Bullish Rebound From Key Support EURUSD Eyes Higher Levels

Central Bank

Economic

Summary:

The recent low, near 1.077, aligns with the 0.618 and 0.50 Fibonacci retracement levels, suggesting this area could serve as a retracement zone with bullish targets in play.

BUY EURUSD

Close Time

CLOSED

1.09498

Entry Price

1.10800

1.09100

1.04249 +0.00643 +0.62%

39.8

Pips

Loss

1.09100

1.09083

Exit Price

1.09498

Entry Price

1.10800

Fundamentals

The U.S. Bureau of Labor Statistics reported that nonfarm payrolls grew by 254,000 jobs in September, following a 72,000-job upward revision for the previous two months. The unemployment rate dropped to 4.1%, suggesting ongoing strength in the labor market.

Early indications showing strong demand for workers and low layoff levels, further suggest that the job market remains resilient, easing concerns about a potential slowdown.

October’s employment report will capture the impact of last month's Boeing strike, which involved approximately 33,000 factory workers. Another key labor event, the brief U.S. dockworkers’ strike, ended after three days and is unlikely to directly affect payroll figures.

In September, the ADP employment change report exceeded expectations, adding 143,000 new jobs versus a forecast of 120,000. This comes ahead of the official Nonfarm Payrolls (NFP) data, which investors are closely monitoring for confirmation of this labor market strength.

Market sentiment aligns with the Federal Reserve’s projections, with the CME FedWatch Tool showing a 93.5% probability of a 25 basis point rate cut in November. Only 6.6% of market participants expect a more significant reduction of 50 basis points.

The Eurozone's economic outlook has been dampened by weaker-than-expected inflation data. The Harmonized Index of Consumer Prices (HICP) rose by 1.8% year-on-year in September, missing forecasts of 1.9% and down from the 2.2% increase in August. Core inflation also declined slightly, registering at 2.7% compared to 2.8% in the previous month.

These numbers indicate that overall inflation has now dipped below the European Central Bank’s (ECB) 2.0% target, increasing the likelihood of additional rate cuts by the ECB. Such a move could result in capital outflows and weaken the Euro.

ECB policymakers favoring further monetary easing are preparing to advocate for another rate cut in the coming months, following a series of disappointing economic reports. However, this push may face resistance from more conservative members of the governing council.

Initially, officials were not expecting another rate cut during the October 17 meeting, as borrowing costs had already been lowered. This view was supported by sluggish growth projections and the belief that inflation would continue to decline gradually.

However, ongoing weak business activity across the Eurozone, declining confidence in Germany, and a notable slowdown in wage growth have bolstered the argument for further easing. Policymakers with a "dovish" stance are increasingly advocating for more stimulus, and recent economic challenges have intensified this momentum. Bullish Rebound From Key Support EURUSD Eyes Higher Levels_1

Bullish Rebound From Key Support EURUSD Eyes Higher Levels_1

Technical Analysis

The EUR/USD temporarily dipped below the 1.100 level and appears to be forming a significant support zone. The recent low, near 1.077, aligns with the 0.618 and 0.50 Fibonacci retracement levels, suggesting this area could serve as a retracement zone with bullish targets in play. The key resistance remains at 1.1200, a level that has been tested three times recently.

The 100- and 200-period moving averages are positioned above 1.1090, and their proximity could indicate a potential crossover after a pullback. If the price respects the downtrend line, there could be an upward move toward the 0.50 Fibonacci retracement level, offering a bullish target. Conversely, a break below 1.088 could pave the way for more significant declines.

Trading Recommendations

Trading direction: Buy

Entry price: 1.0950

Target price: 1.1080

Stop loss: 1.0910

Validity: Oct 17, 2024 15:00:00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Eva Chen

Economic

Commodity

Summary:

Tensions in the Middle East have pushed WTI crude prices higher. Currently, the market's focus on the conflict has not dissipated, and risk sentiment remains tilted toward the upside.

BUY WTI

Close Time

CLOSED

72.499

Entry Price

80.000

66.000

69.447 +0.305 +0.44%

88.8

Pips

Loss

66.000

71.611

Exit Price

72.499

Entry Price

80.000

Fundamentals

Rising tensions in the Middle East have sparked concerns about potential supply disruptions, leading to a surge in oil prices. Israeli Prime Minister Netanyahu has confirmed he is considering an airstrike on Iranian oil facilities in retaliation for Tehran's missile attack on Israel.

This escalating conflict, described as the most severe in the region since the Gulf War, led to a sharp increase in oil prices last week. However, prices have not yet spiraled out of control, largely because OPEC+ has substantial spare capacity that can be deployed if necessary to stabilize the market.

Caution Against Chasing the Rally on Over-Correction_1

Technical Analysis

In last week's surge, WTI crude broke above the neckline of a double-bottom pattern to suggest a reversal of the previous downtrend. The price is currently hovering around $75.50 and looks due for a retest.

In the 4-hour chart, the Fibonacci retracement tool shows that the 38.2% level is near the previous neckline resistance, which may now serve as support at around $72.00. A larger correction could reach the 50% Fibonacci level at $70.80 near the 100 SMA dynamic support or the 61.8% level at $69.82.

Regarding moving averages, the 100 SMA is below the 200 SMA, indicating the path of least resistance is downward, or that support levels are more likely to break than to hold. However, the gap between these indicators is narrowing, which reflects weakening bearish pressure and the potential for a bullish crossover.

If this materializes, WTI crude could continue its rebound from any of the Fibonacci levels and make its way back up to the swing high and beyond. Note that the span of the double bottom ranges from $66.30 to $72, so the resulting rally could be of at least the same size.

The stochastic oscillator has been indicating overbought conditions for quite some time, though, so heading south would confirm a return in selling pressure. There is ample room for the indicator to fall before reaching oversold conditions, suggesting the price could keep following suit. The RSI also appears ready to turn south, indicating strengthening bearish momentum. Therefore, corrections could persist until the oscillators reach oversold territory and turn upward. In terms of trading, strategic positioning remains key.

Trading Recommendations

Trading Direction: Buy

Entry Price: 72.50

Target Price: 80.00

Stop Loss: 66.00

Valid Until: Oct 22, 2024 23:55:00

Support: 73.13, 72.20, 70.35

Resistance: 76.22, 77.21, 78.76

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

Moderate growth in European consumer spending boosts confidence in economic growth. The market focus will shift to the Reserve Bank of New Zealand's rate decision on Wednesday.

SELL EURNZD

Close Time

CLOSED

1.79248

Entry Price

1.72760

1.81600

1.84394 +0.00401 +0.22%

26.0

Pips

Profit

1.72760

1.78988

Exit Price

1.79248

Entry Price

1.81600

Fundamentals

During the Asian and European sessions on Monday, the euro extended its gains against the New Zealand dollar, approaching 1.7872. Moderate growth in Eurozone consumer spending has boosted confidence in economic growth, providing some upward momentum for the pair. The Reserve Bank of New Zealand's (RBNZ) rate decision on Wednesday will be the main focus.

Last week, the New Zealand dollar benefited from China's decision to take stimulus measures to revive economic activity. The latest surge in the EURNZD is due to the market pricing in an increased probability of a 50 basis point rate cut by the RBNZ.

Earlier data showed that consumer spending in the Eurozone grew slightly in August, signaling a recovery, albeit a modest one, as the momentum of rising prices has eased.

European Central Bank (ECB) Governing Council member François Villeroy de Galhau pointed out in an interview with La Repubblica that the "balance of risks" in the Eurozone economy has changed. Villeroy stressed the importance of maintaining "full optionality" at the monetary policy meeting this month and emphasized a pragmatic approach—evaluating the situation "meeting by meeting"—which is essential. This adds to the growing chorus within the ECB suggesting that October meeting could bring about further easing if conditions warrant it. The ECB's wait-and-see approach has weakened euro assets.

On Wednesday, the market will receive the RBNZ rate decision. The last meeting took place on August 14, where they cut rates by 25 basis points and hinted at further cuts due to expected inflation remaining around the midpoint of their target range of 1-3%.

This rate cut decision came a year earlier than previously forecast by the RBNZ. The latest forecast shows that the cash rate will reach 4.9% in Q4 2024. However, investors took a more aggressive stance immediately following the central bank's decision, which anticipated a rate cut of more than 30 basis points in October.

Since then, data has shown a larger-than-expected decline in retail sales for Q2, and it still showed contraction although overall GDP growth was better than expected. Q1 data was revised down to a modest growth of 0.1% after the economy encountered a recession in the second half of 2023.

Now investors are confident that the central bank will cut rates by 50 basis points on Wednesday, followed by another 50 basis point cut in November, which suggests that the New Zealand dollar may be skewed to the upside. If policymakers do proceed with two cuts and signal a more aggressive easing stance, it will only confirm market expectations; therefore, the New Zealand dollar is unlikely to depreciate significantly.

On the other hand, if they cut rates by only 25 basis points—whether to wait for more data or due to the lack of updated economic forecasts available at this meeting—then the New Zealand dollar may resume its previous downward trend.

Technical Analysis

The EURNZD's rebound last Friday was in line with expectations. However, the rebound is likely to come to an end as part of the decline starting from August 5, with the demand zone nearing the completion of testing the supply zone at 1.7886. The downtrend is expected to resume following consolidation. The target range is the bottom of the consolidation range initiated in mid-June at 1.7381, with further downside to test the next demand zone between 1.7275 and 1.7166. The recommended strategy is to sell at highs.

Trading Recommendations

Trading Direction: Sell

Entry Price: 1.7886

Target Price: 1.7276

Stop Loss: 1.8160

Valid Until: Oct 22, 2024 23:55:00

Support: 1.7381, 1.7275, 1.7166

Resistance: 1.7886, 1.7942, 1.8030

Risk Warnings and Disclaimers

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Adam

Bond

Summary:

As of October 7, 2024, the USD/JPY pair is trading at 148.28 after hitting resistance near 148.60. The market is reacting to the strength of the USD thanks to better-than-expected US economic reports, but the Japanese Yen is showing signs of recovering from previous lows...

SELL USDJPY

Close Time

CLOSED

148.070

Entry Price

146.800

148.600

156.302 -1.112 -0.71%

1.1

Pips

Profit

146.800

148.059

Exit Price

148.070

Entry Price

148.600

The USD/JPY pair saw a strong rally, breaking above 148.50 earlier in the session. The rise was largely driven by positive economic data from the US, with the jobs report showing the labor market remained strong and the unemployment rate fell to 4%. However, the Japanese Yen is looking to rebound amid signs that the BoJ could step up its intervention in the market if the Yen weakens further.

Additionally, a sharp rise in US bond yields to near 4% has put further pressure on the Yen, although investors are now cautious about the possibility that USD/JPY could hit strong resistance around 149.00 and correct from there.

Market psychology

The overall market sentiment is cautious, with investors anticipating that the USD/JPY rally could face correction pressure due to the potential recovery of the Yen. With the BoJ likely to continue its negative interest rate policy and intervene in the market, traders are closely watching the moves from Japan. At the same time, expectations that the Fed will continue to maintain high interest rates in the near term also support the short-term rally of the USD, but may cause the market to encounter greater volatility.

Technical analysis

USD/JPY: Xu Hướng Giảm và Khuyến Nghị Bán_1

USD/JPY is trading above the Ichimoku cloud, a strong bullish signal, but the indicator suggests that the upside momentum may slow as the pair approaches strong resistance at 148.60. Failure to clear this level could see USD/JPY correct to support levels below 148.00 in the short term. The Stochastic indicator is currently in overbought territory, suggesting that selling pressure could increase in the short term as investors look to book profits from the recent strong rally. USD/JPY is trading near the upper band of the Bollinger Bands, suggesting a potential downside correction as the price hits resistance. The first support level to watch is 147.80, and a break below this level could see the pair fall further.

Based on technical indicators and market sentiment, a short-term sell strategy for USD/JPY is recommended with the expectation that the exchange rate will correct from the current resistance level.

Trading Recommendations

Entry: 148.07 (current price).

Take Profit: 147.80 (nearest support zone) or further at 147.50 if the downtrend continues.

Stop Loss: 148.60 (if price breaks above this resistance level).

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

On October 7, 2024, the EUR/AUD pair is trading around 1.6132 after hitting resistance at 1.6170. The market is reacting to the slight weakness in the Euro due to recent economic data from Europe that fell short of expectations...

SELL EURAUD

Close Time

CLOSED

1.61620

Entry Price

1.60500

1.61800

1.66779 +0.00693 +0.42%

18.0

Pips

Loss

1.60500

1.61800

Exit Price

1.61620

Entry Price

1.61800

EUR/AUD experienced a brief rally at the start of trading on October 7, but quickly corrected after hitting resistance at 1.6170. The main reason was the decline in European economic data, including a decline in manufacturing and exports, which put pressure on the Euro. Meanwhile, the Australian economy continued to receive good news from trade and goods export reports, helping the AUD maintain its strength.

Geopolitical factors are also weighing on the pair, particularly uncertainty over the policies of the European Central Bank (ECB). Investors are now concerned that the ECB may maintain its tight monetary policy, which will not provide enough upside momentum for the Euro in the near term.

Market psychology

The general market sentiment is currently biased towards selling EUR/AUD due to expectations that the Euro will continue to weaken amid the economic difficulties in Europe. The number of investors holding long positions in the Euro is decreasing, and selling pressure is increasing as investors seek safer assets or assets with higher yield prospects such as the AUD. The market is now closely watching the next economic reports from Europe to assess whether the Euro can recover in the short term.

Technical analysis

EUR/AUD is currently trading near the upper Bollinger Bands, suggesting that selling pressure could increase if it fails to break above the resistance at 1.6170. This suggests a further correction towards the support at $1.6120 in the short term.

The chart shows that EUR/AUD is moving within the cloud, suggesting that the sideways or bearish trend is likely to continue. Resistance at 1.6170 remains strong and if it fails to break, the pair could return to support below 1.6100.

The Stochastic indicator is approaching the overbought zone, indicating that a short-term bearish correction may occur in the coming trading sessions. Based on technical analysis and market sentiment, a short-term sell strategy for EUR/AUD is recommended with the expectation that the exchange rate will continue to correct downwards in the short term.

Trading Recommendations

Entry: 1.6162 USD (current price).

Take Profit: $1.6050 (nearest support zone) or further at $1.6020 if the downtrend is maintained.

Stop Loss: 1.6180 USD (if price breaks this resistance level).

Risk Warnings and Disclaimers

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Alan

Commodity

Central Bank

Summary:

As U.S. non-farm payrolls (NFP) data exceeded expectations, the market believes that the Federal Reserve will make smaller interest rate cuts. Technically, the bullish momentum is weakening, so there is an increasing risk of a short-term pullback.

SELL XAUUSD

Close Time

CLOSED

2655.47

Entry Price

2595.00

2687.00

2623.41 +28.97 +1.12%

373.2

Pips

Profit

2595.00

2618.15

Exit Price

2655.47

Entry Price

2687.00

Fundamentals

On Monday during the Asian session, gold prices traded near $2650 and posted its fourth consecutive day of decline. Last Friday, the strong U.S. non-farm payrolls data drove the dollar higher, weighing on the gold price.

The U.S. September non-farm payrolls data was released last Friday, October 4. The report showed that total non-farm payrolls increased by 254,000, higher than the revised 159,000 in August, also better than the expected 150,000. The unemployment rate fell 0.1% to 4.1% in September MoM, lower than the expected 4.2%. The better-than-expected employment and lower unemployment rate reflect a stronger job market than Wall Street forecasts.

In addition, the U.S. Bureau of Labor Statistics also announced that the downward revisions to the employment data for July and August were wrong and those data needed to be revised again. The July employment data was revised upward from 89,000 to 144,000. The August job numbers were revised upward from 142,000 to 159,000.

The revised July and August nonfarm payrolls data and September's better-than-expected data together indicate that the U.S. economy is very strong, and on paper there is no need to cut interest rates significantly.

As a result, the market believes that the Fed will continue to cut interest rates by 25 basis points in November and December. The expectations for the Fed's rate cuts in the next four meetings have been lowered to less than 100 basis points.

So far, the CME FedWatch Tool shows that the market forecasts the probability of the Fed cutting rates by 25 basis points in November is 93.1%, and the probability of cutting rates by 50 basis points is 6.9%.

These encouraging U.S. reports undermined hopes that the Fed would cut rates further, which boosted the dollar and weighed on the price of dollar-denominated gold.

Technical Analysis

Gold Prices Will Retreat as U.S. NFP Data Exceeds Expectations_1

Gold prices are still in an upward channel regarding the long-term trend, but the upward momentum has weakened recently.

Looking at the moving averages, the short-term averages have flattened or even slightly moved downward, which may indicate that in the short term, gold prices lack sufficient bullish momentum and face some downside pressure.

In the 1-hour candlestick chart, gold prices fluctuated greatly after the non-farm payrolls data was released, once dipping to $2631.98, and it went down again after rebounding to $2670. At present, the gold price is trading in a range.

Overall, gold prices are still in the bullish trend, but the strong September non-farm payrolls data weighed on gold, so the risk of retracement increased. It is recommended investors go short on gold at high levels. The first target can be set near $2590.

Trading Recommendations

Trading direction: Sell

Entry price: 2558.00

Target price: 2595.00

Stop loss: 2687.00

Valid until: Oct 21, 2024 15:00:00

Support: 2639.57, 2631.98, 2624.54

Resistance: 2656.30, 2670.04, 2685.48

Risk Warnings and Disclaimers

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Manuel

Forex

Economic

Summary:

This zone has provided a springboard for EUR/AUD, with bullish momentum potentially pushing the pair toward the local resistance at 1.6475.

BUY EURAUD

Close Time

CLOSED

1.61150

Entry Price

1.64750

1.59900

1.66779 +0.00693 +0.42%

56.0

Pips

Profit

1.59900

1.61710

Exit Price

1.61150

Entry Price

1.64750

Fundamentals

Lower than expected inflation data from the Eurozone has significantly affected the region’s economic outlook. The Harmonized Index of Consumer Prices (HICP) increased by 1.8% year-on-year in September, falling short of both the 2.2% rise seen the previous month and the projected 1.9%. Core inflation also edged down, registering 2.7% annually, compared to 2.8% in August, and missing market expectations.

These figures indicate that overall inflation has now dropped below the European Central Bank’s (ECB) 2.0% target, with core inflation also trending downward. This raises the likelihood of further rate cuts from the ECB, which could potentially lead to capital outflows and a weaker Euro.

Within the ECB, policymakers advocating for additional monetary easing are preparing to propose another rate cut next month, following a series of underwhelming economic reports. However, this effort could face opposition from more conservative members of the governing council, according to insiders.

Initially, ECB officials had deemed another rate cut at the October 17 meeting unlikely, as borrowing costs had already been lowered earlier in the month. This stance was based on sluggish growth forecasts and expectations that inflation would continue to decrease, albeit unevenly, over the next year.

Nonetheless, weak business activity throughout the Eurozone, coupled with declining confidence in Germany and a notable slowdown in wage growth, has strengthened the case for further easing. Policymakers with a "dovish" stance are increasingly advocating for additional stimulus measures, and recent economic setbacks have amplified the momentum toward this outlook.

Meanwhile, in its semi-annual Financial Stability Review, the Reserve Bank of Australia (RBA) urged households to avoid taking on excessive debt in anticipation of falling interest rates. The report emphasized that the financial system remains resilient despite ongoing challenges posed by high interest rates and persistent inflationary pressures.

The RBA also pointed to external risks, such as those arising from an increasingly digitalized global economy, financial imbalances in China, and the possibility of sudden adjustments in global asset prices, which could have repercussions for Australia’s financial stability.

At its latest meeting, the Reserve Bank of Australia (RBA) opted to keep the cash rate unchanged at 4.35%, aligning with market expectations. The central bank stressed that inflation remains well above its target, stating, “Inflation is still well above the midpoint of the 2-3% range.”

Technical Analysis

The EUR/AUD pair reached a local low of 1.6000 on October 1, a price level last seen on June 25, forming a double bottom. This zone has provided a springboard for EUR/AUD, with bullish momentum potentially pushing the pair toward the local resistance at 1.6475.

The 100 and 200 period moving averages are positioned at 1.6334 and 1.6455, giving the price ample room to rise before encountering these levels. With escalating geopolitical risks, the EUR may present itself as a solid option, while the AUD remains pressured by broader risk sentiment. Buying Signals as Markets Rebound from Yearly Lows_1

Buying Signals as Markets Rebound from Yearly Lows_1

Trading Recommendations

Trading direction: Buy

Entry price: 1.6115

Target price: 1.6475

Stop loss: 1.5990

Validity: Oct 17, 2024 15:00:00

Risk Warnings and Disclaimers

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