Another Monday in August and it will likely be another day of looking away from any key fundamental drivers for markets, as we face a bland economic calendar, with little to get excited about today. That’s not to say it will be a quiet week however, with a number of central bank speakers scheduled to speak through the week with a key focus on Jackson Hole in the US where the annual Economic Symposium will host the finance worlds movers and shakers, and a host of central bankers as well with Janet Yellen and Mario Draghi both scheduled to speak later in the week. Markets will be keenly watching headlines and some expect the ECB’s Mario Draghi to use this week as to set to tone for next month’s ECB meeting, however with Euro still trading around 2 year highs will Draghi look to push back on market expectations for tapering in September. Janet Yellen will likely be looking to address the weaker inflationary environment in the US, with expectations for another rate hike in 2017 all but priced out of the USD.
Key levels we’ll be looking at this week:
EURUSD remains range bound, we’ve seen a number of attempts to press below 1.1730/50 area but we’ve failed to close the day below there. So for now 1.1728 offers some support with 1.1666 firmer below that and required to break should we see any resumption of a bearish EURUSD. Resistance at 1.1790, 1.1844 and firmer around highs above 1.1900.
EURGBP. .9150 represents the highs and resistance but the range remains narrow with any move below .9100 finding buyers for now. A break back below .9004 would be needed to see losses accelerate but markets will likely be waiting for Draghi at Jackson Hole, so consolidation may well be the name of the game until then.
GBPUSD: 1.2842 offers support in the downside here, while any rally above 1.2900 in the last 5 days has found sellers re-emerge. Above that 1.3032 provides greater resistance.