Primary forex markets remain in cautious consolidation. Traders are on the lookout for four major releases that can have a significant impact on the direction of currency. To begin with, the EUR/USD cross has kept its consolidative range at 1.1650 area. This stability comes amidst anticipation of Germany’s Factory Orders report, which is set to provide insights into the strength of the eurozone’s largest economy.
Next up, the Factory Orders report! Moreover, a second revision of the Q2 euro area GDP Growth Rate will be coming out soon. This change would better reflect the quality of the region’s economic recovery. It can affect the European Central Bank’s (ECB) future monetary policy decisions on TAP. The Employment Change, the last of the eurozone’s key indicators, will be released later today. This will have a profound effect on the general value chain in Europe.
At the same time, commodity markets have been drastically volatile. Prices of American West Texas Intermediate (WTI) crude oil have pulled back even further, returning to two-week lows under $63.00. Traders are freaking out over falling demand forecasts and OPEC+ production increases. Market participants are still working through these concerns.
The envy of other markets, the precious metals market has been a flurry of activity. Silver prices continued their meteoric climb. Silver prices finally paused their rally after hitting a 31-year high, breaking above $41.00. Gold prices have paused today after a multi-day streak of gains. It retreated after surging to record highs around $3,580 Wednesday.
Now, consider the idea of currency pairs. GBP/USD continues to oscillate between clear up days and down days, while trading in a very narrow band of around 1.3450-1.3440. The duo’s ups and downs illustrate pervasive market uncertainty as traders continue to digest multiple economic data points and ongoing geopolitical news.
USD/JPY has continued its weekly bullish reversal, recovering the key 148.00 obstacle. This dramatic movement is evidence that the U.S. dollar is experiencing significant new strength against the Japanese yen. Traders are reacting strongly to shifting market dynamics and interest rate expectations.
The AUD/USD cross has faced new downside pressure, stumbling just ahead of the 0.6500 area. This dramatic reduction reflects deep worries about Australian economic prospects in the face of unprecedented global turbulence.
With all this going on, Japan is preparing to report some important economic data that could influence the path of its currency. Further on down the scorecard, we see Household Spending numbers. After, we’ll dig into sneaky Average Cash Earnings data and the preliminary Coincident/Leading Economic Indexes. Together, these releases will provide a valuable glimpse into consumer behavior and the economic health of Japan.
Australia is on the verge of releasing their Balance of Trade figures. In this announcement, we are looking to provide greater clarity around our nation’s economic competitiveness in the global marketplace. Traders and investors will be watching these developments closely as they have the potential to shift foreign currency valuations.