FX market this week: Central Bank monetary policy meetings (FOMC, RBA, and ECB), Italian confidence vote, and Jackson hole among top-tier events to keep forex traders busy. Data wise EA PMIs are the only data driver for the common currency euro.

The market will continue to focus on the US-China headlines, the latest development on Brexit and tense situation in Hongkong.

Review: Last week the relief came on the JPY crosses after the US tariff delayed were short-lived. Moreover, the inversion of the 2Y10Y US yield curves flashed recession signals and weighed on the equities and commodities.

Looking forward (ahead of the top-tier events), our focus remains on the JPY crosses, especially AUDJPY and USDJPY.

These two crosses seem to be oversold, indicating a somewhat limited downside for the time being and the range remains between 70.40-73.00 and 105.00-107.20 respectively while a close above the higher end of the range could open the door for a move to 74.00 and 108.50 respectively. These bullish targets are coming as a bounce, not a rally.

Will the bounce last -long is the crucial question? We sense that current positive sentiment is not a permanent game-changer unless we get a clear picture of the trade war.

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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