Fundamental & Technical Analysis by Coach Mark RoboAcademy during 7 – 11 October 2024

Hello everyone, welcome to the weekly analysis of currency pairs EUR/USD, GBP/USD, and XAU/USD for the second week of October, from 7 – 11 October 2024.

EUR/USD, “Euro vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting EUR/USD This Week:

European Economic Data:

• Eurozone Inflation Expectations (October 8): The European Central Bank (ECB) closely monitors inflation expectations. If expectations remain high, the ECB may continue its tightening monetary policy, strengthening the euro. However, if inflation expectations decline, it could signal easing inflationary pressure, leading to a weaker euro.
• Eurozone Retail Sales for September (October 10): This data reflects the health of consumer spending in the Eurozone. If retail sales exceed expectations, it may support a stronger euro. Conversely, if sales come in lower than expected, the euro may weaken.

U.S. Economic Data:

• NFIB Business Optimism Index (October 8): This index measures the confidence of small business owners in the U.S. If business sentiment remains strong, it could be a positive factor for the U.S. dollar, potentially pushing the EUR/USD pair lower.
• Fed Officials’ Speeches (October 9): Federal Reserve officials Logan and Williams are scheduled to speak. If their remarks support further interest rate hikes, the dollar could strengthen. However, a more dovish tone may weaken the dollar, leading to a potential rise in the EUR/USD pair.
• U.S. Wholesale Inventories Data (October 9): If wholesale inventories increase more than expected, it could signal weak demand in the U.S., which may negatively impact the dollar.
• U.S. Jobless Claims Data (October 10): A higher-than-expected number of jobless claims could weigh on the dollar, while a lower number may support dollar strength.
• U.S. Consumer Sentiment Index (October 11): Strong consumer confidence could boost the U.S. dollar, pushing EUR/USD lower, whereas weak sentiment could support the euro’s strength.

Technical Analysis

The price has adjusted down to the support level at 1.09500 and has bounced back slightly. However, considering that the price has broken the previous structure, it may have the potential to decline further.

It is recommended to open short-sell positions, expecting the price to break below the support at 1.09500 and test the next support level at 1.08825. Additionally, if you’re looking for further Sell points, the price zone at 1.10150 is also an interesting level to consider.

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

Fundamental Analysis

Significant Economic Events Impacting GBP/USD This Week:

U.K. Economic Data:

• UK Inflation Expectations (October 8): The Bank of England (BoE) closely monitors inflation expectations to inform its policy decisions. If expectations remain high, the BoE may maintain a tight stance to control inflation, which would support a stronger pound. Conversely, if expectations decrease, it could lead to a weaker pound.
• UK Retail Sales Data (October 10): Retail sales are a key indicator of consumer spending. If the data comes in better than expected, it could positively impact the pound. However, if sales are lower than anticipated, it may put downward pressure on the pound.

U.S. Economic Data:

• NFIB Small Business Optimism Index (October 8): The confidence of small businesses in the U.S. reflects the overall health of the economy. If the data comes in strong, it could support the dollar and exert downward pressure on the GBP/USD pair.
• Fed Officials’ Speeches (October 9): Federal Reserve officials Logan and Williams will be delivering speeches. If they advocate for further interest rate hikes, it may strengthen the dollar and pressure GBP/USD downward. Conversely, if their tone is more dovish, the pound may strengthen.
• U.S. Wholesale Inventories Data (October 9): If inventories increase more than expected, it may indicate weakening demand in the U.S. economy, which would be negative for the dollar.
• U.S. Jobless Claims Data (October 10): This information will indicate the state of the labor market in the U.S. If the number of jobless claims rises more than expected, it could negatively impact the dollar.
• U.S. Consumer Sentiment Index (October 11): This index reflects consumer confidence in the U.S. economy. If the data exceeds expectations, it may bolster the dollar and put downward pressure on GBP/USD. However, if sentiment weakens, it could lead to a weaker dollar and support the pound.

Technical Analysis

The price is currently moving down to test the support level at 1.30400 but has seen a slight rebound. This situation is similar to EUR/USD, suggesting that traders should look for opportunities to open short (Sell) positions.

An interesting entry point for a Sell position is around the price level of 1.32300, with the expectation that the price will decline further to test the support at 1.30400.

XAU/USD, “Gold vs US Dollar”

Fundamental Analysis

Significant Economic Events Impacting XAU/USD This Week:

Economic Data Related to Gold:

• Inflation Expectations in the Eurozone (October 8): If inflation expectations remain high, it could boost demand for gold as a safe-haven asset, driven by investor concerns over inflation risks. Conversely, if expectations decline, it may pressure gold prices as investors shift towards riskier assets.
• NFIB Small Business Optimism Index (October 8): A strong reading from this index, reflecting robust small business confidence, would indicate continued growth in the U.S. economy, potentially strengthening the dollar and putting downward pressure on gold prices. However, if confidence weakens, gold might receive support as investors turn to safe-haven assets.
• Fed Officials’ Speeches (October 9): If Federal Reserve officials, such as Logan and Williams, signal further interest rate hikes, it could lead to a stronger dollar and pressuring gold prices. Conversely, a more relaxed stance on rate hikes might support gold, attracting investors seeking safety.
• U.S. Wholesale Inventories Data (October 9): An increase in inventories that indicates reduced demand in the U.S. could weaken the dollar, resulting in higher gold prices as investors seek safe-haven assets.
• Eurozone Retail Sales Data (October 10): Better-than-expected retail sales could diminish gold demand as investors opt for riskier assets. Conversely, disappointing sales data might bolster gold prices due to concerns regarding the Eurozone’s economic health.
• U.S. Jobless Claims Data (October 10): A rise in jobless claims above expectations could signal a slowdown in the U.S. economy, potentially driving gold prices higher as investors seek safe-haven investments. However, a decrease in claims could pressure gold prices downward.
• U.S. Consumer Sentiment Index (October 11): A strong consumer sentiment index could lead to a stronger dollar and put downward pressure on gold prices. Conversely, if sentiment declines, gold may rise due to concerns over U.S. economic growth.

Technical Analysis

Traders should exercise caution at this time, as gold prices may move in both upward and downward directions. The current trading range is between 2625 and 2690, allowing for a strategy of buying near the lower support and selling at the upper resistance within this range.

However, it is essential to be wary of volatility, as gold may experience a significant pullback down to the support level at 2600.

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.