Weekly Market Analysis 14th October 2024

This week, traders should brace themselves for several high-impact economic data releases that are likely to create notable market movements. With no major events scheduled for Monday, market participants can take time to prepare for the data-packed week ahead.

On Tuesday, the UK's Claimant Count Change is due for release, with expectations pointing towards a decrease to 20.2K from the previous 23.7K. If this figure comes in better than expected, it could support GBP, though a higher claimant count could lead to renewed concerns over the labour market and pressure the currency.

Later in the day, Canada will take the spotlight with its CPI data. The monthly figure is forecast to remain unchanged at -0.2%, and the year-over-year Median CPI is expected to stay steady at 2.3%. Meanwhile, the Trimmed CPI y/y is anticipated at 2.4%, also unchanged from the previous reading. These inflation metrics will be key in shaping expectations about future Bank of Canada rate decisions, with inflationary pressures potentially leading to further policy tightening.

On Wednesday, attention will turn to New Zealand, where the CPI q/q is forecasted to show a significant rise to 0.7% from 0.4%, signalling increasing price pressures in the economy. For the UK, the focus will be on the CPI y/y reading, which is expected to cool slightly to 1.9%, down from the previous 2.2%. Lower-than-expected inflation could ease rate hike concerns, possibly softening the GBP.

Moving into Thursday, the Australian employment data will take centre stage. The Employment Change is forecast to slow to 25.2K from the previous 47.5K, while the Unemployment Rate is expected to hold steady at 4.2%. A stronger labour market reading could support the AUD, while a weaker figure could signal softening economic conditions.

In Europe, the ECB is scheduled to release its Main Refinancing Rate, expected at 3.40%, down from the previous 3.65%, along with its Monetary Policy Statement. Later, the ECB will hold a press conference where market participants will be closely watching for any forward guidance on interest rates, particularly in the face of cooling inflation in the eurozone.

In the US, traders will be monitoring the Core Retail Sales m/m and Retail Sales m/m data, both forecast at 0.1% and 0.3%, respectively, reflecting steady consumer spending. The Unemployment Claims are also expected to drop slightly to 241K from the previous 258K, with a decrease potentially indicating a strong labour market, supportive of the dollar.

Finally, on Friday, the UK's Retail Sales m/m is projected to decline to -0.3% from 1.0%, signalling potential softness in consumer demand, which could weigh on the GBP.

Here are 3 markets to watch this week

GBPUSD

GBPUSD has once again moved down to a key market structure area, while it is also trading relatively close to a bullish trend channel low. The market structure area is created by a swing high at 1.3044 and a swing low at 1.3002. Note also that the 50% Fibonacci retracement level is closely aligned with these two swing points, adding to the significance of this market structure area. Even though the market trades below the 50-period moving average, both the 20- and 50-period SMAs point higher, indicating that the market is still in an uptrend. Therefore, if the market attracts buyers above the 1.3002 level and can sustain a rally, we could see it trading to the 23.6% Fibonacci retracement level at 1.3238 and then possibly to 1.3360. Alternatively, if dollar strength continues and GBPUSD breaks the 1.3002 level, the market could trade down to 1.2880.

SILVER

The silver market has been attracting buyers lately and has now created a higher swing low at 30.736. This indicates that the market might be able to push above the nearest swing high at 31.631. If this happens, and if there is follow-through buying above this swing point, the market might be able to rally to 32.400 and then possibly to 32.600, a measured move target given by the recent price swing. However, for this to take place, the market needs to continue showing strength. Alternatively, if the market cannot push beyond the 31.631 key resistance level, we could see a retest of the market structure level at 30.789.

DAX

The DAX continues to trend higher after bouncing from the 23.6% retracement level (18,908), which coincided with the bull channel low. Now, the market is approaching all-time high levels at 19,492.55. This is the nearest key resistance level and will show how committed the bulls are in the German stock market. If buyers are able to push the market above this key market structure level and attract further buying, we could see the DAX trading to 19,760, a level relatively close to the bull channel high. Alternatively, if the market cannot break through the resistance at the latest all-time high and starts to trade lower, we could see ranging action between the 23.6% Fibonacci retracement level (18,908) and the all-time high level (19,492.55).

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 October 15th

Wednesday October 16th

Thursday October 17th

Friday October 18th

How will you trade the markets this week?

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Janne Muta

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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