Yesterday was a transition day ahead of the holidays in the USA and Japan.
Investors will be looking at the possible unilateral declaration of independence from Catalonia and consequently the Spanish State response, with a clear impact on the stock market and Spanish debt as well as the euro.
USD lost ground despite the good data published last week (ISM, NfP and unemployment rate) in a more technical correction than a trend change that in the case of the EURUSD could take us over 1.18/1.1850
The polls in Japan continue supporting the current President Abe for the 22th elections. We continue to see an asymmetric risk in the election event, if the current status quo is maintained, the JPY would weaken, although not having a large majority the appreciation of the Japanese currency would be much more important, with the replacing of Kuroda (President of the BoJ) and probably modifying the current stimulus program.
Yesterday the modification of the last salary data, because of a computer error with wages up from 1.6% to 2.4% give support to the GBP. The market discounts near 80% probability for a rate increase in the November meeting and an additional for the whole year 2018, so there would be scope to allocate more rises next year with the consequent support to the GBP.
USDCNH (white/blue) vs EURUSD (orange, inverse). Really good inverse correlation because of the currency diversification from the Bank of China.
If USDCNH contiue the downtrend will give support to the EURUSD
Stop profit executed at 1.1750 in short EURUSD position, opened at 1.20
Note: This analysis is a personal opinion based on my experience, not a professional signal service. For trading, you must base your decisions on your own criteria
