Next Week’s FX Strategy: Outlook for AUD, CAD, and EUR
Trading Results from October 14 to 18: -35,258 USD
This week also ended with a negative balance. The buying of AUD and the selling of EUR struggled to gain traction, and while I positioned myself based on the Canadian CPI and comments from Bank of Japan Governor Ueda, I faced a directionless market. However, there are times like this in trading, so I will proceed calmly without rushing.
Key Points of Interest
1. Bank of Canada Policy Committee: Major Rate Cuts Possible by December
Selling pressure prevails for the Canadian dollar as attention turns to the Bank of Canada (BOC) policy committee meeting on October 23. The probability of a significant 0.50% rate cut has reached about 80% in short-term money markets. While economists are divided on their opinions, further rate cuts are expected, and CAD is likely to trend lower.
The Canadian CPI shows a decrease in the overall index to 1.6% year-on-year, with the core index at 2.3%. This has led to a growing view that there is room for rate cuts. The Canadian dollar will continue to be viewed from a selling perspective.
Outlook for Each Currency
- U.S. Dollar (USD): Neutral to Buy
Expectations for significant rate cuts by the FOMC have diminished, and a stable movement is anticipated. Attention to geopolitical risks is necessary. - Japanese Yen (JPY): Neutral to Sell
Expectations for a rate hike by the Bank of Japan have faded, and the yen is expected to continue weakening. The upcoming House of Representatives election on the 27th could also contribute to yen weakness, warranting caution. - Euro (EUR): Sell
With the ECB deciding on additional rate cuts and warning of deteriorating economic sentiment, the euro faces high downside risks. - Australian Dollar (AUD): Buy
The RBA maintains a cautious stance on rate cuts, and the AUD is showing stability. The positive employment data from September supports a buying outlook for AUD. - New Zealand Dollar (NZD): Sell
Weak CPI data has heightened expectations for rate cuts, leading to increased selling pressure. - South African Rand (ZAR): Neutral to Buy
Expectations for government policy support are likely to lead to stable movement. - British Pound (GBP): Neutral to Sell
With the UK’s inflation indicators slowing and expectations for rate cuts increasing, the pound is expected to face resistance to upward movement. - Canadian Dollar (CAD): Sell
The weakness of the CPI and expectations for BOC rate cuts suggest the CAD will continue to trend lower.
Weekly Summary
Next week, changes in market perceptions regarding monetary policy in the U.S. and Japan are expected to influence the forex market. Attention should also be paid to the tensions in the Middle East and the release of major economic indicators as trading proceeds cautiously.
Afterword
Thank you for reading this week’s FX trading report. In trading, calm judgment and concentration are essential. As autumn arrives, let’s manage our health properly and continue to work on our trading next week. Below, I introduce some autumn health management tips.
Autumn Health Management: A Trader’s Guide
- Balanced Diet: Consume foods rich in vitamin C and dietary fiber to boost immunity and maintain concentration. Eating fruits and nuts during trading breaks is beneficial.
- Frequent Hydration: Incorporate warm beverages to stay hydrated while keeping your body warm.
- Ensure Quality Sleep: Aim for a regular lifestyle with 7 to 9 hours of sleep. Avoid smartphones before bed and relax to achieve deeper sleep.
- Moderate Exercise: Light stretching or walking can improve blood circulation and enhance concentration.
- Stress Management: Practice meditation or deep breathing to reduce stress and maintain mental health.
By being mindful of these autumn health strategies, you can enhance your trading performance.
