Global economic uncertainty and the possibility of a looming recession was tough last week for stock markets as investors rushed to short term bond investments due to a loss in confidence for long term economic growth. The market recouped some losses by Friday with the expectations that central banks are likely to ease their monetary policies.
The U.S. Federal Reserve and 19 other central banks have already loosened monetary policy. Tomorrow, Tuesday August 20th the Reserve Bank of Australia will release their meeting minutes at 1:30 GMT. Wednesday the 21st the Reserve Bank of India will publish their meeting minutes. On Thursday we will see the interest rate decision in Indonesia and the Poland Central Bank will also to release their meeting minutes. The ECB will publish the account of Monetary Policy meeting minutes on Thursday at 11:30 GMT. We’ll end this week with one of the most anticipated events at 14:00 GMT as U.S. Fed Chair Powell Speaks about the future of US monetary policy.
Looking at the pair USD/CHF on a 4H TF, we see that the beginning of August was bearish momentum. USD has gained back some steam after last weeks better that expected retail sales which boosted some confidence. The price is currently just above the 38.2% Fibo at 0.97948. Chances are high that the Fed will indeed lower interest rates in September which will be bearish for the pair. There are other releases throughout the week that will have influence on the pair as well.
On Wednesday the 21st we’ll see US Home Sales report and Crude Oil Inventories at 14 and 14:30 GMT respectively. On Thursday the 22nd we’ll see the report on US Initial Jobless Claims and Manufacturing PMI at 12:30 and 13:45 GMT. And on Friday at the same time that Fed Chair Powell speaks at 14:00 GMT, new home sales will also be released from the US.
Technically, for the bulls our target areas are 0.98170 (50% Fibo) followed by 0.98540 (61.8% Fibo). A move to the downside would bring the price to 0.97340 (23.6% Fibo), followed by the lowest low of 2019 at 0.96598. A move lower can revisit the September 2018 area of support in the vicinity of 0.96345.