The first week of the month is always packed with tier-one data. As it is a full first week, it is front-loaded with PMIs and then culminates in the crucial US Nonfarm Payrolls report. 

Elsewhere, the interest rate decisions from the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ) will be significant as central banks respond to the current turmoil in financial markets. In Lat Am, it is all about inflation.

Watch for: 

  • North America – Nonfarm Payrolls and the ISM surveys, along with Canadian unemployment
  • Europe – Final PMIS and Eurozone Retail Sales
  • Asia – interest rates from the RBA and RBNZ
  • LatAm – CPI inflation for Colombia, Mexico and Chile

North America

N.B. Forecasts are the latest available consensus 

US dollar (USD)

With massively elevated volatility on bond and major forex markets, calling direction is a tough gig right now. On fundamentals, the strength of the US dollar should endure. Near-term fluctuations and a potential unwind from an overbought position is a near-term risk. However, we would continue to look to use any near-term USD weakness as a chance to buy.

This week’s survey from the ISM and the Nonfarm Payrolls will be the key risk events. There are no significant signs that the tightness in the US labor market is beginning to loosen. Jobs growth is expected to be above 200,000, whilst wage growth remains high at over 5% and unemployment low at 3.7%. The Fed will therefore continue to tighten rates aggressively.

Canadian dollar (CAD)

Negative risk appetite has weighed significantly on the commodity currencies. The CAD has been volatile as significant swings in risk appetite have taken hold of major markets in the past week. If sentiment can settle and hold an improvement, then there might be scope for a near-term rebound in CAD positions. A continued rebound in oil would also help.

  • USD/CAD – The pair has fluctuated with elevated volatility in the past week. With momentum stretched there is scope for a near-term pullback. Reaction to the near-term support at 1.3600 will be key this week. A decisive break lower would imply c. 1.3350. Resistance at 1.3830 is key now.


The near-term technical rally in precious metals and oil leaves commodities at an important pivot point this week. If there is a decline in US Treasury yields this will help to fuel the near-term rally in precious metals such as gold and silver. However, if fears over recession and monetayr policy tightening resurface, higher yields will mean faltering rallies on metals. There has been analyst chatter suggesting that OPEC+ could be set for a significant cut in production to offset the price decline. If this starts to be seen from OPEC+ ministers then it could induce a more considerable rebound in oil. 

  • Brent Crude Oil – a decisive break clear above $90 would open the way to a continued near-term technical rally into the key medium-term resistance band between $93.25/$96.60. It would also bring a test of the near four-month downtrend. We still favour selling into strength so are looking out for any bull failures.
  • Gold – The overhead supply between $1680/$1697 is the next key test and the market has recovered near-term. We favour selling into strength but if the market can get back above $1697 it would extend the rebound.
  • Silver – As the recovery from the sharp move lower continues, the prospect of a test of the five-month downtrend is growing this week. We still see near-term rallies into resistance as a chance to sell but would wait to see this move playing out first. Resistance at $20.00 remains the key barrier.

Wall Street

In the absence of corporate announcements, Wall Street remains at the mercy of broad market sentiment and subsequently, bond markets. If bond yields continue to rise then it will signify continued fear of central bank tightening and the recessionary implications. This is a drag on equity markets. Wall Street is bordering on oversold and a technical rally could be seen. However, we continue to see rallies as a chance to sell. 

  • S&P 500 futures – rallies are still struggling for traction. However, the longer the support band 3613/3639 holds firm, the better the potential for a near-term rebound. A decisive move above 3750 would open the way back towards resistance starting around 3885.
  • NASDAQ 100 futures – support of the June low at 11070 is hanging on but the buyers are struggling to sustain recovery traction. However, if a move above 11610 can be formed then it opens for a bigger recovery. Below 11070 opens 10655.
  • Dow futures – have already broken the support of the June low at 29635 however, the choppy consolidation above 28880 lends the potential to a near-term oversold technical rally. Reaction to resistance at 239880 will be important this week.


N.B. Forecasts are the latest available consensus 

Euro (EUR)

With the PMIs being final revisions, aside from the expected deterioration in Eurozone retail sales, EUR traders will be keeping a close eye on any ECB Governing Council members giving speeches. Reaction to the sharp rise in inflation and bond yields along with any chatter about core/periphery yield spreads will be market moving. 

  • EUR/USD – a technical rally towards a test of the overhead supply 0.9865/0.9950 has been seen. Reaction to this resistance will be a key gauge this week. Given the negative medium to longer-term outlook, we favour using rallies as a chance to sell.

British pound (GBP)

GBP has started to strengthen on news that the UK’s Office for Budget Responsibility will publish its first fiscal forecast on 7th October, and in full by end of October. This may go some way to clearing up the shambolic mess of the Government’s “mini-budget”. It is also coming several weeks earlier than the 23rd November date previously stated. This gives an early opportunity to clarify how the Government can make its fiscal plans work. This is crucial for market confidence in GBP in the coming weeks. GBP volatility is likely to remain elevated this week. 

  • GBP/USD – The near-term volatile unwind could be set to test the resistance between 1.1350/1.1450 this week. However, if the move begins to falter then the negative medium to longer-term technical outlook could begin to weigh once more. We still favour using near-term strength as a chance to sell. 


European indices have been smashed as risk appetite has plummeted in recent weeks. If turmoil in bond markets begins to ease off, then there could be scope for an equity market rebound. However, we continue to favour selling into strength.

  • DAX – The market has scope for a near-term technical rally, but there is key resistance that comes in between 12300/12400 that will be restrictive to a recovery. The concern is that with the market having broken long-term support around 12375 this has opened the way towards 11320. 
  • FTSE 100 – Having broken below 6969/7010 this now becomes an area of overhead supply. Any technical rally would need to get through this and above 7080 resistance to engage in a serious rebound. A bull failure would simply put the market back on track for a test of the June low at 6755.


N.B. Forecasts are the latest available consensus 

Japanese yen (JPY)

The JPY has underperformed for several months due to the steadfast dovish position of the Bank of Japan. However, with the high volatility of current bond markets, traders position not on interest rate differentials, but more on a safe haven bias. This has driven a JPY recovery. If this continues this week, the JPY will continue to perform well. If risk appetite improves and volatility settles down, we expect JPY to underperform once more.

  • USD/JPY – the market has been volatile since the Japanese currency intervention but the resistance between 144.90/145.90 is firming. If this resistance continues throughout this week, the potential for a near-term pull lower towards the 141.60 initial support would grow. 
  • AUD/JPY – The pair has been more in a choppy trading range in the past week. A more positive risk appetite will favour an upside move, but there is resistance between 94.00/94.20 to overcome. A close above would help a recovery towards 95.30/95.70.

Australian dollar (AUD)

In a risk-averse trading environment, the AUD is under significant strain. The focus this week turns to the latest RBA meeting, with another +50bps hike expected. The RBA has started to sound less hawkish recently and it will be interesting to see if this trend continues. Especially given the recent market turmoil.

  • AUD/USD – A move above resistance at 0.6530 opens the way for a recovery. Recovery into the 0.6670/0.6770 resistance band could then follow. However, we still favour using near-term rallies as a chance to sell.

New Zealand dollar (NZD)

The Kiwi continues to suffer alongside the AUD as a higher-risk currency. The RBNZ hiking by +50bps to 3.50% would be NZD supportive in any normal situation. However, this is no normal trading environment and traders will be thinking about how much more the RBNZ will be willing to hike. Any dovish hints could further hit the NZD.

  • NZD/USD – There is scope for a near-term technical rally that is threatening. There is plenty of oversold position on the RSI to unwind. A decisive close above 0.5755 would open the way for a recovery towards 0.5870/0.5930.


N.B. Forecasts are the latest available consensus 

Brazilian real (BRL)

The real has come under pressure in the past week. After performing well recently, a sharpening of negative risk appetite across financial markets has driven the real lower. Furthermore, the concern will be that even as the USD has unwound some gains, the real has not picked up. Traders will be looking for a more positive outlook for the PMIs and also commodity prices this week to lend the real some support.  

  • USD/BRL – The fluctuations in risk appetite and USD strength continue to leave the pair with a mild uptrend channel over the past six weeks. However, if the near-term USD correction takes hold then a move below 5.1200 support would end this mild positive bias.

Mexican peso (MXN)

The peso remains a currency of stability in the LatAm basket. Although consumer confidence is expected to fall slightly, September inflation is expected to tick slightly lower. This may begin to suggest that the interest rate hikes are beginning to work. It might give the central bank reason to take a less aggressive hiking path after the latest 75bps hike to 9.25%.

  • USD/MXN –the elevated volatility in forex markets has broken the six-week trading range. However, the USD weakening in recent days has pulled the market back into the middle of the old range. We subsequently retain a neutral outlook. Support at 19.750/19.850 remains key whilst back above 20.200/20.300 lends a more positive bias.

This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. INFINOX is not authorised to provide investment advice. No opinion given in the material constitutes a recommendation by INFINOX or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.