Today’s Key Market Drivers – 26th September 2017
The Euro has come under increasing pressure following the German National election on the weekend that saw Angela Merkel’s conservative party lose considerable ground to far-right political parties. There is a degree of uncertainty hanging over the Euro at present after rallying 13% against the US Dollar in 2017. Traders all throughout 2017 priced in the likelihood of less stimulus and higher interest rates at the ECB and the Central Bank confirmed earlier this month that it would likely begin to wind back its stimulus program in October this year. Ever since those comments from Mario Draghi hit newswires the Euro has not been able to make fresh new highs. Germany could now take months to cobble together a coalition government and therefore all the good news for the Euro was baked into the price before Draghi announced the ECB’s potential planned rollback of stimulus. Technically and fundamentally the Euro is due for a pull back and the chart below marks the change in trend direction price at 1.1813 that is shown on the Daily Trading Plan. The Euro has also just closed a 4-hour bar below the 200 EMA which is the first time it has done this since April 18th this year.
I mentioned around 10 days ago that I thought the US Dollar has seen its lows for the year and a move back higher was likely. The greenback continues to be supported as traders are still pricing in a 70% chance or better the Fed lifts the official cash rate one more time before Xmas.
The economic calendar shows no high impacting news scheduled for today however at 2.45am AEST Wednesday morning US Fed Chair Janet Yellen is delivering an address on US Inflation, Uncertainty and the US economy and I expect her address to have an impact on financial markets. New Zealand Trade Balance data that was released this morning came in weaker than expected and pushed the Kiwi Dollar a little lower. The RBNZ announces its monthly interest rate decision on Thursday at 6.00am AEST as well as releasing its latest statement on the state of the economy and I expect increased volatility on the Kiwi Dollar at this time.
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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