Market Insight 08-10-2024

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  • Market Insight 08-10-2024

EUR/USD

Summary:
EUR/USD moved higher toward 1.1000, supported by strong German Industrial Production data for August, which surged 2.9% MoM, beating expectations. However, broader uncertainty around Federal Reserve comments and a general cautious market sentiment limited further gains.

Outlook:
The pair’s direction will largely depend on upcoming Federal Reserve announcements and US Consumer Price Index (CPI) data. If inflation remains elevated in the US, the Euro may face downside pressure. Resistance at 1.1000 remains key, while support can be found around 1.0950. Further growth could be constrained by concerns over economic growth in the Eurozone.

GBP/USD

Summary:
Pound Sterling has been trading near 1.3060 against the US Dollar, with sentiment weighed down by geopolitical tensions in the Middle East and a strong US Dollar. Additionally, expectations of a rate cut by the Bank of England in November increased after recent remarks from Governor Andrew Bailey.

Outlook:
The geopolitical environment and upcoming UK GDP data will be the main drivers for the pair in the near term. A potential BoE rate cut may add further downside pressure on the Pound. Support is found at 1.3060, while any attempt to push above 1.3100 may be restricted by continued US Dollar strength and global risk aversion.

AUD/USD

Summary:
The Australian Dollar continued its decline due to a lack of fresh stimulus from China, coupled with risk-off sentiment stemming from the geopolitical situation. However, hawkish comments from the Reserve Bank of Australia, which emphasised the need for restrictive policy, helped limit the currency’s downside.

Outlook:
While the AUD remains vulnerable to Chinese economic news and global market sentiment, hawkish tones from the RBA may prevent deeper declines. Investors are awaiting the US CPI and FOMC minutes for further guidance. Immediate support sits near 0.6730, with resistance around 0.6800, as the pair trades cautiously in this environment.

Final Summary:

This week, major currency pairs are being driven by a mix of geopolitical risks and key economic data releases, particularly from the US. The Federal Reserve’s rate decisions and inflation outlook will heavily influence market sentiment, while investors also keep a close eye on the Bank of England and Reserve Bank of Australia. Caution dominates, and volatility may rise as we approach critical events later in the week.