October 28, 2024
Going into the last week of October will focus on key market events that could influence the near-term economic landscape.
The Federal Reserve’s interest rate decision, set for Wednesday, will be a primary driver for markets. Analysts largely anticipate that the Fed will maintain the current rate, following last week’s positive job data and balanced inflation trends.
KEY ECONOMIC INDICATORS
Japan BoJ interest rate decision – 30 October 2024:
- The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings.
- Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY).
- Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
Earnings, CPI and PPI reports:
- Earnings season is still active, with reports from prominent tech firms including Intel and Adobe expected this week.
- Analysts will also examine the latest Consumer Price Index (CPI) and Producer Price Index (PPI) figures, scheduled for Tuesday and Wednesday, which could affirm whether inflation remains on a downward trajectory, supporting the Fed’s stance on rates.
NFP employment release:
- Nonfarm payrolls surged by 254,000 in September, up from a revised 159,000 in August and better than the 150,000 Dow Jones consensus forecast.
- The unemployment rate fell to 4.1%, down 0.1 percentage point, as the survey of household employment showed an even stronger picture, with a gain of 430,000.
MARKET MOVERS
S1-S3 mean potential Support points. If the market declines further, these are the potential levels it can reach.
R1-R3 mean potential Resistance points. If the market starts to increase again, these are the potential levels it can reach.
EUR/USD
Potential Long preference
Long positions above 1.08328 with targets at 1.08450 & 1.08571 in extension.
Alternative scenario
Below 1.08149 look for further downside with 1.08037 & 1.07941 as targets.
The pair’s near-term outlook points to a bullish tilt.
USD/JPY
Potential Short preference
Short positions below 151.583 with targets at 151.136 & 150.896 in extension.
Alternative scenario
Above 152.199 look for further upside with 152.384 & 152.729 as targets.
As long as the resistance at 152.199 is not surpassed, the risk of the break below 151.583 remains high.
GBP/USD
Potential Long preference
Long positions above 1.29945 with targets at 1.30092 & 1.30306 in extension.
Alternative scenario
Below 1.29610 look for further downside with 1.29499 & 1.29263 as targets.
A support base at 1.29610 has formed and has allowed for a temporary stabilisation.
Market instruments to look out for this week:
- EUR/USD
- USD/JPY
- GBP/USD
- Nasdaq100
- XAU/USD
MARKET NEWS
Why the Japanese yen is hovering near three-month lows against the dollar
- The Japanese yen is hovering near three-month lows against the U.S. dollar, after hitting 153.18 late Wednesday.
- The upcoming elections in Japan, strong growth indicators in the U.S., and still high rate differential between U.S. and Japan is pressuring the Japanese currency.
Gold falls on profit-taking after record rally
- Gold prices fell on Friday as some investors booked profit after its recent rally which hit a record high, although ongoing tensions in the Middle East helped limit the decline.
- Spot gold eased 0.6% to $2,718.83 per ounce by 1014 GMT.
- Prices had hit an all-time high of $2,758.37 on Wednesday.
- Spot silver, which hit a 12-year-high of $34.87 earlier this week, fell 1.7% to $33.13 per ounce.
- Platinum lost 1.9% to $1,006.85.
Dollar set for fourth weekly gain as investors balk at array of risks
- The dollar headed for a fourth weekly gain on Friday, as an uncertain backdrop for markets sent the yen near three-month lows ahead of an election in Japan over the weekend that could complicate the Bank of Japan’s (BOJ) plans to normalise rates.
- The dollar index was last little changed at 104.01, after having scaled a roughly three-month high of 104.57
- The yen weakened, leaving the dollar 0.1% higher on the day at 152.045 and up 1.4% this week, having shrugged off Tokyo inflation data on Friday
- That showed core consumer prices came in below the BOJ’s 2% target for the first time in five months.
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