Central Banks come into scene; Market waits Ben and Mario
Forex pairs in this Article »
EUR/USD
FXstreet.com (San Francisco) - Bernanke and Draghi; ECB and the Fed. The both central banks' chiefs are in the eye of the storm, and the place is the so called Jackson Hole. Market has been trading in tight ranges on Wednesday as investors are waiting for the US Federal Reserve chairman speech in Jackson Hole next Friday and ECB big movement after Draghi's decision to cancel his trip to the economic forum in Wyoming due to a "a very heavy workload."
Market is shy away from big movements and volume doesn't help despite that "Beige Book shows economy would be slightly better than Fed said in August meeting," as Mauricio Carrillo from FXstreet.com commented in his Twitter account. Market is focus on Jackson Hole and reaction was limited across the currency pairs.
In addition, currency market was almost muted after the US GDP upward revision to 1.7% for the second quarter, somewhat faster than the previous estimate of 1.5% and in line with analysts' expectations. Stocks were trading higher.
Wall Street indexes closed higher but easing previous highs, with the Dow Jones advancing 0.03%, the S&P 500 gaining 1.09% and the Nasdaq adding 0.13%. European markets were nearly flat after trading lower earlier in the day, with the Stoxx Europe 600 up less than 0.1%.
Throughout Wednesday session, the Euro was a tad weaker but still near its 8-week high scored last week at 1.2588, supported by expectations the European Central Bank will take bold action to tackle the debt crisis.
Early in the European morning, Draghi repeated his view that the ECB needs to fulfill its mandate, but sometimes this requires going beyond standard monetary policy tools which at times requires exceptional measures.
"The big story out of Europe was the op-ed piece penned by ECB President Draghi in Die Zelt that supposedly echoed the comments he planned to make at Jackson Hole," says Kathy Lien from BK. "In the article he reiterated the ECB's pledge to do what is necessary to maintain price stability."
Kathy Lien thinks that more important is that "he added that single monetary policy may at times require exceptional measures and strong decisions need to be made to manage the euro." Thus, such comments confirm BK's analysts "belief that the ECB is up to something big."
Camilla Sutton, analyst at Scotiabank, saiys market is quiet with a slight bias to shed risk with paralysis ahead of Jackson Hole and extreme event risk in early September as the key themes.
"Our core view is that central bank policy is the primary driver - note that since Mario Draghi commented that the ECB is ready to do whatever it takes, the USD has weakened materially", Sutton says.
EURUSD quotes down 0.3% at the 1.2530 area with immediate technical supports seen at 1.2525 and 1.2485. "Trading remains choppy but the dollar remains vulnerable ahead of Friday", comment BBH analysts. "The euro remains bid but so far is unable to break last week's high near $1.2600. This level should continue to provide some resistance near-term but an eventual break could see the euro extend its gains towards $1.2700".
"In the 4 hours chart technical readings hold flat giving no much clues on direction," comments Valeria Bednarik from FXstreet.com. "A break below today's low may push the pair towards 1.2480 area first, followed later by 1.2440."
Market is shy away from big movements and volume doesn't help despite that "Beige Book shows economy would be slightly better than Fed said in August meeting," as Mauricio Carrillo from FXstreet.com commented in his Twitter account. Market is focus on Jackson Hole and reaction was limited across the currency pairs.
In addition, currency market was almost muted after the US GDP upward revision to 1.7% for the second quarter, somewhat faster than the previous estimate of 1.5% and in line with analysts' expectations. Stocks were trading higher.
Wall Street indexes closed higher but easing previous highs, with the Dow Jones advancing 0.03%, the S&P 500 gaining 1.09% and the Nasdaq adding 0.13%. European markets were nearly flat after trading lower earlier in the day, with the Stoxx Europe 600 up less than 0.1%.
Throughout Wednesday session, the Euro was a tad weaker but still near its 8-week high scored last week at 1.2588, supported by expectations the European Central Bank will take bold action to tackle the debt crisis.
Early in the European morning, Draghi repeated his view that the ECB needs to fulfill its mandate, but sometimes this requires going beyond standard monetary policy tools which at times requires exceptional measures.
"The big story out of Europe was the op-ed piece penned by ECB President Draghi in Die Zelt that supposedly echoed the comments he planned to make at Jackson Hole," says Kathy Lien from BK. "In the article he reiterated the ECB's pledge to do what is necessary to maintain price stability."
Kathy Lien thinks that more important is that "he added that single monetary policy may at times require exceptional measures and strong decisions need to be made to manage the euro." Thus, such comments confirm BK's analysts "belief that the ECB is up to something big."
Camilla Sutton, analyst at Scotiabank, saiys market is quiet with a slight bias to shed risk with paralysis ahead of Jackson Hole and extreme event risk in early September as the key themes.
"Our core view is that central bank policy is the primary driver - note that since Mario Draghi commented that the ECB is ready to do whatever it takes, the USD has weakened materially", Sutton says.
EURUSD quotes down 0.3% at the 1.2530 area with immediate technical supports seen at 1.2525 and 1.2485. "Trading remains choppy but the dollar remains vulnerable ahead of Friday", comment BBH analysts. "The euro remains bid but so far is unable to break last week's high near $1.2600. This level should continue to provide some resistance near-term but an eventual break could see the euro extend its gains towards $1.2700".
"In the 4 hours chart technical readings hold flat giving no much clues on direction," comments Valeria Bednarik from FXstreet.com. "A break below today's low may push the pair towards 1.2480 area first, followed later by 1.2440."
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