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Volatile week ahead Scottish Referendum and FOMC set to take centre stage

Article By: ,  Financial Analyst
September 15, 2014 10:04 AM

The Aussie dollar was weak from the open last night after China showed a sharp slowdown in activity in August: calls now grow for more stimulus. AUD/USD is now trading below 90 cents, with the monetary policy meeting minutes to be released overnight.

The pound has started trading weak so far, with the Scottish independence in the balance and its fate to be decided this Friday.

Up and coming this week for the GBP, which will add to its volatility going into Thursday, is Tuesdays CPI is release, Wednesdays MPC Bank rate votes, and Thursdays retail sales.

It’s a very busy week for the pound we can expect some volatility as traders try to decipher new data and the potential breakup of the union.

Cable is currently trading at the 1.6240 level still 100 pips lower from the 5th September close, when the poll showed the ‘Yes’ vote was in the lead. If the ‘No’ vote stays in the lead it possible this gap could be closed before the announcement.

The euro is slowing edging upwards and in a very tight range, and will possibly be affected by the vote on Thursday on the basis of the GBP reactions.

This week, the German ZEW is released on Tuesday and the Final CPI is released on Thursday.

The JPY is at its weakest still since 2008, now trading at 107.20 level, the USD is the cause of the gains as the FED rate bets are high for next year.

The US data out this week starting from tomorrow is the Core CPI, and then the FOMC Statement and rate announcement on Wednesday, always an interesting reaction to this as it could push the USD/JPY even higher.

With the FED chair, Yellen, normally very cautious and dovish in these statements, will be interesting to see the USD/JPY reaction.

Thursday, the US’s building permits, unemployment claims and Philly FED manufacturing are released.

There’s lots of potential opportunities this week as volatility looks set hit the markets.

 

EUR/USD

Supports 1.2925 1.2900 1.2885  | Resistance 1.2968 1.2977 1.2982

 

USD/JPY

Supports 107.20 107.13 107.00 | Resistance 107.38 107.45 107.54

 



GBP/USD

Supports 1.6237 1.6222 1.6200  | Resistance 1.6273 1.6288 1.6298

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