The news feed will be full of events in the current trading week. Leading Central Banks will decide on further monetary policies. Important economic releases will also be published. Investors continue to monitor the trade negotiations between Washington and Beijing, the Brexit process and the situation in the oil market after the attacks in Saudi Arabia. Currently, the dollar index (#DX) is consolidating near monthly lows. Financial market participants have taken a wait-and-see attitude.
The key event will be the Fed meeting which is scheduled on September 18. Earlier Donald Trump repeatedly criticized the Central Bank for its "strong dollar" policy and called for a long and aggressive cycle of lowering the interest rates. Recent economic reports from the US were ambiguous. The US dollar is under pressure due to a slowdown in global economic growth, as well as an inversion of the US government bonds yield curve.
Most experts agree that the Fed will reduce the range of key interest rates by 25 basis points to 1.75%-2.00%. We recommend paying attention to the comments by representatives of the Central Bank, as well as to updated economic forecasts. The Fed representatives may indicate a further rate of monetary policy adjustment.
Let’s consider the current technical pattern on the USD/JPY currency pair
- Support levels: 107.450, 106.650, 105.750
- Resistance levels: 108.250, 108.800, 109.250
The USD/JPY currency pair has become stable after a significant increase since the beginning of this month. A trading instrument is consolidating. At the moment, the key support and resistance levels are 107.450 and 108.250, respectively. Demand for the "safe haven" currencies has resumed due to the tense situation in the Middle East. Indicators do not give accurate signals:
- - The price is consolidating near 50 MA;
- - The MACD histogram is in the positive zone, but has started to decline.
We recommend opening positions from the key levels.
If the Fed publishes weak economic forecasts and indicates a more aggressive rate of decline in interest rates, it is necessary to look for entry points to the market to open short positions. The immediate goal for profit-taking is the "mirror" support level of 106.650.
An alternative could be a further increase in the USD/JPY quotes to 108.800-109.250.
When tracking positions, one should use a trailing stop.
by , 2019.09.17
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
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