Weekly Market Outlook: FOMC and employment figures in focus

October 10, 2021 09:32

After last week’s disastrous US employment report, all eyes will be on this week’s US FOMC meeting minutes release from the Fed on Wednesday, along with US inflation figures and then US retail sales number on Friday. Traders have been positioning themselves for a smooth ride in the Fed tapering process but recent data has created a rocky path forward.  

The Australian employment report will also be widely watched on Thursday. The AUD was one of the weakest currencies for many months over the Australia riots. Now that things have stabilised somewhat, the focus turns to the impact on its domestic economy.  

You can learn more about some of the global themes affecting the markets in this selection of new education articles.  

Weekly Forex Calendar 

Source: Forex Calendar from the MetaTrader 5 trading platform provided by Admirals.  

Did you know that three times a week, three professional traders talk through the markets live and show you how to identify potential trading opportunities? Reserve your complimentary spot in the Admirals Spotlight webinar now by clicking the banner below!  

Trader’s Radar – US FOMC, Inflation & Retail Sales

On Wednesday 13 October at 7 pm BST, the US Federal Reserve releases its latest FOMC meeting minutes report. This report details the insights into the financial and economic conditions that influence the bank's decision on monetary policy.  

No changes are expected as the Fed has already announced they want to start the tapering process but are waiting for a stronger labour market. Last week’s US employment figures came out much worse than expected with only 194,000 jobs added to the economy last month versus an expected 490,000.  

The language in the report can give more details on where the Fed’s red lines are so we could see some positioning based on last week’s data. It’s also why Wednesday's CPI (Consumer Price Inflation) report and Friday’s US retail sales number will also be a big deal.  

Source: Admirals MetaTrader 5, USDX, Monthly - Data range: from 1 Aug 2013 to 10 Oct 2021, performed on 10 Oct 2021 at 7:00 pm GMT. Please note: Past performance is not a reliable indicator of future results.  

The chart above shows the monthly price activity of the US Dollar Index. It’s clear to see the bounce higher from the recent horizontal support level around 89.13. This also happens to be the lower support zone of a long-term consolidation pattern.  

Interestingly, the price has also broken through intermediate resistance as depicted by the small descending black line. Now that the bulls are above this resistance level there is space for the price to try and roam higher – possibly back to the top of the long-term consolidation pattern. 

If you’re feeling inspired and ready to trade live in the market, you can open a live trading account by clicking on the banner below and accessing an impressive range of trading features to support you in your journey. 

Corporate Trading Updates and Stock Indices 

Global stock market indices have continued to trade lower in recent weeks, although the moves have now been more muted. The energy crisis, inflation fears and rising tensions between the US and China and now the EU and UK have lowered the sentiment around risk.  

Now that the momentum to the downside has slowed down, it is an opportunity for buyers to try and build. Analysing whether this is the case or not will be key to what the next big move could be, especially as we enter a traditionally seasonally bullish month from November.  

Source: Admirals MetaTrader 5, SP500, Daily - Data range: from 8 Jan 2021 to 10 Oct 2021, performed on 10 Oct 2021 at 6:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.  Past five-year performance of the S&P 5002020 = +16.17%2019 = +29.09%2018 = -5.96%2017 = +19.08%2016 = +8.80 

Currently, the price action of the S&P 500 stock market index shown above is battling between the 100-day exponential moving average (EMA), depicted by the green line, and the 50-day EMA, depicted by the red line.  

These levels have provided technical support and resistance zones in the past and continue to do so now. Traders will be looking for the next clues on whether the price will continue to break lower or stage a rally.  

Either way, it is setting up to be a very interesting week! 

Did you know that you can use the Trading Central Technical Ideas Lookup indicator to find actionable trading ideas on this index and thousands of other instruments across Forex, stocks, indices, commodities and more? 

You can get this indicator completely FREE in the Premium Analytics section once you open an account... 

INFORMATION ABOUT ANALYTICAL MATERIALS: 

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following: 

  • This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.  
  • Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.  
  • With a view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for the prevention and management of conflicts of interest.  
  • The Analysis is prepared by an independent analyst, Jitan Solanki (analyst), (hereinafter “Author”) based on their personal estimations.  
  • Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.  
  • Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.  
  • Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved. 
Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.