The main theme of the last week was Grease’s default and how Europe was going to prevent this. The pair EUD/USD was in a sharp down movement during Monday’s Asian session, but after, the direction was changed and the pair stayed in a bullish correction channel between 1.400 – 1.350. It closed the week at 1.379.
This week will be the FOCM policy meeting (September 21-22). This particular event promises to hold a meaningful sway over the medium-term trend for the greenback. The most probable outcome is that after the two day meeting, Chairman Ben Bernanke will announce changes to the composition of the balance sheet. It will not affect the market a lot, because this variant already included to the greenback’s current price. Any announcement in favor of QE3 will lead to an immediate tumble for the dollar. In the case if the central bank will not announce any intervention to the current economic situation we, will have sharp bearish movement. The most reasonable trading strategy for this week will be to wait for the market’s reaction to the FOCM meeting and join the crowd for a few days.
During last week, the oil price has continued to move inside a triangle (see 4 hour chart). This week we can expect sharp movement to any side. Most likely the direction will depend from the FOCM policy meeting, but it can be a reaction to any important news from the Middle East.
“Oil dependent” currencies have moved according to last week’s review. The AUD/USD pair has processed the “head-shoulders” figure and moved down to 1.018. After this it stayed in a bullish correction trend. NZD has moved not to deep and finished last week in a small plus (0.8%). Most likely both pairs will be in horizontally channeled up to the FOCM policy meeting.
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