asian and U.S. markets. The Australian employment report is poised to be a pivotal moment during the Asian session. In addition, Japan is slated to release trade data, and China will unveil updates on house prices, both of which will be closely watched for their implications on the global economy.
As the trading day progresses, market participants will have their eyes fixed on the U.S. Jobless Claims and the Philly Fed index, which are key indicators for the health of the American economy. Furthermore, Federal Reserve Chair Powell is scheduled to deliver a speech, making his insights and remarks of particular interest to traders and investors. These events promise to influence forex markets and set the tone for the week's price forecasts.
Last week, the EUR/USD witnessed a drop below its 20-day Simple Moving Average (SMA) as it grappled with resistance at the 1.0600 level. This descent was spurred by a broad-based strengthening of the US Dollar, driven by worsening market sentiment and surging Treasury yields. Initially, positive Chinese growth data injected optimism into the market, but geopolitical concerns swiftly stole the spotlight, dampening risk sentiment and bolstering the US Dollar. Concurrently, the 10-year Treasury yield soared to 4.92%, reaching its highest point since 2007.
Looking ahead, this week presents key events on the economic calendar. Thursday will see the release of US Jobless Claims data and the Philly Fed index, while Federal Reserve Chair Powell is set to deliver a speech at the Economics Club of New York. The EUR/USD remains locked in a bearish trend, with fundamental factors continuing to favor the US Dollar. This backdrop limits upside potential and maintains a bearish bias for the currency pair, emphasizing the downside risk...
In the recent forex analysis, Chinese Gross Domestic Product (GDP) outperformed expectations, showing a growth of 1.3% in the third quarter, surpassing the anticipated 1.0%. The annual report for the same quarter revealed a 4.9% increase, beating the expected 4.4%. Additionally, China's Retail Sales (YoY) showed robust growth at 5.5%, exceeding both the previous figure of 4.6% and the expected 4.9%.
Meanwhile, the Bank of Japan is considering revising its core Consumer Price Index (CPI) forecast for 2023 and 2024. This dovish stance, coupled with prevailing optimistic market sentiment, may continue to weaken the Japanese Yen (JPY), pointing towards a potential uptrend for the USD/JPY pair. Investors should keep an eye out for possible interventions by Japanese authorities in the forex market aimed at bolstering their currency, which could put downward pressure on the USD/JPY pair.
On Friday, Japanese inflation data will be closely watched, with the National Consumer Price Index (CPI) ex-Fresh Food for September expected to show a year-on-year increase of 2.7%, down from the previous reading of 3.1%. This data release could have significant implications for the forex market in the coming days...
