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Market's pulse today and tomorrow. What will cause effect over the trader's frame of mind
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Loading...During the last two day of the week the financial markets are expected to be quite volatile, which will be caused by 2 main factors. The first one is: comments of ECB's governor Mario Draghi, considering the future of the current monetary policy, which will be held today at 15:30, and the second factor is: the cautiousness for the upcoming weekend when is expected that North Korea will make new ballistic missile test at 09.09.2017.
Of course we must take in consider Trump's tweets, but they won't be the main event until the end of the week.
It is expected that the ECB president will be more conservative in his speeches and will not allow a new EUR rise because the ECB has suggested that the current levels of the single currency are high and may have a negative impact on the eurozone economy. This is the reason why Mario Draghi will not specify a date for initiating a QE reduction. However, we see a clash of positive attitudes towards the ECB's economy, which will sooner or later result in a suspension of the program for quantitative easing and a strong EUR growth, precisely because of the good data for the euro area economy since the beginning of the year.Therefore, we can assume that most of these expectations are calculated in EUR / USD prices. For these reasons, the uncertainty about the direction of EUR today is great, but the important thing is that the EUR already has sound foundations and even if there is a correction, it will probably be short.
Recent forecasts have shown that European banks are positively upbeat in their expectations for the EUR, which could lead to a EUR rise before Draghi press conference, which will lead to the diddle of the movement before the meeting and after the press conference to see a correction. A higher euro may have a short-term effect on lower levels of European stock indices, a slight decline in USD / JPY and a GBP / JPY increase.
The biggest influence on Friday will be the speculation that North Korea is likely to make a new missile test and rocket launch on 09.09.2017 Saturday, the date of the establishment of the republic. This will lead to caution in the weekend market and possibly stronger yen, gold, CHF and weaker US shares.
The volatility of the market will rise for these two reasons.
Stefan D.Angelov - head of Stocks Trading
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