This week's key economic events are dominated by the Federal Reserve's anticipated interest rate cut, which could signal the onset of a broader monetary easing cycle. This potential policy shift is expected to have significant implications for global financial markets. In addition to the Fed's decision, pivotal data releases and central bank actions from other major economies—including the U.S., UK, Canada, New Zealand, Australia, and Japan—will be closely watched. Markets will focus on inflation reports, GDP figures, and employment data to assess the trajectory of global economic growth and monetary policy. These developments are poised to influence market sentiment and provide critical insights into future economic conditions.
Overview
This week's key economic events are dominated by the Federal Reserve's anticipated interest rate cut, which could signal the onset of a broader monetary easing cycle. This potential policy shift is expected to have significant implications for global financial markets. In addition to the Fed's decision, pivotal data releases and central bank actions from other major economies—including the U.S., UK, Canada, New Zealand, Australia, and Japan—will be closely watched. Markets will focus on inflation reports, GDP figures, and employment data to assess the trajectory of global economic growth and monetary policy. These developments are poised to influence market sentiment and provide critical insights into future economic conditions.
Key Economic Events
Tuesday 15:30 (GMT+3) - Canada: CPI m/m (CAD)
Tuesday 15:30 (GMT+3) - USA: Retail Sales m/m (USD)
Wednesday 09:00 am (GMT+3) - UK: CPI y/y (GBP)
Wednesday 21:00 (GMT+3) - USA: Federal Funds Rate (USD)
Thursday 01:45 am (GMT+3) - New Zealand: GDP q/q (NZD)
Thursday 04:30 am (GMT+3) - Australia: Employment Change (AUD)
Thursday 14:00 (GMT+3) - UK: Official Bank Rate (GBP)
Thursday 15:30 (GMT+3) - USA: Unemployment Claims (USD)
Friday 02:30 am (GMT+3) - Japan: BOJ Policy Rate (JPY)
Friday 15:30 (GMT+3) - Canada: Retail Sales m/m (CAD)
Technical Analysis
The EUR/USD has been in an uptrend since late June when prices rebounded from the 1.06659 low. The upward momentum gained strength with the formation of a failure swing, a key reversal pattern in technical analysis. Specifically, the trough at 1.07774 held above the previous low while prices surpassed the 1.09480 peak, confirming the trend reversal. Consistent closes above the Upper Bollinger Band reinforced the continuation of the uptrend. Following a brief a-b-c corrective phase, the pair maintained support above the 50-period Exponential Moving Average. Both the Momentum oscillator and Relative Strength Index (RSI) further confirm the bullish bias, with readings above their critical thresholds of 100 and 50, respectively.
Potential Upside Targets
If the bulls maintain control of the market, traders may consider the following four potential upside targets:
1.11555: The first resistance is established at 1.11555, corresponding to the daily high from September 6.
1.12016: The second price target is identified at 1.12016, representing the highest exchange rate reached in 2024.
1.12758: The third price target level is established at 1.12758, representing a weekly peak.
1.14218: An additional price objective is recognized at 1.14218, aligning with the 423.6% Fibonacci Extension between the swing high of 1.10089 and the swing low of 1.08813.
Potential Downside Targets
If the bears take control of the market, traders may find potential opportunities in the following four downside targets:
1.10594: The initial level of support is seen at 1.10594, corresponding to the weekly Pivot Point (PP) calculated using the standard method.
1.10020: The second level of support is identified at 1.10020, which corresponds to the trough from September 11.
1.09391: The third level of support is established at 1.09391, representing the 61.8% Fibonacci Retracement between the swing low of 1.07774 and the swing high of 1.12016.
1.09172: An additional support is seen at 1.09172, reflecting the weekly support (S3) estimated using the standard Pivot Points method.
Fundamentals
The Federal Reserve is expected to cut its benchmark interest rate for the first time in over four years, likely signaling the beginning of a series of rate reductions into 2025. While the extent of the cut remains uncertain, with possibilities ranging from 0.25% to 0.5%, the move aims to support a soft landing for the economy as inflation cools. This decision comes amid a slowing job market, declining inflationary pressures, and persisting borrowing costs, which could boost consumer and business spending in the coming months.
Conclusion
In conclusion, this week's economic events and central bank decisions are poised to shape market sentiment and provide critical insights into global economic trends. The Federal Reserve's anticipated rate cut, along with key data releases from the UK, Canada, New Zealand, Australia, and Japan, will be closely watched by traders and analysts. In the EUR/USD market analysis, technical indicators suggest continued bullish momentum, but traders should remain mindful of potential downside risks. These developments will likely influence financial markets and set the tone for future economic policies.