So Draghi has decided not to go to Jackson Hole, probably because he will be too busy buying bonds at the time (or according to the market setting out detailed plans to announce ont eh 6th of Septmeber about bond buying)? Apparently there will be no real ECB presence there, that said the euro spiked pretty high (on the bond plan potential). It does mean that we are unlikely to see any coordinated action comments at Jackson Hole though (like we really expected any - not worked together so far).
The markets at the moment seem pretty focused on the fact that the ECB bond buying will happen in the near-term (September the 6th announcement above) and that the Fed is likely to raise comments on QE3; in our ever sceptical views we think there is a relatively big possibility that Jackson Hole doesn't provide strong views on any of this (although it doesn't really take strong views anymore), in which case we could see the market drop in risk assets before central banks take action to step in. All that said, at the moment the technicals are leading the way and we still favour a move higher in the euro and pound.
Today we also saw Spanish bond yields dropping lower in an auction, reducing the borrowing costs also spurring the euro. Later in the day we also had weaker-than-expected US consumer confidence weakening the dollar slightly.
EUR/USD
Pushed higher on the the expectations that Draghi will announce bond buying on the 6th of September. We may still see a push lower following moves today, especially if Jackson Hole disappoints but we are still looking for long entry signals on any pullbacks.
GBP/USD
The pound started to play out as we expected, popping lower into the blue box then pushing higher off a test of support. Like the euro we could still see a move lower but we are positioning ourselves long this pair.
AUD/USD
Little action in the aussie today, we are still looking for good entry signals on a retest of resistance.
USD/JPY
We highlighted in commentary yesterday that the small pin could play into the range for a nice short trade and that is exactly what it did, allowing us to capture a nice day trade.
GBP/JPY
Trade we quite like at the moment which avoids the euro and the dollar, nice entry today following a previous strong entry allows us to position ourselves long again.
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