Markets turn choppy ahead of Jackson Hole
Fawad Razaqzada August 22, 2017 6:10 AM
In this largely data-void week, markets are likely to remain choppy. Many investors and traders are looking forward to the Jackson Hole Symposium which starts on Thursday, where heads of key central banks may provide clues about the path of their respective monetary policies. Ahead of the Jackson Hole, the US dollar's selling has paused for the time being. Having trended lower for much of this year, most of the bad news might be priced in. So without any fresh catalyst from either the US or elsewhere it may refuse to significantly fall further. Meanwhile sentiment towards the British pound remains negative and so if the dollar were to stage a more meaningful comeback then the GBP/USD would be the one to watch as it could drop heavily. At the time of this writing, the GBP/USD was testing last week’s low at 1.2830. The FX markets may also find direction from the equity and commodity markets. Crude oil slumped yesterday but both contracts have bounced back a tad from their respective key technical levels, although this was having very little impact on the USD/CAD which at the time of writing was higher ahead of this afternoon's Canadian retail sales figures. Copper recovery continues and the Australian dollar remains largely in favour as a result, though the AUD/USD pair was down as a result of the US dollar recovery. Stocks have also managed to stage a small recovery. Consequently, the perceived safe haven Japanese yen, Swiss franc and gold have all eased back. In the event of a dollar comeback and stock market recovery the USD/JPY and USD/CHF may find strong support. However if equities turn lower again then these dollar pairs could drop the most due to safe haven demand. Gold needs to climb above $1295 to $1300 resistance area in order to attract fresh technical momentum buying. If it manages to do that then this may attract the attention of the bears in the equity markets and in turn in the USD/JPY and USD/CHF FX pairs.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.