Forex FOREX PRO WEEKLY, August 14 - 18, 2023

[Sive Morten]

Sive, There is a lot of talk about the BRICS meeting next week [22 August] and that Saudi Arabia has applied to join the group. It is probable that Saudi Arabia will then break the petrodollar agreement with America and sell its oil in currencies other than dollars…it will be a MASSIVE blow to America and could be what leads to the dollar losing its reign as the global reserve currency of the world and creating a massive profit opportunity in the currency markets. If this takes place, what do you think will happen to the price of GB/US - EU/US - and Gold?

Well, in general, yes, expectations are high from this meeting. But all these processes are going to be slow. Nobody will make drastic moves. S. Arabia already is selling oil in Chinese RMB, selling US Treasuries. The process is already underway. But adoption of new currency is a long-term run. I expect, that they could make an official announcement of Agreement and intention to create it, but hardly it appears this year.

But, in general you're right - the process underway. US leaving Eastern EU, closing liberal programme and the same should happen soon in Middle East. They just need to invent some legal background, how to perform this in media.

 

[Sive Morten]

Morning guys,

So, EUR turns to wobbling action around daily support, coming to weekend. Our view mostly is the same - it makes sense to think about result booking. US yields rally is also taking a pause, so hardly today we get something interesting.

The only thing to watch is coming CPI report in EU. On some volatility, EUR could try to touch 1.0845 target, but in general, this is minor issue:

On 1H chart, EUR hits 1.27 butterfly extension. But we do not have any plunge to this target, so downside continuation today is not obvious.

So, let's watch for CPI, and if you still have shorts - control the risk. I would consider new short position after some pullback, next week probably. Still no longs.