Technical outlook on USD/JPY, EUR/USD, AUD/USD [Video]

 

Nonfarm payrolls, ISM PMIs, Government shutdown – USD/JPY

The final quarter of the year is underway, and traders are waiting for any news that could support the dollar after an almost 13% drop against its major peers since the start of the year. Last week’s data confirmed that the US economy continues to expand at a healthy pace, but the Fed has already telegraphed that more back-to-back rate cuts are necessary. At the same time, the possibility of a more aggressive monetary easing policy has not completely disappeared, as the big misses in previous jobs reports still linger in investors’ minds.

Friday’s nonfarm payrolls report will take center stage—unless a potential government shutdown on Wednesday delays the release until funding is restored. In that case, investors may turn to private surveys such as the ISM business PMI figures for clues (Wednesday & Friday)

Technically, USDJPY once again failed to pierce the 150 level, shifting attention back to the downside, particularly as the BoJ’s summary of opinions and Governor Kazuo Ueda’s speech could reshape rate-hike expectations in October. Still, a couple of support levels—including the 200-day SMA and the 146.50–147.40 zone—could prevent a deeper deterioration in the outlook.

EZ CPI inflation – EUR/USD

In the euro area, attention will turn to September’s preliminary CPI inflation figures on Wednesday, while PPI readings could provide further evidence on price increases on Friday. The ECB has paused its rate-cut cycle but kept all options open. Thursday’s inflation data could determine whether the central bank is on the right path, with forecasts pointing to some stickiness marginally above the ECB’s 2.0% target.

Encouragingly, EURUSD has secured a strong footing near its 50-day SMA, as it did in August and September. However, whether it can attract enough buyers to break through the challenging 1.1770–1.1850 zone remains to be seen. For now, the 20-day SMA is capping additional gains around 1.1730.

RBA policy meeting – AUD/USD

AUDUSD has also pivoted around its 50-day SMA, but the rebound appears to lack bullish conviction. The RBA is expected to keep its benchmark rate steady at 3.60% on Tuesday and maintain a relatively cautious stance on further cuts, after Michele Bullock stressed that some policy tightness should remain in place—downplaying the likelihood of cuts beyond what markets are already pricing in (a 25 bps reduction over the next year).

A relatively more hawkish RBA and a dovish Fed could support the pair, though with the aussie being highly sensitive to international trade risks, upside momentum may not be straightforward.

In the meantime, the pair must push beyond the 0.6600 level to attract fresh buying. Otherwise, a bearish continuation below 0.6540 could become a real possibility.