Trade War, SNB and BOJ will move the markets next week - 17.09-21.09.2018

Next week, central banks will be again in focus for investors. We expect the decision of Bank Of Japan on Wednesday, where market participants do not expect surprises. The bank is likely to remain cautious, highlighting the rising geopolitical risk posed by the US-China trade relationship. As for the JPY, the strength of the currency will be dictated by Trump's decisions rather than those of the Bank of Japan.

Where to look for profits early next week? AUD/JPY provides the best opportunity for Short, both technically and fundamentally. The Australian will remain under pressure until we see a lasting solution between the US and China on a trade dispute that will at the same time inspire confidence in JPY bulls. We remain awaiting the first quotes after the weekend when we can position ourselves as well as possible with minimal risk. NZD will also remain under pressure, but at the moment the currency remains over-sold against major currencies and does not provide a good opportunity for shortening. However, it is a good idea to place the kiwi in your Watch List and, if appropriate, to adjust the position in the ascending direction.

The decision of the Turkish Central Bank over the past week will prove to be key to trading in the next week. After raising interest rates to record levels, the USD/TRY price movement reached key levels of support that currently seem to be able to withstand. Looking at the 4-hour chart, we find that the price is in the support zone formed by the 200SMA, the horizontal horizon, and close to 50% Fibonacci correction of a large initial wave in the upward direction. 50 and 200SMA remain beached - the trend remains in place. DeMarker points up after testing the over-sales zone - a likely turnaround. Sequential counts 3 out of 13 possible top ups - the new upward pulse is still at an early stage giving good levels for long positioning. Price Action - Pin bar in the second test area of ​​the support zone that was activated during the last 4 hours - a positive signal showing the dominance of the bulls. Positioning is now too risky given the strong volatility and the upcoming weekend. It is good to wait for the opening of the markets on Monday to make sure that the price will stay above the zone.

On Thursday, we expect the Swiss National Bank's Swiss default rate decision as well as a press conference of the bank on monetary policy in the country. Traders do not expect any changes in the current interest rate, the main thing to be monitored is the bank's press conference, from which it will be clear what the plans are for in the future. It is possible to observe a slight change of tone, a rise in interest rates and a shortening of the QE program. With such comments from central bankers, I expect CHF to get short-term support.

Economic calendar for next week - 17.09 - 21.09.2018

Monday - Holiday in Japan
12:00 Eurozone - CPI

Tuesday
No Scheduled Hour: New Zealand - Westpac Consumer Sentiment
04:30 Australia - Housing Price Index
04:30 Australia - RBA monetary policy report
15:30 Canada - Manufacturing Sales
23:30 US - API Crude oil inventories

Wednesday
01:45 New Zealand - Current account
02:50 Japan - Trade Balance
04:30 Australia - Speech by Christopher Kent, Deputy Governor of RBA
06:00 Japan - BoJ decision on the base interest rate
06:00 Japan - BoJ Report on Monetary Policy
The Bank of Japan press conference is held without a scheduled time
11:30 UK - CPI
15:30 United States - Building permits
15:30 USA - Current account
16:00 Eurozone - Speech by Mario Draghi, Governor of the ECB
17:30 US - Crude oil inventories

Thursday
01:45 New Zealand - GDP
10:30 Switzerland - SNB basic interest rate
10:30 Switzerland - Press conference of SNB
15:30 USA - Jobless claims
15:30 United States - Philadelphia Manufacturing Index

Friday
02:30 Japan - CPI
10:30 Germany - Production PMI
11:00 Eurozone - Production PMI
11:00 Eurozone - PMI in the field of services
14:00 United Kingdom - Bank Of England Monthly Bulletin
15:30 Canada - CPI
16:45 USA - Production PMI
20:00 USA - Baker Hughes Oil rig count

Read more:

• Investors pull record amounts out of US stock funds
• Oil rises after OPEC+ says to keep output cuts
• The Weakest Currency Of Them All
• China: April growth weakened due to distortions
• IMF cuts global growth outlook again