Forex Signals Brief for Oct 4: NFP in Focus
Rowan Crosby • 2 min read
Markets were thrown a bit of a curve ball yesterday and we might be in for more of the same later today.
In the past few years, there have been many occasions where bad news was good and good was bad. Today might be another of those moments.
Yesterday, the US rolled out the second soft ISM number of the week and markets rightfully sold off. Then, on a dime, they turned around and closed green.
To many, it was a case of the bad news forcing the hand of the FOMC to again cut rates. Despite the last official cut being labelled a ‘hawkish’ one, it appears they might have no choice but to keep the easy monetary policy flowing.
Bets of a third US rate cut this year at Fed’s October policy meeting spiked to 90% from 40% yesterday and there is a big event looming later today that could have even more impact.
Of course I am talking about the US employment report. We’ve already seen a weak ADP report throughout the week, so things are now looking a little worrying.
If the NFP report disappoints, or even if the prior month sees some revisions lower, then the odds of a cut in October could jump to a near on certainty.
As such, we need to watch the Greenback closely today as well as the SPX. But remember, bad news might just be good for markets today.
Forex Signal Update
The FX Leaders Team finished with 1 win from 4 signals with GOLD a busy trade of late.
EUR/USD – Pending Signal
The EUR/USD remains in a strong downtrend and price has pulled back right to that trend line. As mentioned, the USD will be active today, but there might be another push lower for the Euro.
Oil – Active Signal
WTI is in a short-term downtrend and it looks like price wants to try and test $50 once again, but a bounce looms. We are long, but expect some volatility here today.
BTC appears to not be able to climb above the $8,500 level for now and that means the bears remain in control.
We’ve been following the $8,500 level, for the past few sessions and I suggested a break above that point could mean some sharp upside.
But right on cue, the sellers stepped up. Now we will be looking at another test of $8,000 as we head into the weekend, which is a traditionally dangerous time for crypto’s. The short-bias remains in-tact for now, so looking to get short below that level might be a good play here.