Currency summary of the week. Central banks in the first place

The past week was mainly marked by meetings of the most influential central banks. Did they have a significant impact on exchange rates? Not necessarily. The market was prepared, and earlier expected with high probability, interest rate cuts at meetings of bank authorities. It was therefore difficult to see extreme situations on the charts, where excessive enthusiasm or panic would prevail. The subject of the CJEU judgment generated more reaction. With the mute of the topic of trade war, such information significantly weakened the zloty exchange rate against the world's leading currencies.

Last week, despite many meetings of Central Banks and publication of significant economic data, decidedly focused more on the situation on the oil market.

The zloty will lose

Virtually most analysts have titled their reports in this way after the announcement of the CJEU meeting (scheduled for October 3) in the Frankowicz case. It is highly probable that the judgment of the EU Tribunal will be detrimental to the banking sector. This means considerable losses, and what is more (cautious for now) about a potential crisis in the banking sector. You can read more in this article. In this, however, we will focus more on the EUR / PLN analysis.

EUR / PLN chart, H4 interval. Source: xNUMX XTB xStation

On the RSI (14), we see a movement at 70 for quite a long time. It does not have to be a sign of oversold, on the contrary - often such a situation generates a wrong signal from the standard assumptions. All pairs with gold look very similar. The first signal for a potential consolidation / test of the last supply move is a candle with a large upper shadow, near the support.

Brexit under control

Junker's interview last week raised the pound significantly.  The President of the European Commission argued that Brexit without a contract, it will be catastrophic and it is increasingly convinced that it will not happen. Not only the EU depends on getting the contract. Parliamentarians and British entrepreneurs increasingly feel the burden of potential no deal effects.

Chart GBP / USD, H4 interval. Source: xNUMX XTB xStation

For now, we are still in an upward trend, despite the fact that the dynamics of movement is much smaller. The key level is the 1.24539 price. On the wave of good news, the demand trend may still persist. Purely technical indicators do not indicate a reversal.

In addition to Junker, positive, fundamental reports have flowed from Great Britain. A spokesman for the British government confirmed on Thursday reports that a number of proposals were sent to Brussels to leave the EU. For now, these are not official proposals. They are to be taken seriously only after being referred to them by the European Union and the presentation of Community solutions, taking into account the initiatives submitted.

Japan is aiming too high

Often talking to traders about Central Bank of Japan there are theses about too big ambitions in matters of policy. Regarding this statement to current events, it can be seen that the country of cherry blossoms has not achieved the inflation target for a long time. Recent August publications of core inflation showed another decline. Significant regression and BoJ announcements concerning the direction of inflation towards 2% will not only pose a big economic challenge, but above all will lead to loosening of monetary policy. Let's go further, investors mainly playing yen will pay more attention to messages issued by the Central Bank.

Chart USD / JPY, D1 interval. Source: xNUMX XTB xStation

What is the current situation on USDJPY? Reviewing the general trend of the daily interval quite recently formed to us inside bar. What's more, a significant rebound from key support may slightly suggest a reversal.

What can you say about the dollar? Generalizing mixed policy very much Federal Reserve Contrary to appearances, it can have a positive impact on the dollar. Looking at this through the prism of the positive sentiment for the USD, its increasing appreciation is rather predicted. Are there any further interest rate cuts ahead? Here the sentences are already strongly divided. Considering the market median of expectations for rates, the reductions should end with the latter. Many members admit that they see the chance for at least one more such move and the lack of maneuvering in 2020.