Putting aside the stock rally, investors should keep one eye on Friday nonfarm payrolls data, the most highly anticipated economic report. Uncertainty now hangs over the release as a possible government shutdown on Wednesday might force the report’s release to be postponed. Futures traders are anxiously watching these developments. Consequently, the USD/JPY currency pair recently started to float lower, positioning itself to challenge the symbolic 150 threshold. The euro area is preparing to publish the first consumer price index (CPI) inflation figures for September, Wednesday. This short update will provide an important context for all market participants.
The relationship between all of these economic indicators plays an important role because together they can determine the direction of many different currency pairs. Our labor market is the strongest in U.S. history, and our economy continues to grow at a steady, robust pace. To maintain this momentum, the Federal Reserve has indicated they will likely need to take several more successive rate cuts.
USD/JPY Analysis
The USD/JPY has been in a strong downtrend. It is near a key support area and is looking to test that 150 area in the near future. Market analysts have their eyes trained on support very close to that 200-day simple moving average (SMA). They notice the great variation from 146.50 to 147.40. These technical indicators are indispensable guideposts for traders looking to survive in this boom-bust market.
With worries about a possible US government shutdown starting to take hold, investors are repositioning their bets on USD/JPY. The jobs data due to be released Friday makes everything more complicated. Market expectations will likely swing drastically based on how each of these reports turns out. Should the government shutdown occur, it would add an additional layer of uncertainty for traders, compelling them to weigh their options carefully.
USD/JPY bullish analysts still think remaining above these support levels will be key to protecting USD/JPY. Should these levels be broken, then we may experience more downside selling pressure. Traders are on guard ahead of tomorrow’s nonfarm payrolls report. They watch carefully to see how all these factors affect the currency pair.
EUR/USD Outlook
At the same time, the EUR/USD currency pair is at a very important crossroads as the pair hovers around its 50-day SMA. As such, the 20-day SMA has been limiting upside progress in the vicinity of the 1.1730-handle, putting a squeeze on optimistic specs. The anticipated release of September’s CPI inflation figures in the euro area on Wednesday will be pivotal for market sentiment.
Forecasts indicate that inflation will remain a little above the European Central Bank’s target of 2.0%. Here’s what it means for future decisions on monetary policy. Thursday’s inflation data may be the most impactful. It would show whether the central bank is on top of economic growth and any emerging threats from rising prices.
After all, the price action of late illustrates that EUR/USD has carved a deep bottom. Still, traders should remain on their toes as they await key economic indicators that may further support this newfound stability or bring it crashing down. The report’s result will probably determine market direction in the near term.
AUD/USD Trends
The AUD/USD pair is hovering near its 50-day SMA, showing that traders are experiencing a period of uncertainty. For AUD/USD analysts, the pair need to clear above the 0.6600 mark to gain new buying momentum. On the other hand, if the duo drops under 0.6540, a bearish continuation could start to be a plausible scenario.
Investors are heavily focused on the RBA’s next meeting. They look for the RBA to hold its key rate steady at 3.60% on Tuesday. This decision probably indicates a risk-averse attitude in the face of mixed economic indicators and unknown global conditions.
Traders will be following these developments closely as they may prove highly influential to AUD/USD’s direction over the coming weeks and months. The technical indicators in conjunction with the fundamental data will be a major factor in grasping the market movement in this currency pair.