FOREX Newsletter - October 2, 2024
Market Updates
EUR/USD
- The EUR/USD pair is trading near 1.1200, supported by sustained US Dollar weakness and large Fed rate cut bets. The pair is awaiting key economic data, including the flash German CPI and Fed Chair Jerome Powell's speech.
GBP/USD
- GBP/USD has been grinding higher to near 1.3400, driven by China's stimulus-led risk appetite, a subdued US Dollar, and policy divergence between the Fed and BoE. However, the pair has reversed from 30-month highs of 1.3430 as traders take profits on Pound Sterling longs.
Gold
- Gold prices are consolidating near record highs around $2,664, with traders cautious ahead of Fed Chair Powell's speech. The risk-on market profile and extremely overbought conditions on the daily chart are key factors influencing gold's valuation.
Economic Calendar Highlights
- US PCE Inflation: The upcoming US PCE inflation data is a significant event, especially after the recent Fed rate cut. This data will provide insights into the US economic health and could influence currency valuations.
- Central Bank Actions: The Swiss National Bank (SNB) is expected to cut rates for the third time, while the Reserve Bank of Australia (RBA) is likely to hold rates but may adopt a less hawkish stance as CPI falls.
Cryptocurrency Market
- Bitcoin: Bitcoin is consolidating around $63,600, having faced resistance around $66,000. On-chain data indicates short-term consolidation due to profit-taking by holders and mild decline in institutional demand.
- Ethereum and Ripple: Ethereum and Ripple are gaining momentum, establishing support and breaking through key levels, hinting at potential rallies ahead.
Technical Analysis
- EUR/USD: The pair's inability to break above 1.1200 is a focus point, with sustained USD weakness and China's stimulus efforts supporting the pair.
- GBP/USD: The pair's reversal from 30-month highs suggests profit-taking, but the broader risk-on market profile and USD softness continue to support the Pound Sterling.
Upcoming Events
- Fed Chair Powell's Speech: Traders are awaiting Powell's speech, which could provide directional impetus for several currency pairs, including EUR/USD and GBP/USD.
- Chinese Stimulus: Continued stimulus efforts from China are maintaining risk appetite and influencing currency markets positively.
Resources
- [Forex News - FXStreet]
- [FXStreet - The Foreign Exchange Market]
- [Economic Calendar - FXStreet]
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