Weekly market analysis for 28th October 2024

This week brings a number of significant economic data releases and central bank statements, which are likely to impact various currencies. On Monday the Bank of Canada Governor Tiff Macklem addressed the country’s economic outlook, focusing on immigration policy changes and consumer activity, particularly the recent rise in retail sales.

On Tuesday, attention will shift to the US with the release of CB Consumer Confidence and JOLTS Job Openings data. Analysts expect consumer confidence to rise slightly to 99.5 from the previous 98.7, suggesting some resilience in consumer sentiment amid economic challenges. JOLTS Job Openings are forecast to decrease slightly to 7.98 million from 8.04 million, potentially indicating a cooling in the labour market, which could weigh on the USD if the data underperforms.

Wednesday will focus on Australia and the US. Australia’s quarterly CPI is forecast to slow to 0.3% from 1.0%, with the yearly CPI expected to decrease to 2.3% from 2.7%. The Trimmed Mean CPI is anticipated to come in at 0.7%, slightly down from 0.8%. These high inflation readings could pressure the Reserve Bank of Australia to delay rate cuts, potentially impacting AUD. Germany’s Preliminary CPI m/m is forecast to edge up to 0.2% from the previous 0.0%. As the largest economy in Europe, Germany’s CPI figures could significantly influence the EUR.

In the US, ADP Non-Farm Employment Change is forecast at 110K, down from the previous 143K , indicating a possible slowdown in private sector job growth. Additionally, the Advance GDP q/q is projected to come in at 3.0%, the same as the previous quarter, maintaining steady growth expectations for the US economy.

Thursday’s data will begin with China’s Manufacturing PMI, forecast at 50.0, slightly above the previous 49.8, which could signal marginal expansion in the manufacturing sector. Japan will also be in focus with the Bank of Japan’s Policy Rate, Monetary Policy Statement, and the BOJ’s Press Conference. The rate is expected to remain unchanged <0.25%, with traders looking for any indications of future policy adjustments.

In Canada, GDP m/m is projected to rise by 0.1%, slightly lower than the previous 0.2%, which could provide insights into the pace of economic growth. In the US, Core PCE Price Index m/m is forecast at 0.3%, up from 0.1%. The Employment Cost Index q/q is expected to remain steady at 0.9%, while Unemployment Claims are forecast to rise to 229,000 from 227,000, potentially showing a slight softening in the labour market.

On Friday, Switzerland’s CPI m/m is expected to hold steady at 0.0%, following a previous decline of -0.3%. In the US, Non-Farm Employment Change is anticipated to drop to 108,000 from 254,000, with the Unemployment Rate remaining stable at 4.1%. Average Hourly Earnings are forecast at 0.3%, slightly lower than the previous 0.4%, potentially pointing to a deceleration in wage growth. Finally, the ISM Manufacturing PMI is projected to improve slightly to 47.6 from 47.2 but still remains in contraction territory, which could have implications for USD if the manufacturing sector shows unexpected strength or weakness.

Here are 3 markets to watch this week

Dow 30

The Dow remains in an uptrend on the weekly chart, despite losing 1,203 points (-2.78%) last week. The index’s recent low neared a key support zone on the daily chart between 41,074 and 41,800. This range is notable as the 50-period SMA aligns with the upper boundary, creating a potential area of interest for bulls. Additionally, the 50% Fibonacci retracement level falls within this range.

The other key support and resistance levels traders are likely to focus on are at 42,605, 42,688, 42,722 and 43,058. Note that the 23.6% Fibonacci level together with the SMA(20) are closely aligned with the 42,605 level adding significance to this resistance level.

If the market holds above the support of 41,074 and 41,800, a test of the recent all-time high at 43,345 could be on the horizon. Alternatively, if the Dow breaks decisively below this support area, a move down towards 40,915 may be likely.

EURUSD

EURUSD has traded down to a weekly support level at 1.0777 and reacted higher last week. Now the market could be in the process of creating a higher reactionary low at 1.0782. If this is successful, we might see the market closing above Friday's high at 1.0840. Provided there is sufficient buying interest above the level, EURUSD might move to 1.0940. However, the market is still in a downtrend in the daily chart so an alternative scenario is that the market fails to attract enough buying to move beyond the 1.0840 level. If this happened, a move below last week's low (1.0760) could be likely.

GOLD

Gold rallied to a resistance area (2733 - 2755) identified in last week's report. This area has now kept the market trading sideways as momentum slowed. The nearest major support level is the penetrated resistance at 2685 and should there be a corrective move down to this level it's worth following price action to see whether buyers engage the market again. The nearest daily timeframe support level is at 2708 and the nearest key resistance level is at 2758. If the sideways move is resolved to the upside and there's a decisive break above the sideways range the market might initially move to the 2778 - 2790 range and then if the trend stays strong further. Alternatively, if the trend starts to show signs of weakness and breaks below the latest swing low at 2602, a test of 2530 might take place.

This weeks high impact market events

The following economic events and data releases have the potential to cause considerable price movements, thereby offering you both opportunities and risks. Stay informed and leverage our economic calendar to access real-time data and analysis as these key events unfold.

Time (GMT +3)

Tuesday October 29th

Wednesday October 30th

Thursday October 31st

Friday November 1st

How will you trade the markets this week?

While research has been undertaken to compile the above content, it remains an informational and educational piece only. None of the content provided constitutes any form of investment advice.

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DISCLAIMER: TIO Markets offers an exclusively execution-only service. The views expressed are for information purposes only. None of the content provided constitutes any form of investment advice. The comments are made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances, or needs. The content has not been prepared in accordance with any legal requirements for financial analysis and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval.

Janne Muta

Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.

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