WEEKLY MARKET OUTLOOK (4th – 8th Oct) IN SUMMARY
In this article we will discuss how the market performed and what caused the volatility and how it shapes the trend.
The US dollar began the week on a low note on Monday as it continued to tumble throughout the day. This move was a correctional pull back following the high gains on the dollar in the previous month on which it clocked an all time high of 94.492 for the first time in 2021. As a result the EUR/USD surged up to 1.1637 down from 1.1586 while the AUD/USD gained from 0.72540 up to 0.73000.
Later during the day on the wake of the US session the injured US dollar recovered impressively as fresh data that was released was in its favor. The dollar picked from a day low of 93.66 to 94 on Tuesday before consolidating once more as traders were awaiting the the balance of trade to be released.
The USD Balance of Trade came worst than expected ( -73.3B against the forecast of -70.5). This led the dollar to drop down to 93.81 on Wednesday. As a result the AUD/USD recovered nearing the previous high of 0.7300 while the GBP/USD hit 1.3645. However later during the day fresh data such as the ISM Non-Manufacturing PMI that came out was in favour of the dollar. This data coupled with sentiments from Fed Quarles Speech later on caused the US dollar to spike back past 94.
On Wednesday at around 15.15 MT the much awaited ADP Employment Change data came better than expected at 568K beating the forecast of 428K. This further added the gains to the dollar causing it to reclaim a previous high of 94.4. These series of gains by the dollar wiped the AUD/USD causing it to dip to a low of 0.7226 while the EUR/USD nose-dived to a day low of 1.1530.
Later on the dollar retraced back from the gains before picking up following positive data from the Initial Jobless Claims at 326K against the forecast of 348K.
However on Friday the monthly NFP Data was damaging for the US dollar as it posted a record six month low of 194K against the forecast of 500K. Consequently the dollar dropped sharply clocking a week low of 93.91. Even thought it bounced back, the bears are still in control going into the next week and further dips are expected.
Bitcoin surged past $50K and recorded a high of $55K for the first time in a month triggered by institutional adoption and purchase by some whales in the market.
Ethereum, the largest altcoin on the other hand rallied past $3,400 in the same week. Other altcoins also followed the same suit.
For more news, insights, forecasts on the forex and crypto market. Tune in in our next articles.