Mrs Yellen at Jackson Hole. (Aug 27th)

Central bankers meet in Jackson Hole, once a year and have the opportunity to set the pace for the months to come. Mrs Yellen during her speech said that an increase in USD interest rate is now closer. The FOMC has 3 more meetings, September, November and December and an increase could be announced during one of them. Friday’s NFP is also important since Mrs Yellen is binding the increase with economy’s health and new jobs are certainly a sign.
The week started with important opening positive gaps for the JPY. 59 for the Usd/Jpy, 58 for the Gbp/Jpy and 50 for the Eur/Jpy. The Usd/Jpy closed with a profit of 101 pips to which the opening gap should be added.
Mrs Yellen on Friday woke the pairs from their August sleep, moving them in one direction first and then in the opposite. The Eur/Usd had an ATR of 160 pips, almost 3 times bigger than the 20 day average.
The pairs, despite Friday’s move, remain inside predefined ranges and obey technical analysis rules. The Eur/Usd, Gbp/Usd and Aud/Usd bounced from resistance and are moving lower. Eur/Jpy remains inside August’s range, Gbp/Jpy moved higher but needs a lot of pips before testing resistance. Even if it looks like a safe trade (going long) I will avoid it.
Eur/Aud remains inside the trading range but was trading 100 pips lower. The pressure on the pair remains. The Gbp/Aud started the week by moving higher but the daily descending DeMark trendline prevented the pair from moving higher. I expect it to start moving lower again.
The Usd/Jpy is moving higher but did not break the trading range. It needs another 150 pips up move to confirm a change in the trend.
The Usd/Cad closed with a profit but remains in the middle of the trading range.A GB bank holiday on Monday will keep the liquidity low as London traders will not be at their desks. Friday’s NFP is very important since Mrs Yellen will decide for an interest rate raise based on it.

 

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