This week is packed with significant economic events that could influence market movements. Key reports include Australia's GDP, Canada's Overnight Rate, and several critical US indicators like JOLTS Job Openings, Unemployment Claims, and Nonfarm Payrolls. Traders will be closely monitoring these developments for insights into economic trends and potential shifts in major currency pairs. Additionally, technical analysis of the EURGBP shows a bearish reversal, highlighting key support and resistance levels that could determine future price action. Meanwhile, Eurozone inflation trends point to possible interest rate cuts by the European Central Bank.
Overview
This week is packed with significant economic events that could influence market movements. Key reports include Australia's GDP, Canada's Overnight Rate, and several critical US indicators like JOLTS Job Openings, Unemployment Claims, and Nonfarm Payrolls. Traders will be closely monitoring these developments for insights into economic trends and potential shifts in major currency pairs. Additionally, technical analysis of the EURGBP shows a bearish reversal, highlighting key support and resistance levels that could determine future price action. Meanwhile, Eurozone inflation trends point to possible interest rate cuts by the European Central Bank.
Key Economic Events
Wednesday 04:30 am (GMT+3) - Australia: GDP q/q (AUD)
Wednesday 16:45 (GMT+3) - Canada: Overnight Rate (CAD)
Wednesday 17:00 (GMT+3) - USA: JOLTS Job Openings (USD)
Thursday 15:15 (GMT+3) - USA: ADP Nonfarm Employment Change (USD)
Thursday 15:30 (GMT+3) - USA: Unemployment Claims (USD)
Thursday 17:00 (GMT+3) - USA: ISM Services PMI (USD)
Thursday 17:00 (GMT+3) - USA: EIA Crude Oil Stocks Change (USD)
Friday 15:30 (GMT+3) - Canada: Employment Change (CAD)
Friday 15:30 (GMT+3) - USA: Nonfarm Payrolls (USD)
Friday 17:00 (GMT+3): Canada: Ivey PMI (CAD)
Technical Analysis
After reaching a high price of 0.86247 on August 8, the EURGBP price formed a bearish reversal known as a failure swing in technical analysis. Specifically, the peak at 0.86926 failed to exceed the previous peak, and instead, prices dropped below the trough at 0.85309. By using the Fibonacci Retracement tool from the swing low to the swing high, we can estimate three potential downside targets: 0.84928, 0.843111, and 0.83342. The 50-period Exponential Moving Average (EMA), the Momentum oscillator, and the Relative Strength Index (RSI) all support the downward trend of the currency pair. Specifically, prices are below the 50-period EMA, the Momentum is below the 100 baseline, and the RSI values are below 50.
Potential Upside Targets
If the bulls take control of the market, traders may consider the following four potential upside targets:
0.84299: The first price target is seen at 0.84299, which corresponds to the weekly Pivot Point (PP) calculated using the standard Pivot Points method.
0.84752: The second price target is identified at 0.84752, representing the 61.8% Fibonacci Retracement drawn from the low point of 0.83828 to the high point of 0.86247.
0.85029: The third resistance level is established at 0.85029, representing the 50% retracement between 0.83828 and 0.86247.
0.85309: An additional resistance is recognized at 0.85309, aligning with the swing low marked on August 13.
Potential Downside Targets
If the bears manage to take control of the market, traders may find potential opportunities in the following four downside targets:
0.83828: The initial level of support is established at 0.83828, corresponding to the low point formed on July 17.
0.83544: The second level of support is 0.83544, which corresponds to the weekly support (R2) calculated using the standard method.
0.83342: The third level support is 0.83342, representing the 423.6% Fibonacci Extension between the swing low 0.85309 and the swing high 0.85926.
0.83090: An additional support is located at 0.83090, reflecting the weekly support (R3) calculated using the standard method.
Fundamentals
Eurozone inflation dropped to a three-year low of 2.2% in August 2024, down from 2.6% in July. According to Bloomberg, this decline increases expectations for a September rate cut by the European Central Bank (ECB). Core inflation, which excludes volatile items like energy and food, also fell slightly to 2.8%. Despite the positive headline figure, concerns remain about persistent services inflation, which stayed high at 4.2%. Markets have fully priced in a 25 basis point rate cut by the ECB in September, with another cut expected by year-end.
Conclusion
In conclusion, this week presents a series of critical economic events that are likely to impact global markets. Key indicators such as Australia's GDP and US Nonfarm Payrolls will offer insights into economic performance, while technical analysis of EURGBP suggests potential bearish movements. Additionally, Eurozone inflation trends hint at upcoming rate cuts by the ECB, adding another layer of complexity to market dynamics. Traders should stay alert to these developments to navigate potential shifts in market sentiment.