Buying Signals as Markets Rebound from Yearly Lows

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

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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Manuel

Central Bank

Economic

Summary:

The USD/CHF pair reached the support line near 0.8395 over several days, forming a solid base from which it has started to rise.

BUY USDCHF

Close Time

CLOSED

0.85347

Entry Price

0.88050

0.84200

0.89276 -0.00488 -0.54%

123.9

Pips

Profit

0.84200

0.86586

Exit Price

0.85347

Entry Price

0.88050

Fundamentals

Nonfarm payrolls increased by 254,000 jobs in September, following an upward revision of 72,000 in the previous two months, according to the U.S. Bureau of Labor Statistics' report released on Friday. The unemployment rate dropped to 4.1%.

Along with early data from this week indicating that demand for workers remains healthy and layoffs continue to be low, the payroll report is likely to ease concerns that the labor market is cooling too quickly.

The October employment report will reflect the impact of last month’s strike involving about 33,000 Boeing Co. factory workers. Another major strike, that of U.S. dockworkers, ended after three days and is unlikely to have a direct effect on the payroll count for the month.

In September, the U.S. ADP employment change exceeded expectations with the addition of 143,000 new jobs, surpassing the forecast of 120,000 and the revised August figure of 103,000. Investors are now closely watching the official Non-Farm Payrolls (NFP) report, set for release on Friday, which will confirm these preliminary numbers.

The U.S. ISM Manufacturing Purchasing Managers' Index (PMI) remained flat at 47.2 in September for the second consecutive month, falling short of the expected increase to 47.5. Additionally, the ISM Manufacturing Prices Paid index decreased to 48.3 from 54.0, signaling further contraction in the manufacturing sector. Shifting focus to employment, the Job Openings and Labor Turnover Survey (JOLTS) showed an increase in job openings, rising to 8.04 million in August, well above the revised figure of 7.7 million from the prior period.

Market sentiment aligns with the Federal Reserve’s outlook, as the CME FedWatch Tool shows a 93.5% chance of a 25 basis point rate cut in November, with only 6.6% of market participants expecting a larger reduction of 50 basis points.

On September 26, the Swiss National Bank (SNB) cut its policy rate by 25 basis points, bringing it to 1%, the lowest level since early 2023. This decision aligns with similar actions taken by the European Central Bank (ECB) and the U.S. Federal Reserve to lower borrowing costs in response to a slowdown in inflation. This marks the SNB’s third rate cut this year, following a period of sustained inflation within the bank’s 0% to 2% target range over the last 15 months.

The move comes as Thomas Jordan, Chairman of the SNB, approaches the end of his 12-year tenure. Jordan indicated that further rate cuts may be necessary in the coming quarters to maintain medium-term price stability. The SNB also revised its inflation forecasts for 2025 and 2026 downward, projecting consumer price growth of just 0.6% by the second quarter of 2027. Bullish Momentum in USDCHF Amid the Impact of U.S. Jobs Data_1

Bullish Momentum in USDCHF Amid the Impact of U.S. Jobs Data_1

Technical Analysis

The USD/CHF pair reached the support line near 0.8395 over several days, forming a solid base from which it has started to rise. The last time it was at this level was December 28 of last year, signaling that the bottom may be around the 0.8400 zone. From here, we could see continued bullish momentum toward the upper part of the descending trendline.

The 100- and 200-period moving averages are positioned above 0.8700, aligning with the 0.50 and 0.618 Fibonacci retracement levels, respectively. This provides a second confirmation of our upward targets, coinciding with a resistance zone reached on December 8 of last year.

Trading Recommendations

Trading direction: Buy

Entry price: 0.8535

Target price: 0.8805

Stop loss: 0.8420

Validity: Oct 17, 2024 15:00:00

Risk Warnings and Disclaimers

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Eva Chen

Economic

Stocks

Summary:

US employment data will be the focus today, with the market generally expecting stable employment growth in September. The unemployment rate may also gain importance as it is at a level the Fed considers neutral. A higher unemployment rate could reignite expectations for a 50-basis-point rate hike.

SELL USNDAQ100

Close Time

CLOSED

19891.50

Entry Price

18824.00

20680.00

21334.35 +139.90 +0.66%

4481.0

Pips

Loss

18824.00

20339.60

Exit Price

19891.50

Entry Price

20680.00

Fundamentals

The September non-farm payroll (NFP) report is the focus today, as it plays a crucial role in shaping expectations for the Fed's upcoming monetary policy decisions. Currently, the market sees a 33% probability of a 50-basis-point rate cut in November, with a 67% probability of a 25-basis-point rate cut. These probabilities have shifted significantly compared to a week ago, when the chance of a 50-basis-point cut was 50%, after Fed Chair Jerome Powell stated that there could still be two more "normal-sized" rate cuts by year-end.

It is worth noting that the Fed's September rate cut of more than the usual 50 basis points was primarily to make up for its inaction in July. Many Fed officials believe that July would have been a more appropriate time to initiate the easing cycle if they had access to subsequent economic data. Therefore, unless today's NFP report contains any major negative surprises, the Fed is likely to stick to its current plan, as outlined in the dot plot, with two additional 25-basis-point rate cuts in November and December.

September NFP is expected to increase by around 140,000, with the unemployment rate remaining at 4.2%. Average hourly earnings growth is expected to slow to 0.3% month-on-month.

Recent related data has been mixed: the ISM Manufacturing Employment Index fell sharply from 46.0 to 43.9, while the ISM Services Employment Index also declined from 50.2 to 48.0. The ADP Employment Report showed an increase of 143,000 private-sector jobs, and the four-week moving average of initial jobless claims fell slightly from 230,000 to 224,000.

Overall, these indicators suggest that while employment growth remains strong, the likelihood of a significant upside surprise in today's NFP data is relatively low.

Risk sentiment and market reactions to the NFP data will be key in influencing financial markets, including currency movements, for the remainder of October.

Technical Analysis

From a technical perspective, NASDAQ has clearly lost momentum after hitting 18,327. A decisive break below the 55-day EMA (currently at 17,587) would suggest that the rebound from 15,708.53 has been completed. In a bearish scenario, the corrective pattern from the 18,671.06 high may have already started its third wave, potentially returning to 15,708.53 or even lower.

Trading Recommendations

Trading Direction: Sell

Entry Price: 20150

Target Price: 18824

Stop Loss: 20680

Valid Until: Oct 19, 2024 23:55:00

Support: 19615, 19482, 19291

Resistance: 20129, 20320, 20595

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

As of October 4, 2024, the EUR/USD exchange rate is trading around 1.0977 after bouncing from a low near 1.0960. This recovery was driven by market sentiment towards recent US data, especially the jobs report, which weakened the USD slightly against the Euro...

BUY EURUSD

Close Time

CLOSED

1.09770

Entry Price

1.10400

1.09600

1.04249 +0.00643 +0.62%

17.0

Pips

Loss

1.09600

1.09599

Exit Price

1.09770

Entry Price

1.10400

Market Overview

The EUR/USD pair experienced a sharp decline before recovering slightly on October 4, 2024. The Nonfarm Payrolls report from the US showed impressive growth in the labor market with 147,000 new jobs created, causing the USD to strengthen. However, the Euro held firm thanks to forecasts of the possibility of the US Federal Reserve (Fed) continuing to ease monetary policy in the future, which reduced the strength of the USD.

In addition, comments by ECB Vice President Luis de Guindos that Eurozone inflation could fall below target had a strong impact on EUR/USD. However, uncertainty about the future of monetary policy in the Eurozone kept investors bullish on the Euro in the short term.

Market psychology

The current market sentiment favors the Euro due to expectations that the Fed may cut interest rates or maintain its easy monetary policy in the near future. The US jobs report, although good, is not strong enough to reverse the weakening trend of the USD in the coming sessions. Investors still appreciate the stability of the Eurozone economy, despite the inflationary challenges, and expect EUR/USD to rise further.

Technical analysis

EUR/USD: Triển Vọng Tăng Giá và Đề Xuất Mua_1

The chart shows that EUR/USD is trading below the Ichimoku cloud, but there are signs of a bounce from the 1.0960 support level. If the price continues to hold above this level, we can expect a further recovery towards 1.1040 or higher.

EUR/USD is currently hovering within the lower Bollinger Bands, suggesting a possible bounce from the support zone. The middle line of the Bollinger Bands at 1.1000 could be the first resistance level, and if this level is broken, the price could continue towards the stronger resistance zone at 1.1040(

The CCI indicator is currently showing signs of a strong recovery as it leaves the oversold zone, which reinforces the view that EUR/USD could continue to rise in the short term.

Trading Recommendations:

Entry: 1.0977 USD (current price).

Take Profit: 1.1040 USD (next resistance zone) or higher at 1.1066 USD.

Stop Loss: 1.0960 USD (if price turns down and breaks support level).

Therefore, EUR/USD is currently showing signs of recovery after falling to a key support level. With technical indicators and market sentiment both favoring the upside, a short-term buying strategy could be profitable if the pair continues to head towards the 1.1040 resistance zone in the coming sessions.

Risk Warnings and Disclaimers

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Adam

Commodity

Summary:

At 9 PM (GMT+7) on October 4, 2024, gold price was trading at 2,648 USD/ounce, in the context of a better-than-expected US jobs report with the unemployment rate falling to 4.1%...

BUY XAUUSD

Close Time

CLOSED

2649.86

Entry Price

2670.00

2630.00

2623.41 +28.97 +1.12%

201.4

Pips

Profit

2630.00

2670.00

Exit Price

2649.86

Entry Price

2670.00

The US jobs report released today showed better-than-expected growth, with 254,000 jobs created in September and the unemployment rate falling to 4.1%. This reinforced the belief that the Fed will maintain its high interest rate policy for a longer period. Although the USD was initially supported by this news, investors quickly shifted to safe-haven assets such as gold, causing the price of gold to remain stable around $2,648/ounce. The US economy shows signs of stabilization, but concerns about geopolitical tensions, especially in the Middle East, continue to support gold prices.

Investor sentiment remains positive for gold, especially as financial markets seek a safe haven from volatility. A better-than-expected jobs report has increased the likelihood that the Fed will continue to maintain high interest rates, but global economic uncertainty has kept demand for gold steady, putting some downward pressure on the USD.

Market psychology

The gold market is responding to mixed signals from the US economy and global conditions. Despite better-than-expected jobs data, investor sentiment remains favorable to gold due to its safe-haven status. Gold’s rally is supported by both technical and psychological factors. While strong US data is not enough to push gold into a sharp decline. Investors remain cautious, especially given the risks from global geopolitical developments and uncertainty about future interest rate policy.

Technical analysis

Currently, the gold price is near the middle band of the Bollinger Bands, after a slight correction from the resistance zone of $2,670. The Bollinger Bands are narrowing, indicating that volatility may increase in the coming sessions. If the price holds above the support level of $2,637, a recovery to $2,670 is possible. Meanwhile, if this support level is broken, the gold price may correct further to $2,600 before seeking upside momentum. The CCI indicator is currently approaching the buy zone, indicating that selling pressure has weakened and a short-term recovery is likely. With the current support level at $2,637, the CCI suggests a short-term upside if there is no new negative news from the market.

In the current market scenario, gold has maintained its key support at $2,637 despite a better-than-expected US jobs report. Investors continue to seek gold as a safe haven amid the volatile global economy. Technical indicators suggest that gold prices are likely to bounce from current levels, and a short-term buying strategy is recommended with a target price of $2,670-2,686 in the coming sessions.

Trading Recommendations

Entry: 2648 USD/ounce (current price).

Take Profit: 2670 USD (nearest resistance zone) or further 2686 USD (if uptrend continues).

Stop Loss: 2630 USD (if price drops further and breaks the major support level).

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

Japan's new prime minister directly stated that the current environment is unsuitable for further rate hikes, and BOJ Governor Kazuo Ueda emphasized caution when deciding on additional rate hikes. USDJPY remains below a key resistance level, and the bullish trend appears overstretched.

SELL USDJPY

Close Time

CLOSED

148.579

Entry Price

141.250

151.850

156.302 -1.112 -0.71%

99.2

Pips

Loss

141.250

149.571

Exit Price

148.579

Entry Price

151.850

Fundamentals

Japan's new Prime Minister Shigeru Ishiba stated on Wednesday, after meeting with Bank of Japan (BOJ) Governor Kazuo Ueda, that the current environment in Japan is not suitable for further rate hikes. This is the clearest statement to date opposing additional rate increases, seemingly aimed at shedding his hawkish reputation on monetary policy.

Following Ishiba's remarks, the yen weakened as the market interpreted this as reducing the likelihood of a rate hike in the near term. USDJPY briefly broke above 147.00 on Thursday, hitting a new high since September 3, following a 2% surge the previous day when it moved successively past key levels of 144.00 to 146.00.

With the US dollar rebounding and the latest comments from Japanese authorities, the bullish trend in USDJPY has become overstretched. Moving averages indicate a short-term bearish trend for the pair. The price has retested the area between the signal lines, suggesting dollar selling pressure and a likelihood that the price will continue to fall from the current level.

As part of a pullback, the market is expected to undergo a bearish correction in the next trading sessions, testing the support zone around 143.00. Then, USDJPY may rebound again and continue to grow above the 150.00 level.

Path of Least Resistance is Downward in Overbought Market_1

Technical Analysis

USDJPY continued to trade at elevated levels after breaking the September 2 high, indicating that the short-term structure has established a bottom at 139.57, with the next target to test the 38.2% retracement level at 148.11 from the 161.94 to 139.57 range. A decisive break above this level would suggest that the entire downtrend from 161.95 has completed before the Fibonacci level of 139.26. A further rebound to the 150.00 psychological level and the 61.8% retracement at 153.39 could follow. Risks will continue to rise as long as the 141.63 support level remains intact.

However, we believe that in the short term, the initial wave of shorts will be positioned as the stop-loss orders above the September 2 high are triggered, with more shorts adding to their positions after testing the 147.65 level. The market is currently awaiting a catalyst, and the path of least resistance is downward.

Overall, the short-term bullish outlook for USDJPY is not promising. For the pair to resume its previous upward trajectory, a supportive structure is required, but it is unlikely in the current market environment.

Trading Recommendations

Trading Direction: Sell

Entry Price: 148.80

Target Price: 141.25

Stop Loss: 151.85

Valid Until: Oct 19, 2024 23:55:00

Support: 145.28, 144.51, 143.35

Resistance: 147.34, 148.21, 149.37

Risk Warnings and Disclaimers

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Manuel

Central Bank

Economic

Summary:

The EUR/GBP has rebounded from the low of 0.8310 reached on September 30 and, two days ago, hit a local high of 0.8432, where it faced strong resistance.

SELL EURGBP

Close Time

CLOSED

0.84035

Entry Price

0.83200

0.84400

0.82976 +0.00098 +0.12%

48.3

Pips

Profit

0.83200

0.83552

Exit Price

0.84035

Entry Price

0.84400

Fundamentals

At the beginning of the week, the UK's Gross Domestic Product (GDP) report revealed disappointing results. The economy expanded by 0.5% quarter over quarter in the second quarter, slightly below both the expected growth rate and the previous increase of 0.6%. On an annual basis, GDP rose by 0.7%, also falling short of the anticipated growth rate of 0.9%

Andrew Bailey indicated that the UK central bank could adopt a more aggressive approach to interest rate cuts as inflation remains contained. Bailey's comments have sparked expectations of a quarter-point reduction in November and a strong possibility of a consecutive cut in December.

Financial markets are currently anticipating a rate reduction from the Bank of England (BoE) later this year, particularly during its upcoming meetings. The sustained inflation rate within the UK’s services sector significantly contributes to this cautious outlook on interest rates.

In August, annual services inflation—a crucial indicator that the BoE closely monitors—rose to 5.6%, up from 5.2% in July. Furthermore, Bailey's remarks during the European trading session on Tuesday suggested that the BoE’s easing cycle will proceed at a careful pace.

From an economic perspective, the preliminary S&P Global/CIPS UK Purchasing Managers’ Index (PMI) for September showed a slight decline but remained above the pivotal 50.0 mark that distinguishes expansion from contraction. The report revealed that overall private business activity dropped to 52.9, down from 53.8 in August, attributed to a sharper-than-anticipated slowdown in both the manufacturing and services sectors.

Lower-than-anticipated inflation data from the Eurozone has notably impacted the region's economic sentiment. The Harmonized Index of Consumer Prices (HICP) rose by 1.8% year-on-year in September, missing the 2.2% recorded in the previous month and the anticipated 1.9%. Core inflation also dipped slightly, coming in at 2.7% year-on-year, down from 2.8% in August, and below market forecasts.

These numbers suggest that overall inflation has now fallen below the European Central Bank's (ECB) target of 2.0%, while core inflation is also trending in that direction. This situation increases the likelihood of further rate cuts by the ECB, potentially leading to capital outflows and a weaker Euro.

Within the ECB, policymakers who favor further easing are preparing to propose another interest rate reduction next month, following a series of disappointing economic reports. However, this initiative may encounter resistance from more conservative members of the governing council, according to various sources.

Initially, ECB officials considered an additional rate cut at the October 17 meeting to be unlikely, as borrowing costs had already been lowered earlier this month. Their reasoning was based on sluggish growth forecasts and expectations of a continued but uneven decrease in inflation over the coming year.

Nonetheless, weak business activity across the Eurozone, combined with declining confidence data from Germany and a significant slowdown in wage growth, has encouraged "dovish" policymakers to advocate for further easing measures. This momentum is now perceived as a strong possibility given the recent economic setbacks. Bearish Pressure Emerges From Key Moving Average_1

Bearish Pressure Emerges From Key Moving Average_1

Technical Analysis

The EUR/GBP has rebounded from the low of 0.8310 reached on September 30 and, two days ago, hit a local high of 0.8432, where it faced strong resistance. It encountered the 100-period moving average and approached the 200-period moving average, indicating that EUR/GBP may find demand in the moving average zone. The second candle on the D1 timeframe retraced after touching the 100-period moving average.

As shown in the chart, a local downtrend line has formed, coinciding with the area where the price has resumed downward momentum, targeting the low reached last week. Conversely, if the price breaks solidly above 0.8432, we could see a new upward movement.

Trading Recommendations

Trading direction: Sell

Entry price: 0.8404

Target price: 0.8320

Stop loss: 0.8440

Validity: Oct 14, 2024 15:00:00

Risk Warnings and Disclaimers

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Buying Signals as Markets Rebound from Yearly Lows

Fundamentals

Technical Analysis

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Risk Disclosure