MARKET BRIEFING – LONDON OPEN 03.09.2015
Unless you have been on vacation for the whole of August you might have noticed that the foreign exchange markets have been very volatile during the prior month.
During the summer months, we are supposed to see the markets trade within small ranges. However, this has not been the case with typical Average True Range levels (ATR) ranging from the 140’s for EURUSD down to a still very large 90’s for AUDUSD.
Although August has come and gone, the fallout from China still continues to rile the markets. With the summer coming to a close, the action on the Forex markets during the coming autumn and winter months should continue to entertain some and give others frayed nerves.
Having only arrived back from my own mini-family break yesterday I have had a busy couple of days trying to catch up and make sense of what has gone on before. What comes to mind is a market that offers a lot of upside opportunity and downside risk.
Understanding and being aware of the up and coming event risks is of paramount importance and although we are now nearing the close of the first week in September, event-driven market volatility could see Thursday and Friday experience some extreme price action.
The big event of today is, of course, the European Central Bank’s press conference which takes place at 1:30 pm (London). These events are always keenly anticipated however this press conference is taking place after the tumultuous events that can only be described as the real China syndrome.
We have already have had a taste of what could be in store for us with the ECB Executive Board Member Mr. Peter Praet stating that Central Banks inflation targeting will take into account any slowdown in China and the drop-off in the price of Oil.
Mario Draghi the ECB boss will no doubt touch on these issues during today’s press conference, however, there is the added worry of what to do about the Euro. Confidence in the single currency has returned with traders bidding up EURUSD during the late spring and summer months. Only last week from a technical perspective EURUSD printed a weekly higher high.
If this bullishness for the Euro continues the ECB will become increasingly concerned that a strong single currency will play havoc to its inflation targeting. I always find the subject of inflation targeting a little confusing. Is low inflation or deflation such a big issue when businesses and the citizens of the European Union can purchase products, services and commodities for less?
I am sure Mr. Draghi will enlighten us with more pearls of wisdom this afternoon.
EURUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.1373
Target 2: 1.1079
Projected range in ATR’s: 0.0147
Daily control level: 1.1320
GBPUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1.5414
Target 2: 1.5182
Projected range in ATR’s: 0.0116
Daily control level: 1.5330
USDJPY
The intraday technical outlook
Trend 1 hour: Down
Target 1: 121.80
Target 2: 118.83
Projected range in ATR’s: 1.48
Daily control level: 121.40
USDCHF
The intraday technical outlook
Trend 1 hour: Up
Target 1: 0.9802
Target 2: 0.9566
Projected range in ATR’s: 0.0118
Daily control level: 0.9560
USDCAD
The intraday technical outlook
Trend 1 hour: Up
Target 1: 1.3396
Target 2: 1.3140
Projected range in ATR’s: 0.0128
Daily control level: 1.3250
AUDUSD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 0.7134
Target 2: 0.6940
Projected range in ATR’s: 0.0097
Daily control level: 0.7060
GOLD
The intraday technical outlook
Trend 1 hour: Down
Target 1: 1149.15
Target 2: 1117.71
Projected range in ATR’s: 15.72
Daily control level: 1142.00
OIL
The intraday technical outlook
Trend 1 hour: Up
Target 1: 48.95
Target 2: 43.87
Projected range in ATR’s: 2.54
Daily control level: 43.50
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