The Fed is ready to start tapering in November. Since the markets were expecting this and it wasn’t a surprise, the USD slumped allowing risk-on currencies and gold to rally up.
Market updates on October 4: NFP edition
Key events ahead:
- Non-farm employment change (non-farm payrolls) – 15:30 MT (12:30 GMT)
- Average hourly earnings – 15:30 MT (12:30 GMT)
- Unemployment change – 15:30 MT (12:30 GMT)
The market is awaiting US employment data at 15:30 MT time. What are the forecasts? The level of average hourly earnings is forecast to increase by 0.3%, while non-farm payrolls are expected to advance by 130 thousand. At the same time, analysts anticipate the unemployment rate to remain at 3.7%. If the actual levels of average hourly earnings and NFP are higher and the unemployment rate is lower than the forecasts, the USD will appreciate against other currencies.
What are the key levels for the pairs ahead of the release?
- EUR/USD has been consolidating near the 1.0979 level on H4. If the figures of today’s indicators are better than the expectations, the pair will slide downwards to the 1.0957 level. If bears are so excited by the release, they will break the support at 1.0957 and drag the pair below the 50-period SMA at 1.0947 and a lower border of the ascending channel. The next support will be placed at 1.0929-1.0936.
In case of a disappointing NFP release, bulls will be looking for a breakout of the 1.0979 level. Further upside momentum will be limited by the 1.0992 (100-period SMA) and 1.1 levels. If EUR/USD overcomes these levels, the pair will rise as far as the 1.1021 level will be reached.
- GBP/USD may move on the NFP release, too. At the moment, it is consolidating between the resistance at 1.2354 and the support at 1.2324 on the 4-hour chart. If the USD is supported, bears will break the 1.2324 level and pull the cable towards the 1.2306 level (200-period SMA). Further key levels for bears will lie at 1.2273-1.2283. In case of an alternative scenario, GBP/USD will try to break the 1.2354 level. The next resistance level will lie at 1.2373. In case of a breakout, the pair will rise upwards to the 1.2419 level.
- Will USD/JPY slide lower? It is the main question ahead of the NFP data. It is obvious, that disappointment in indicators will result in the selling action of the pair, which may pull it below the support at 106.72 to the next support level at 106.47 (look at H4). The next level will be placed below the descending trend line at 106.34. On the other hand, bulls will be waiting for a retest of the 106.95 level. The next resistance in their focus will be situated at 107.09 (200-period SMA)
US Retail Sales will be out on October 15 at 15:30 MetaTrader time (GMT+3).
The crypto market keeps recovering. Bitcoin has broken above $57,000. The way up to $60,000 is open now!
The United States will release the weekly Unemployment Claims on October 21, at 15:30 MT time (GMT+3).
Great Britain will publish the Inflation Rate on October 20, at 09:00 MT time (GMT+3).
The bullish movement in the stock market is gaining speed, and Bitcoin ETFs are closer than they might seem. What do we need to know for the next trading week?