Article Highlights

  • U.S. labor market conditions index climbed to 1.6 in Oct
  • U.S. Sept labor market conditions index upgraded from 0.0 to 1.3
  • Fed official Rosengren: December hike appropriate unless economy slows
  • Fed official Evans emphasized the importance of a gradual path of rate hikes
  • Prospect of higher borrowing costs weighs on U.S. equities and risk appetite
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It wasn’t such a manic Monday for the majors, as U.S. forex traders still seem to be recovering from their post-NFP hangover and there were no top-tier reports on deck.

Major Events:

U.S. labor market conditions index – Not much of a surprise since the NFP pretty much stole the show last week. Still, it’s worth noting that the index rose from an upgraded 1.3 reading in September to 1.6 in October, as this reflects signs of progress that the Fed is looking for before giving the green light for a rate hike.

Fed officials speeches – Policymakers continued to talk about interest rate hikes in their testimonies, with Fed official Rosengren stating that a December liftoff is appropriate unless the U.S. economy slows. Meanwhile, Fed official Evans saw the need for the FOMC to emphasize that they’ll take a gradual path of rate increases after the first rate hike. Looks like authorities are already assuming that a December hike is in order, huh?

Major Currency Movers:

USD – The U.S. dollar tossed and turned against its forex rivals but ended slightly in the green, supported by risk aversion stemming from the downbeat Chinese trade figures released earlier in the day.

EUR/USD slid to a low of 1.0723 before recovering to the 1.0750 level (-0.12%), USD/JPY fell upon hitting resistance at the 123.50 minor psychological level and is trading at 123.18 (+0.05%), and USD/CHF swung to a high of 1.0059 then to a low of 1.0003 (+0.06%).

GBP – The pound was one of the biggest winners during the trading session, taking advantage of the pause in dollar rallies and advancing against its comdoll counterparts. There weren’t any major reports out of the U.K. then but the move may have been spurred by positive expectations for the upcoming jobs release.

GBP/USD climbed to a high of 1.5126 from its week open of 1.5046 (+0.19%), GBP/JPY soared until the resistance at 186.50 before retreating to 186.16 9 (+0.18%), GBP/NZD rose to the 2.3130 level (+0.12%), and GBP/AUD is up at 2.1450 (+0.17%).

Watch Out For:

  • Japanese current account balance at 12:50 am GMT (1.50T JPY expected, 1.59T JPY previous)
  • Australia NAB business confidence index at 1:30 am GMT (previous reading of 5)
  • Chinese Oct CPI at 2:30 am GMT (1.5% expected, 1.6% previous)
  • Chinese Oct PPI at 2:30 am GMT (-5.9% expected, -5.9% previous)
  • Japanese Economy Watchers sentiment index at 6:00 am GMT (48.2 expected, 47.5 previous)

See more:

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