Fundamental & Technical Analysis by Coach Mark RoboAcademy during 14 – 18 October 2024

Hello everyone, welcome to the weekly analysis of currency pairs EUR/USD, GBP/USD, and XAU/USD for the third week of October, from 14 – 18 October 2024.

EUR/USD, “Euro vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting EUR/USD This Week:

European Economic Data:

• Eurozone Inflation Data (Final CPI) (October 14): The final Consumer Price Index (CPI) for September in the Eurozone is crucial in shedding light on inflation trends, which will influence the ECB’s stance on future interest rate hikes. If the CPI comes higher than expected, it could support the euro.
• German Economic Sentiment (ZEW Index) (October 15): This indicator reflects the sentiment of institutional investors and analysts regarding the economic outlook in Germany. If the sentiment index is lower than expected, it could signal economic concerns in the Eurozone’s largest economy, potentially weakening the euro.
• Eurozone Trade Balance (October 17): This data reflects the Eurozone’s trade performance. A strong trade balance will benefit the euro, while a weaker result could pressure the currency.
• Eurozone Current Account (October 18): This data provides insights into the Eurozone’s economic health in terms of international transactions. A strong current account surplus would help support the euro.

U.S. Economic Data:

• U.S. Retail Sales Data (October 16): This data is one of the most important indicators for the U.S. economy. Strong retail sales would indicate robust consumer demand, reinforcing expectations that the U.S. will maintain tight monetary policies, which would support the U.S. dollar.
• FOMC Meeting Minutes (October 16): The minutes from the Federal Reserve’s monetary policy meeting will provide insights into the Fed’s future interest rate plans. If the tone of the minutes suggests continued tightening, the U.S. dollar could strengthen, as the market anticipates further policy adjustments.
• U.S. Jobless Claims (October 18): The weekly report on jobless claims could affect the U.S. dollar. If the claims come in lower than expected, it would signal confidence in the U.S. economy and could positively impact the dollar.

Technical Analysis

Last week, the price was pushed down to close just above the key support level at 1.09000. At this point, it’s advisable to wait and see which direction the price will move next. It is recommended to wait for confirmation from the price action before making a decision. If there is a clear Buy signal, a long position could be held to profit from an upward move. However, for those looking to Sell, it would be safer to wait for the price to confirm a break below this support level first.

GBP/USD, “Great Britain Pound vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting GBP/USD This Week:

U.K. Economic Data:

• U.K. Unemployment Rate (October 15): The announcement of unemployment data and average earnings is crucial for assessing the health of the UK economy. If the unemployment data is strong, it may support the British pound; however, if the unemployment rate is higher than expected, it could lead to a depreciation of the pound.
• U.K. Retail Sales Index (October 17): This data reflects consumer spending in the UK, which is a significant part of the economy. If retail sales are higher than anticipated, it may bolster the British pound; conversely, if retail sales fall short of expectations, it could weaken the pound.

U.S. Economic Data:

• U.S. Retail Sales Data (October 16): Strong retail sales data will signal robust consumer demand in the U.S., reinforcing expectations that the U.S. will maintain a tight monetary policy. This is likely to strengthen the U.S. dollar and create downward pressure on GBP/USD.
• FOMC Meeting Minutes (October 16): The minutes from the Federal Reserve’s meeting will provide insights into future interest rate plans. If the Fed maintains a hawkish tone, the U.S. dollar may strengthen, putting additional pressure on the GBP/USD pair.
• U.S. Unemployment Claims (October 18): The weekly unemployment claims report may impact confidence in the U.S. dollar. If the number of claims is lower than expected, it could lead to a strengthening of the dollar.

European Economic Data Affecting GBP/USD:

• Eurozone Inflation Data (Final CPI) (October 14): Although this data pertains to the Eurozone, it impacts overall market sentiment in Europe. An increase in inflation within the Eurozone may raise concerns about an economic slowdown, potentially putting pressure on the pound and the European market.
• German Economic Sentiment Index (ZEW Index) (October 15): This data may indirectly affect the GBP/USD pair as it influences the overall economic direction of Europe. A decline in the index could place additional pressure on the pound.
• Eurozone Trade Balance (October 17): While this data is specific to the Eurozone, it will affect the movement of the pound as part of the European market. A weak trade balance in the Eurozone could lead to a decrease in GBP/USD.
• Eurozone Current Account (October 18): This data indicates the economic health of the Eurozone regarding international transactions. A strong surplus will support the euro, which may indirectly impact the pound.

Technical Analysis

The price movement is similar to the EUR/USD pair, as it has tested the support level and closed around this area. This could present an opportunity for a short-term Buy, hoping for a rebound. If you wish to open a Sell position, you should wait for the price to confirm a breakout below the support level first, ensuring that you can safely and confidently follow the Sell direction in the price movement.

XAU/USD, “Gold vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting XAU/USD This Week:

Economic Data Related to Gold:

• Eurozone Inflation Data (Final CPI) (October 14): The announcement of Eurozone inflation data will impact confidence in the financial markets. If inflation in the Eurozone is higher than expected, it may lead to an increased demand for safe-haven assets like gold, as investors look for assets that protect against inflation risks.
• German Economic Sentiment Index (ZEW Index) (October 15): This index reflects investor sentiment in Germany. If the results are poor and economic confidence declines, investors may turn to buying gold to avoid risks, which could drive up gold prices.
• U.S. Retail Sales Data (October 16): Strong retail sales data may indicate economic growth in the U.S., which could reduce demand for gold, as investors may shift their focus to riskier assets like stocks instead of gold, considered safe-haven assets.
• FOMC Meeting Minutes (October 16): The Federal Reserve’s meeting minutes will provide insights into interest rate adjustment plans. If the Fed signals further interest rate hikes, it may strengthen the dollar and put downward pressure on gold prices.
• Eurozone Trade Balance (October 17): A strong trade surplus in the Eurozone will help strengthen the euro and may put pressure on the U.S. dollar, potentially causing gold prices to rise as investors seek more safe-haven assets amid global economic uncertainty.
• Eurozone Current Account (October 18): A surplus in the current account will be a positive sign for the Eurozone economy, potentially strengthening the euro and weakening the U.S. dollar, which would support higher gold prices.
• U.S. Jobless Claims (October 18): U.S. jobless claims data may affect gold prices. If unemployment data is better than expected, the dollar may strengthen, leading to a decrease in gold prices. Conversely, if the data is worse, gold prices may rise as investors seek safe-haven assets.

Technical Analysis

The price has tested the support zone at 2600 and has rebounded sharply. It is expected that the price will aim to test the resistance at the 2670-2680 zone again. However, it is important to monitor the news that will be released this week, as it may cause significant price movements in either direction. Currently, it is recommended to maintain a bias towards buying in hopes that the price will rise to test the all-time high (ATH) once more, as there are no signs indicating that the price will decline at this time.

Disclaimer: This article is solely an analysis from the coach at RoboAcademy and is not intended as investment advice in any way. Investing is risky. Investors should study the information before making investment decisions.