Weaker US data sends the greenback and stock markets lower
US data worsens
The United States economy posted a raft of worse than expected data points this week, with both September manufacturing and jobs data missing initial estimates. The September ISM manufacturing report fell to a decade-low, 47.8, as the Sino-US trade war proved to be a drag on the US manufacturing sector. The ADP private-sector jobs report also missed expectations, with a 135,000 headline number and a downward revision for the August headline number. The market reaction saw the US dollar index falling and US equity markets tumbling as traders predicted the FED may cut rates again this month.
- The EURUSD pair is only bearish while trading below the 1.0980 level, key support is found at the 1.0960 and 1.0880 levels.
- If the EURUSD pair trades above the 1.0980 level, buyers may test towards the 1.1025 and 1.1110 resistance levels.
The British pound suffered wild fluctuations on the foreign exchange market this week, as Brexit headlines provided two-way trading opportunities for financial market participants. Sterling fell toward the 1.2200 level then moved back to the 1.2400 level as British PM Boris Johnson sought to deliver a last-minute deal to the Europen Union. The UK economy also posted mixed economic data this week, with UK GDP outpacing estimates, while construction and service PMI data came in much worse than initially forecasted.
- The GBPUSD pair is only bearish while trading below the 1.2275 level, key support is found at the 1.2250 and 1.2200 levels.
- If the GBPUSD pair trades above the 1.2275 level, buyers may test towards the 1.2350 and 1.23410 resistance levels.
The cryptocurrency market failed to stage a much-needed rally during the first trading week of October, as many of the top coins languished towards multi-month trading lows. Bitcoin found technical support from the $7,700 level, as it struggled to advance above its key 200-day moving average. Ethereum also struggled to gain momentum above the $180.00 level and remain technically bearish. Litecoin appeared to lack buying interest and consolidated around the $55.00 level, as traders continued to increase bearish bets towards the fifth-largest cryptocurrency by market capitalization.
- The BTCUSD pair is only bullish while trading above the $9,000 level, key resistance is found at the $9,600 and $10,00 levels.
- The BTCUSD pair is only bearish while trading below the $9,000 level, key support is located at the $7,700 and $7,100 levels.
RBA rate cut
The Reserve Bank of Australia cut interest rates for the third time in five months this week, bringing the nations interest rate down a record-low of 0.75 percent. The Australian dollar fell to its lowest trading level against the US dollar since March 2009, as traders sold the AUDUSD pair following the dovish rate cut. RBA Governor Phillip Lowe suggested that the interest rate cut be moved even lower if growth prospects fail to materialize over the coming months. The RBA also noted that the domestic economy could be at a turning point, although downside risks still remain.
- AUDUSD pair is only bullish while trading above the 0.6500 level, key resistance is found at the 0.6580 and 0.6630 levels.
- If the AUDUSD pair trades below the 0.6500 level, key support is located at the 0.6350 and 0.6300 levels.