Mid week currency markets review
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The markets’ focus has already fallen on the Jackson Hole Symposium that will start tomorrow and it will last 3 days. Jerome Powell of Fed will speak on Friday and the big bet is if he will mention anything about the US Monetary Policy and/or tapering of the bond-buying program of $120 bn per month. In any case, the USD is dropping this week as the USD Index opened at 93.48 and it is currently at 93.05. Earlier today, there was the announcement regarding the US Durable Goods Orders with better than expected results but the USD does not apply a bullish reaction, remaining in a downtrend this week.
EURUSD (current price 1.1738) had a bullish week so far, reacting from the major support of 1.17. The markets anticipate that the loose Monetary Policy from the Fed will carry on and this fact is weakening the USD. The Eurozone and Germany had rather negative PMI results but Germany’s GDP above expectations gave some more credits to EUR. The trend of the pair is remaining bearish, the volatility may increase in the next few days and the support of 1.17 may be put to the test again.
GBPUSD (current price 1.3703) started the week with a strong uptrend but today it seems that it performs a correction. The weak USD is the cause of this as well as the better than expected announcement of the PMI in the UK. There is a strong downtrend that started about 25 days ago that still has not been reversed so, in any possible strengthening of the USD, the pair may turn to the major support of 1.3570.
USDJPY (current price 109.97) is fighting to conquer the milestone price of 110 as it has turned very bullish today. The rising bond yields help this reaction (the US 10-year bond yield is above 1.30%). Japan did not have good results in the announced PMI so it makes JPY even weaker. In case of a clear and solid bullish breakout above 110, there is a good chance for even higher prices.