Weekly blog for the week starting 26th September 2016
Wednesday 21st was as expected by many economic analysts – no change in interest rates as well as a little change has occurred in the language of the Fed statement which Yellen read. You can go and view the changes by clicking here (Text appearing for the first time in the new statement is in red and underlined. Black text appears in both statements. Text removed from the July statement is in red with a horizontal line through the middle).
As expected the Dollar currency showed some weakness but it is still inside the wedge marked by the two diagonal yellow lines. Until a break occurs, it will be difficult to know the future direction of the Dollar. As more weeks go by I will be able to make an educated decision as it will give a heads up on some of the major currencies such as: EURUSD, GBPUSD, AUDUSD, NZDUSD and USDCHF.
This coming week we have many Central Bank Governors speaking throughout the week so high volatility is expected in the market. Mario Draghi is due to speak a couple of times at the beginning of the week while Janet Yellen is due to speak and testify midweek. You want to also pay attention to what Governor Kuroda has to say as this past week the Japanese Yen has seen some volatility in the Yens’ pairs however with no proper direction. Let us not forget as well about Governor Poloz, Central Bank of Canada and Governor Lowe, Reserve Bank of Australia.
Not much has changed with EurUsd either. Although this past week we had some positive data coming out of the Euro zone, the price closed at the open of the previous week’s candle. During the past 4 weeks we have seen the Euro ranging with a price movement of 150 pips +/-. I will expect the EURUSD to test again the support at around 1.1130 price area. While on the weekly time frame it shows a rectangular formation, in the daily time frame is shows a bear flag movement but both patterns have the same message: sell. As stated in the Dollar Index write up, pay attention at the two Central Bank Governors (Euro and USA) as we will see a possible increase of volatility.Written by Elkana Roveglia from wwww.TakeMyTrades.com