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*Good morning/afternoon everyone!*
Most of the major currencies are trading higher this morning ahead of Fed Chair Powell’s speech at Jackson Hole. We know that Powell and Poloz will be the only central bank leaders attending as Draghi, Carney and Kuroda stay behind. Judging from the price action of USDJPY, investors are cautiously concerned that Powell will talk down the dollar because while USD/JPY is holding onto yesterday’s gains, the greenback is trading lower against all other major currencies. AUD/USD traders may be legitimately satisfied with the political resolution in Australia, but relations between the US and China remain chill as their trade talks end with no real resolution. Although the EURO is trading well today, we are growing increasingly concerned about the currency because Italian bond yields are closing in on their highest level in 4 years. We’re only about 4bp from there. Sterling traded strongly overnight and could experience a further squeeze up to 1.29. Higher oil prices and risk appetite is driving USD/CAD lower with the pair likely to make move down to 1.3050. The New Zealand dollar should follow AUD higher especially after last night’s trade data. The greenback is trading with a softer bias ahead of Powell and the selling pressure could remain in place before the Fed Chair speaks.
*The MAIN THEMES I see today are*
+GBP, +AUD, +CAD, +CHF, +NZD
+EUR/USD but -EUR vs. other currencies
*Today’s Initial Trades*
Here’s the summary –
1. Sell USDCAD at 1.3068, Stop at 1.3096, Target 1.3040
2. Sell EURGBP at .9005, Stop at .9033, Target .8977
3. Sell EURAUD at 1.5887, Stop at 1.5915, Target 1.5859
4. Sell USDCHF at .9839, Stop at .9867, Target .9811
Close ALL open day trades by 10:20AM NY / 15:20 GMT