End of the week currency markets review

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The speech of Jerome Powell at the Jackson Hole Economic Symposium today, is the big event of this week. Any possible hints regarding the US Monetary Policy and the bond-buying program of $120 bn per month, may boost the USD. In the opposite case, the dollar can drop sharply. Earlier this week, Robert Kaplan from the Federal Reserve Bank of Dallas reversed his opinion about tapering and this was a major fact that boosted USD yesterday. There was also an announcement of the US GDP but the markets seem to ignore it and they focus on Powell’s speech. The explosions in Kabul brought a temporary risk-off mood to the markets but things smoothed out very soon.

EURUSD (current price 1.1762) is bullish this week and the comeback of the USD yesterday could not change the weekly trend. Europe did not have important announcements during the last 2 days so the major player of the pair was the USD and all the speculation regarding a possible tapering by the Fed. The overall trend has not changed and maybe the support of 1.17 is still the target of the sellers.

GBPUSD (current price 1.3727) has had a remarkable bullish reaction this week, performing more than 100 pips since the beginning of the week. No important news is included in the UK’s economic calendar during the last few days so the USD is the major dominator for the pair. GBPUSD is moving away from its strong support of 1.3570 but the downtrend of the last 3 months has not been reversed so far. Any strengthening of the dollar (maybe in Powell’s speech?) may press the pair lower.

USDJPY (current price 110.18) is bullish this week, mostly due to the bond yields recovery (US 10-year bond yield above 1.35%) but it has not escaped from the milestone price of 110 for good. The inflation in Japan was in the negative area again and this does not help the JPY. USDJPY needs a clear bullish breakout above 110.80 to take a bullish trend.


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