September Is Coming, Volumes Are Back

By now, the market is just waiting for the news coming from the Federal Reserve to take a position for or against tapering. In fact, the winds of war blowing on Syria, and the crisis of some emerging countries, are bringing interest back towards the dollar, which is effectively closing the month of August with a bearish reversal figure known as a shooting star. As we can see from the chart, the body of the monthly candle is crushed towards the final part of the same candle with the long tail showing how the market has attempted an escape forward. Due to the strength of the bears, every bullish ambition has been turned off. So, we will enter short on EUR/USD at the beginning of September.

There are is a lot of data for the coming week. Most importantly the ISM manufacturing on September 3rd, and the unemployment on September 6th will be major catalysts. Also, the trade balance of September 4th, the Beige Book, and the ISM services on September 5th should be watched.


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WILL MRS MERKEL STILL LEAD GERMANY?
This is the recurring question that the markets are posing for the month of September. Meanwhile, the PMI manufacturing of September 2nd , the PMI services of September 4th, retail sales, and most importantly the ECB meeting on September 5th will represent the key events of the ninth month of the year.

INTEREST RATES IN AUSTRALIA, JAPAN AND CANADA
During this week, the three central banks of these important economies will have to decide on interest rates. No movement should come out of these meetings, but especially for Australia (03/09) and Japan (05/09) it will be interesting to see the statement that will be announced. For the two currencies, JPY and AUD, the respectively best and worst month of the year, August, has come to an end and this could lead to a technical rebound especially for the Aussie that is struggling with an excessive negative sentiment ever seen in recent history. We have to remember that elections will be held for the new parliament in Australia on September 6th.

TRADE OF THE WEEK
August has been one of the worst months for emerging currencies, which in fact did not contradict this tested seasonality. Many emerging currencies are in trouble, especially the Indian rupee and the Turkish lira. The Turkish lira, in particular, has touched the upper part of the long-term bullish channel that could lead us to believe there is an excess of the market that may soon be reduced. In this sense, we take comfort in the weekly closure with a typical reversal figure, the shooting star. As we can see from the chart, the market has gone beyond 2.76 and then has closed the week below 2.70, a strong return signal for the buyers of try. Considering the negative end of the season, we would try a short, target 2.58/2.60.


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