Global macro overview for 28/08/2017

Global macro overview for 28/08/2017:

The highly anticipated Jackson Hole speeches finally arrived at the end of last week, but neither the Federal Reserve Chairperson Janet Yellen nor the European Central Bank President Mario Draghi elected to comment specifically on monetary policy. Mario Draghi chose to speak solely about economic regulation and the dangers associated with any de-regulation in the current economic climate. He commented specifically in reference to the previous crisis from 2008, as he appeared to talk directly to the Trump administration: "With monetary policy globally very expansionary, regulators should be wary of rekindling the incentives that led to the crisis".

A lack of statements regarding the future ECB monetary policy was treated as positive. Mario Draghi decision not to take the opportunity to talk down the Euro, was considered to be further indication that he is reasonably comfortable with the current level the EUR is trading at (EUR/USD specifically). Nevertheless, the possibility of some sort of quantitative easing tapering that might be announced in September by the ECB Governing Council is still high. More explicit details should be provided on October meeting. Moreover, ECB members will try to prevent aggressive tightening in the financial conditions in the shape and form of a surging Euro currency across the board.

Let's now take a look at the EUR/GBP technical picture at the H4 time frame. The price has hit the 10 months high at the level of 0.9268, but the market conditions look extremely overbought. This is the key long-term resistance for the price, but so far there are no signs of a trend reversal. The next technical support is seen at the level of 0.9144, so it is worth to keep an eye on this pair for any trend reversal patterns ( ie: double top).


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