With the onset of autumn, traders must square up against increasingly volatile markets following the quiet summer months. This is a time when a multitude of events will be taking place, and it is very important to know how to reap from such opportunities if a trader is to be successful.
October is full of fundamental events, such as the RBA rate decision, RBNZ announcements, and the highly awaited US Non-Farm Payrolls. For traders, these events are highly crucial because, based on those events, they have a better arena in which they can make deliberated decisions in forex markets.
In this article, we take a closer look at how the RBA, RBNZ, and NFP events set the stage for trading in October, considering possible strategy and market reactions that are going to help you in making the most of your trading opportunities.
RBA Interest Rate Decision—A Major Market Mover
The month starts with the RBA’s interest rate decision, scheduled to be announced on Tuesday in the Asia-Pacific session. Because the financial consensus is looking for the rate to stand still at 4.10%, traders should be prepared for market movements in either direction.
Market Impact:
The AUD will probably be quite volatile around this announcement. Because this announcement follows a period of successive decline in the inflation rate, the market’s perception will likely be felt about the Australian economy. Traders should also watch the AUDCAD—a true commodity pair, which may move significantly based on this announcement.
Technical Setup:
AUD/CAD – A double bottom pattern fashions as 0.8598 and 0.8564 levels are watched for a price break, potentially giving way to a fill-in of an untested “COVID wick” from March 2020. Traders should look to sell pullbacks off of it after the break and continue to be watchful for further price action into the announcement.
RBNZ: Playing Close Attention to the Kiwi
The other main event of interest for traders on Wednesday will be the RBNZ rate decision. Normally hawkish, the RBNZ is expected to hold steady around 5.5%. However, with an inflation number of close to 6.0% year-over-year for New Zealand, it is impossible to rule out a surprise hike in rate.
Market Impact:
The NZD will be in play at this announcement. Below is the key level in the Kiwi, at 0.595, which reflects a 62% mark of the range from October’s lows to 2023’s highs; this would keep the outlook for the Kiwi above this level bullish and below this bearish.
Resistance at 0.595 comes in as a level where participants should look to buy the move in the NZD, which also translates to close due attention with regard to sell signals on the break below this critical level. This helps traders manage risk while positioning for surges in prices.
NFP: The Big Reveal
Therefore, the whole point of this month’s trading opportunities comes on Friday when we have the U.S. Non-Farm Payrolls, or NFP, report—which came in at 187,000 jobs added last month. It may well revise down that figure, according to analysts, after all, similar to the trend of declining NFP revisions throughout 2023.
Market Implications:
The NFP report will be critical to the extent of labor market strength in the US. Unemployment is one of the most important indicators to look at, especially as it rebounded to 3.8% in August. The magic number here is 4%, which is the Fed’s benchmark and the indicator that may show the recessionary pressures.
The main attraction would, of course, be the spot gold market, the XAU/USD. Currently trading in the range of 1850-1865, traders should remain alert for support structures around 1825 and 1800. Should the dollar of the U.S. show a hawkish response, this could eventually result in a push-down action on gold prices—a potential buying opportunity at lower levels.
Navigating the Trading Landscape in October
With these two key events, October is shaping up to be a very interesting month indeed. Here’s how to position yourself to take full advantage of the landscape:
Know what’s happening:
The trader has to stay ahead with economic news and any event that may affect the market. From RBA decisions to RBNZ announcements, to the NFP results, he must be ready for quick changes in market sentiment.
Technical Analysis:
Conduct studies in technical analysis to identify areas of important support and resistance. Be able to read specific chart patterns, such as double bottoms and divergences, to infer changes in prices.
Establish a Solid Trading Strategy:
Instead, have your trading strategy in place. Whether to take advantage of short-term price action or longer-term trends, having this clear plan will help you stay focused through market fluctuations.
Risk management:
Always use risk management analysis, such as setting stop-loss orders and predefining your risk-reward ratios before entering the trade. This is a very important discipline, which can help protect capital in your portfolio during volatile markets.
Become Engaged in the Trading Community:
Consider using the resources available to you in the trading room, including but not limited to the TST framework. Specialty strategies for events such as the RBA, RBNZ, and NFP.
Conclusion
Considering how the beginning of October showed some great opportunities for trading, an energetic mix of events such as the RBA, RBNZ, and NFP is just around the corner. Being aware of the consequences built from such news announcements and introducing sensible trading methods, traders will be prospectively placed for prosperity in the ever-changing landscape of the market.
As the leaves change and participation ramps up into the markets, remember that successful trading is a function of your process. Stay informed, add to your tool belt with the benefits of technical analysis in mind, and be sure to maintain focus on risk management as this challenging month faces you head-on.
