Weekly Market Commentary | 19-25.09

Here some of the most important macroeconomic events on the calendar for this week.

Monday >

No major macro data on the agenda, but markets remain in a risk-off regime.

Tuesday>

– The People’s Bank of China decides on monetary policy

– US building permits and housing starts for August are due, expected to decrease further

– Canadian CPI data will be released, likely causing volatility in the USDCAD pair

– ECB President Lagarde’s speech, possibly influencing the EURUSD pair

Wednesday>

– Fed’s monetary policy decision, with investors expecting another 75 bps rate hike. However, the Fed might surprise with a 100 bps (1%) increase, given the ongoing inflation crisis in the US. Volatility will surely be very elevated after the decision

Thursday> 

– Bank of Japan’s monetary policy decision, likely bringing another dovish tilt and sending the JPY further lower

– Bank of England is projected to deliver a 50 bps rate hike, possibly supporting the GBP, at least in the short-term

Friday>

– Preliminary PMIs across Europe for the month of September, with the same data released later in the day from the US

– Canadian retail sales, expected to ease slightly

– Federal Reserve Chair Jerome Powell will deliver opening remarks at a Fed Listens event in Washington DC

Setups for This Week:

GBPJPY

Primary View:

Last week was pretty terrible for this pair and the new week starts off flat, close to mid-term lows

The drop started with a big head and shoulders pattern (orange)

GBPJPY is below a crucial resistance on the 163.5. As long as we are below, the sentiment is negative

Alternative View:

If the price comes back above 163.5 a buy signal will be triggered

CHFJPY

Primary View:

CHFJPY also has a big head and shoulders pattern

A sell signal is on because the price broke the neckline (purple) of this formation

The target is on the red up trendline

Alternative View:

If the price comes back above the neckline, we’ll have a buy signal

SP500

Primary View:

SP500 had a catastrophic week with the price breaking the mid-term up trendline (purple)

As long as we stay below, the sell signal is ON

Alternative View:

If the price climbs back above the purple up trendline, the buy signal will be restored.