Trade ideas thread – European session 30 August 2021

Daily thread to exchange ideas and to share your thoughts

Europe looks set for a calmer start to the new week, with risk trades continuing to breathe easier following Fed chair Powell’s speech at the end of last week.

Powell offered no fresh leads on tapering and that sent the dollar lower while Treasury yields declined as well. That said, the drop remains contained but month-end trading this week may make it a bit trickier to navigate before Friday’s non-farm payrolls.

Two key levels to watch this week will be EUR/USD at around 1.1800-05, where a break could extend towards 1.1900 next, and USD/JPY near its 100-day moving average at 109.64 and trendline support around 109.52.

Those two pairs are likely to dictate the state of play in the dollar from a technical perspective so keep an eye on that in the sessions ahead.

From a fundamental standpoint, I don’t expect the greenback to show material weakness (at least not a prolonged one) as the taper timeline is still intact.

The Fed is likely to acknowledge/confirm start of taper discussions in September, announce tapering in November, and begin tapering in December/early next year.

As long as US data is still healthy, that should keep the above sentiment in play and support the greenback amid the lack of initiatives shown by other central banks.

What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.

Articles You May Like

Newsquawk Week Ahead: US NFP, ECB & BoC rate decisions, Japan wage data
How To Trade Forex For Beginners In 2024
“Demystifying Breaker Blocks in Forex Trading: Understanding Limits and Opportunities”
Yen Rises on BoJ Rate Speculation, But Gains Muted
AUDUSD consolidates in a narrow trading range. What is needed to break out of the cage?

Leave a Reply

Your email address will not be published. Required fields are marked *