FOREX Newsletter - October 10, 2024

EUR/USD Update

• The EUR/USD pair has been struggling to gain traction, trading below 1.1100 following upbeat US employment data. The US private sector added 143,000 jobs in September, exceeding expectations and supporting the USD.
• Despite this, the pair has shown some resilience, trading near 1.1200 in early European sessions due to sustained USD weakness and China's stimulus-led market optimism.

GBP/USD Analysis

• GBP/USD continues to trade below 1.3300, despite a broad USD softness. The pair reversed from 30-month highs of 1.3430 as traders took profits on Pound Sterling longs.
• The Pound Sterling remains strong, with the GBP/USD pair benefiting from a more cautious stance by the Bank of England compared to the Federal Reserve.

US Dollar Outlook

• The US Dollar Index (DXY) has declined to new lows near 100.20, marking its third consecutive weekly decline. This decline is partly due to large Fed rate cut bets and China's stimulus efforts.
• Investors are now focusing on US economic health, with key indicators such as the Nonfarm Payrolls and PCE inflation data set to influence the USD's valuation in the coming days.

Gold and Commodities

• Gold price reached a new record high above $2,600, supported by the recent 50-basis-point cut in interest rates by the Federal Reserve. However, it has pulled back slightly, touching a daily low around $2,655.
• The gold price is expected to remain volatile, with Fedspeak and PCE inflation data potentially influencing its valuation in the near term.

Cryptocurrency Market

• Bitcoin has been consolidating around the $63,600 level, with on-chain data indicating short-term consolidation due to profit-taking by holders. Despite this, Bitcoin remains poised for further gains, potentially targeting $65,000.
• Ethereum and Ripple are also showing signs of potential rallies as they establish support and break through their key levels.

Economic Calendar Highlights

• The upcoming week is crucial, with the US PCE inflation data, Nonfarm Payrolls, and Fed Chair Jerome Powell's speech set to impact the markets. The Swiss National Bank (SNB) is expected to ease for the third time, while the Reserve Bank of Australia (RBA) is likely to hold rates.

Key Events to Watch

• US PCE Inflation Data: Scheduled for release, this data will be critical in determining the Fed's future monetary policy decisions.
• Nonfarm Payrolls: The September report will provide insights into the US labor market and influence USD valuation.
• Fed Chair Powell's Speech: Powell's comments can significantly impact market sentiment and currency pairs.

References: FXStreet - Latest News: EUR/USD Forecast, News and Analysis: FXStreet - The Foreign Exchange Market: Forex News - FXStreet: Economic Calendar - FXStreet

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