Trading forex in the coming week should prove to be volatile to say the least. We’ve got all kinds of data coming out, as well whatever “monkey wrench” the U.S cares to throw into the mix “war wise”.
Overnight China’s manufacturing Purchasing Managers’ Index (CPMINDX) was 51.0 in August, a touch better reading than expected – which could give AUD a boost. Similar reports are expected from both the Eurozone as well U.K, as well the European Central Banks policy meetings on the 5th.
Assuming that “no war” should be generally a positive for markets, I’m sticking to the theory that we will see continued weakness in USD in the coming week, leading into the “war decisions” scheduled for September 9th.
I imagine that whatever decision U.S Congress makes – this should provide an excellent “pivot” in markets, and likely provide the “needed catalyst” to get things moving in a more decisive manner.
In line with my originally suggested time line “mid September” looks to be an excellent time for USD to make a reasonable bounce, lining up quite perfectly with the typical flow “towards US Dollars” in times of extreme fear / risk aversion.
Trade wise my expectations are relatively low next, as I will likely be taking profits on just about anything and everything as I see them come in – looking to get to 100% straight cash for September 9th area, then “possible reversal” of intermediate time frame and “possibly” even fundamental market view.
YOU DON’T WANT TO GET CAUGHT SHORT THE U.S DOLLAR IN TIMES OF GLOBAL RISK AVERSION, AS THE MOVES CAN BE VERY SUDDEN AND VERY LARGE.