Weekly Analysis 2nd September 2024
BY Janne Muta
|September 2, 2024This week promises to be eventful for traders, with several critical economic data releases and events expected to create market volatility. As the US markets are closed today due to a holiday, trading volumes are expected to be lighter than usual, offering a brief pause before the busy days ahead.
On Tuesday, Switzerland will release the Consumer Price Index (CPI) month-over-month data. Analysts forecast a slight increase of 0.1%, rebounding from the previous -0.2%. On the same day, Switzerland’s GDP quarter-over-quarter data is expected to remain steady at 0.5%. Any surprise deviations could impact CHF movements.
Later in the day, the US will release its ISM Manufacturing PMI and Prices data. The Manufacturing PMI is anticipated to increase slightly to 47.5, up from 46.8, while the Prices component is expected to remain stable at 52.9. Given the ongoing concerns about the US manufacturing sector, these figures will be closely watched for signs of economic resilience or further contraction.
Wednesday brings significant activity, starting with Australia’s GDP quarter-over-quarter data, forecasted at 0.2%, a modest improvement from the previous 0.1%. In the UK, the Monetary Policy Report Hearings could offer insights into future policy direction amid a challenging economic environment.
In Canada, the Bank of Canada (BOC) is expected to maintain its Overnight Rate at 4.25%. Any hints of future rate adjustments during the subsequent BOC Press Conference could influence CAD movements. Additionally, the US JOLTS Job Openings report, expected to show 8.0 million openings, could provide further insight into the health of the US labour market.
Thursday’s focus will be on Australia again, where RBA Governor Bullock’s speech may provide clues about future monetary policy. The UK will release its Construction PMI, forecasted at 54.6, slightly down from 55.3. In the US, the ADP Non-Farm Employment Change is expected to show a significant increase to 136K from the previous 122K, indicating potential strength in the labour market.
US Unemployment Claims and Final Services PMI data are also scheduled, with expectations of minor adjustments from previous figures. The ISM Services PMI is forecasted to drop slightly to 50.9 from 51.4, reflecting potential softening in the services sector.
Friday concludes the week with key data from Canada and with the highlight of the week the US Non-Farm employment report. Canada’s Employment Change is expected to rebound to 25.6K after a previous decline of -2.8K, while the Unemployment Rate may rise slightly to 6.5% from 6.4%. In the US, Non-Farm Employment Change is expected to show an increase to 164K from 114K, with the Unemployment Rate expected to decline to 4.2% from 4.3%.
The week ends with speeches from FOMC members, including Williams and Waller, which could provide additional insights into the Fed’s future policy direction, particularly in light of the ongoing economic uncertainties.
Here are 3 markets to watch this week:
USOIL
US oil has attracted significant buying interest at the weekly support level of 71.44 on two occasions, but this support has not been sufficient to drive the market higher. Instead, the market has been forming lower reactionary highs, indicating persistent institutional selling pressure. The recent rallies have struggled to break above the neckline at 78.72, and the creation of a lower high at 77.15 further suggests that buyers have yet to regain control. If the market can’t break above these lower highs, the likelihood of a decline below the 71.44 support level increases.
However, there is a potential bullish scenario: the market appears to be attempting to form a double bottom. For the technical outlook to turn more positive, the market needs to establish a higher low above the 71.44 support level. If this is followed by a decisive break above 78.72, we could see momentum build, pushing the market towards targets of 83.27 and possibly 85.60 or higher.
Gold
The gold rally lost momentum two weeks ago, leading the market to move sideways since then. Earlier this year, when gold rallied to new all-time highs, it was followed by a sizeable correction. However, this time, the market has found a weekly support level at 2,476.35, which has so far prevented it from trading lower. Last week's low remained above this level, indicating a sense of optimism in the market.
If this optimistic sentiment continues, we could see the market testing the 2,529 region and potentially moving beyond that level. On the other hand, the recent USD strength is a risk factor. If Gold continues to drift lower and decisively breaks the 2,476.35 support, a move towards 2,452 could become likely.
USDJPY
USDJPY has stabilised recently after a significant decline in July. In August, the market began to attract buyers above 141.69, establishing a higher swing low at 143.44. This suggests there is potential for the market to rise towards the 38.2% Fibonacci retracement level at 149.38, which coincides with the latest reactionary high. If bullish momentum continues above the 149.38 level, USD bulls might aim for the 153.50 level next. However, if the market forms a lower reactionary high below the 149.38 level, a decline towards the August low of 141.69 could become a possibility.
This weeks high impact market events
The following economic events and data releases have the potential to cause considerable price movements, thereby offering you both opportunities and risks.
Stay informed and leverage our economic calendar to access real-time data and analysis as these key events unfold.
Time (GMT +3)
Tuesday 3rd September
| Time | Currency | Event |
| 9:30 AM | CHF | CPI m/m |
| 5:00 PM | USD | ISM Manufacturing PMI |
Wednesday 4th September
| Time | Currency | Event |
| 4:30 AM | AUD | GDP q/q |
| 4:45 PM | CAD | BOC Rate Statement |
| CAD | Overnight Rate | |
| 5:00 PM | USD | JOLTS Job Openings |
| 5:30 PM | CAD | BOC Press Conference |
Thursday 5th September
| Time | Currency | Event |
| 5:00 AM | AUD | RBA Gov Bullock Speaks |
| 3:15 PM | USD | ADP Non-Farm Employment Change |
| 3:30 PM | USD | Unemployment Claims |
| 5:00 PM | USD | ISM Services PMI |
Friday 6th September
| Time | Currency | Event |
| 3:30 PM | CAD | Employment Change |
| CAD | Unemployment Rate | |
| USD | Average Hourly Earnings m/m | |
| USD | Non-Farm Employment Change | |
| USD | Unemployment Rate |
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Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.
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