In Forex trading, your success is highly affected by the choices made regarding which assets to trade and in which direction rather than the specific methods employed to determine trade entries and exits. Therefore, as we commence a new trading week, it becomes imperative to take a step back and assess the bigger picture, considering the broader market landscape shaped by macro fundamentals, technical factors, and market sentiment.
According to Daily Forex, here are some important data releases that you can consider highlighting in your weekly news update:
The Market is Leaning Towards Bullish Outlook
The latest news in the global financial markets is leaning towards a bullish outlook. Last week, the Federal Reserve’s expected decision to increase interest rates by 0.25% generate positive market sentiment. Additionally, the central bank’s more cautious tone in its statement, suggesting there may be no further rate hikes for now, led to lower short-term rates. As a result, the US stock market experienced a boost, while the US Dollar continued its downward trend, in line with long-term patterns.
Nevertheless, Friday’s release of stronger-than-expected US jobs data sparked speculation that the Federal Reserve may need to consider at least one more rate hike at its upcoming meeting next month. These recent developments highlight the dynamic nature of the forex market, emphasizing the importance of monitoring evolving trends and anticipating potential shifts in the weeks ahead.
So, as we move forward into the coming weeks, it becomes crucial for traders to stay vigilant and adapt to the ever-changing dynamics of the forex market. Monitoring the evolving trends, economic data releases, and central bank decisions will be key to making informed trading decisions.
The European Central Bank Policy Meeting
Other than the Fed, the European Central Bank (ECB) also held its policy meeting last week. The European Central Bank (ECB) policy meeting held last week was of significant importance to the forex market, where it raised its Main Refinancing Rate by 0.25% to 3.75%, as expected. ECB President Lagarde hinted at the possibility of further rate hikes in the future, which has caught the attention of traders.
US Non-Farm Employment Change
In the latest release of US Non-Farm Employment Change data, the report revealed a significant increase in job creation. The economy added a net total of 253,000 jobs, surpassing market expectations of 181,000 jobs. Moreover, the unemployment rate dropped to a multi-decade low of 3.4%, signaling a robust labor market. Furthermore, the report indicated an unexpected surge in average hourly earnings, which rose by 0.5% compared to the projected increase of 0.3%. This uptick in wage growth suggests improving economic conditions and increased purchasing power for workers.
The exceptionally strong jobs data challenges the notion of a potential pause in rate hikes by the Federal Reserve. With the labor market displaying impressive strength and wage growth outperforming predictions, the possibility of further rate hikes in the near term gains traction.
RBA Surprise Rate Hike Fuels Australian Dollar
The Reserve Bank of Australia (RBA) delivered an unexpected rate hike of 0.25%, providing a significant boost to the Australian Dollar. This surprise move challenges the notion of a potential pause in rate hikes by the Federal Reserve, raising doubts about the Fed’s stance on monetary policy.
Swiss CPI Falls Short of Expectations
Switzerland’s Consumer Price Index (CPI) was disappointing as it remained unchanged compared to the previous month, contrary to the expected increase of 0.2%. This lower-than-anticipated inflation reading suggests a subdued price growth environment in Switzerland.
The news presented on Prime Codex is solely those of the analysts quoted. They do not represent the opinions of Prime Codex on whether to buy, sell or hold specific pairs. Traders are advised to conduct their independent research before making an investment decision.