Economic Events to Watch Out For
Mark your calendars for a busy week of high‑impact events that are likely to be trade‑shaking. Below are the dates and key takeaways, with links to detailed releases.
- October 27 — Aud – RBA Gov Bullock Speaks: The prime minister’s comments will shape expectations on the Reserve Bank’s policy stance and the AUD/USD pair.
- October 29 — Usd – Federal Funds Rate: The rate set by the Federal Open Market Committee (FOMC) will dictate the strength of the greenback and influence crosscurrency flows.
- October 29 — Usd – FOMC Statement & FOMC Press Conference: These releases will reveal the Fed’s future plans, providing a backdrop for USD volatility.
- October 29 — Cad – BOC Monetary Policy Report & Rate Statement & Press Conference: The Bank of Canada’s policy decisions will affect the CAD/USD relationship.
- October 30 — Jpy – BOJ Policy Rate, Monetary Policy Statement, Outlook Report & Press Conference: The BoJ’s stance on its hair‑cutting path will move the JPY/variations.
- October 29 — Aud – CPI (Q 1) & CPI (Y/Y): The Australian inflation numbers will affect the AUD/USD pulse.
Market Trends and Analysis
The macro backdrop is one of tightening on the dollar side and some dovish possibilities on the other. The Fed’s scheduled “rate hike” on a 4.00% level (down from 4.25%) signals a steady, but not aggressive, stance as the U.S. economy displays solid growth. Should the decision come with dovish language or “full flexibility” indications, the USD may soften, especially against carry‑trade currencies.
Across the Pacific, the RBA is more reserved. With the AUD under pressure from a swinging US dollar and an ongoing inventory buildup in Chinese manufacturing yards, Gov Bullock is likely to caution that despite interest rates remaining unchanged, a “balanced” approach is needed. The AUD could trade in a tight range against major pairs, but any hint of a tightening shift could trigger a rally.
The BoJ’s policy room is even narrower. For weeks now, the policy rate is quasi‑negative and the Bank’s confidence in a mini‑positive shift is low. The scheduled rates on Oct 30 are therefore expected to stay flat at < 0.5%, which will keep the JPY in a relatively weak, but stable, position as investors rather than chase yield.
Meanwhile, the Bank of Canada’s news is a “what‑if” scenario. With the economy in a growth phase and unemployment hovering around 4%, the BOC is likely to keep the overnight rate steady but may earmark a future framework for incremental tightening. The CAD/USD is thus set to move oppositely to the Fed, opening a carry‑trade potential.
Trading Opportunities
1. AUD/USD Short Pullback:
Set‑up: Use the 1‑week EMA crossover with a support level at 0.7370.
Risk‑to‑Reward: 1:2 with stop at 0.7430.
2. CAD/USD Long Carry:
Set‑up: Await BOC’s announcement; if the overnight rate holds at 2.25%, consider a long on CAD/USD until the Fed’s next meeting.
Risk‑to‑Reward: 1:1.5 with stop at 1.3460.
3. USD/JPY Capturing Rate Oscillation:
Given the BoJ’s flat stance, a range‑bound trade could be set with a buy at 112.00 (lower band) and a cash‑out at 115.00 (upper band).
Use a 5‑level RSI oversold condition to trigger entry.
4. GBP/JPY Hedge for Volatility: The parallel volatility in the GBP and JPY markets can be exploited via a hedge on the pair to soak up volatility spikes from the Eurozone data releases. Set a tight stop at the 0.03 pip level.
5. USD/CHF Short after Outlook Report: A short on USD/CHF around 0.9740 (short‐term support) could capture a potential reversal if the Fed signals a shift towards a “no‑change” stance and the BCB remains neutral.
Conclusion
This week is a classic case of “stay on the sidelines” for many traders. Cash out positions that are heavily exposed to the USD, especially if they are fixed‑rate. Remaining nimble for discretionary pairs such as AUD/USD and CAD/USD is essential, as the technical environment supports a breakout or reversal post central‑bank releases. Always monitor liquidity, as central bank policy meetings can spark sudden, short‑term volatility spikes.
Risk Disclaimer
Trading Forex involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Always do your own research and consult a qualified financial advisor before making any trading decisions. The information presented may not be comprehensive and the trader assumes full risk and liability for all trading decisions.
