Welcome to this week’s Market Blast Fundamentals.
I’m Brad Alexander and, on behalf of Valutrades, today we will take a look at EURUSD, USDTRY, GBPUSD, USDJPY and EURJPY.
We have a busy week coming up so let’s start with Japan where JPY has been getting weaker all year and we have been looking at the possibility of a reversal.
Looking at today’s 4-hour charts, we see that a hint of reversal on most pairs even though the Bank of Japan is fighting Deflation and a bond-yield differential with the United States.
However, keep in mind that we have a general election this Sunday and, without going into details, not everyone running is happy with the idea of a weaker Yen.
Also we have an Interest Rate decision and statement on Thursday.
Speaking of which, we have Interest Rate decisions from the Bank of Canada and the European Central Bank this week so watch for volatility and some opportunities.
The UK Pound is weaker today, as well, and the market is waiting for Wednesday and the Chancellor’s budget as the UK is facing Inflation issues and possible tax increases.
The Turkish Lira has reached 9.8 against USD, which is a record, with a bigger than expected Interest Rate cut but the Central Bank is in disarray and has lost all credibility now.
President Erdogan has caused a diplomatic issue by ordering the expulsion of ambassadors from 10 major countries.
We have the opportunity to trade the reversal on the Turkish Lira, but we will need to see a lot of better news before opening a position.
Investors will be watching key US economic events this week to see where the economy is going but next week will be critical as the US Congress will try to pass President Biden’s economic packages and the US Federal Reserve may announce the beginning of tapering which will see USD going stronger.
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That’s all for now. Happy trading with Valutrades and we will see you tomorrow.
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