Many events on Monday, a busy day at the start of the week ~ October 1 strategy, focal points, and event schedule ~

◎ Current Positions and Strategy

EUR/USD Short position is held.On the daily chart, it looks like a range market between 1.1800 and 1.1500. Key levels to watch for potential rebounds are 1.1580 and 1.1500. On the intraday chart, I believe the corrective point for this decline is around 1.1655. If we break above this level, I am considering closing the position. Also, I will pay attention to statements related to Italian long-term interest rates and the budget.

EUR/USD Daily Chart

EUR/USD Intraday Chart

CAD/JPY Long position is held. Following strong GDP results last week, CAD/JPY has risen. On the daily chart, it has broken above the upward parallel channel. A pullback is possible in the short term, but I am basically holding due to fundamentals being strong. However, if NAFTA exits, it could weigh on the Canadian dollar. If negotiations continue, I will hold; if withdrawal (negotiations collapse) occurs, I intend to close the position.

CAD/JPY Daily Chart

CAD/JPY Intraday Chart

Additionally, I am watching the pound. If the UK Conservative Party Conference leads to turmoil, or if Prime Minister May resigns, I would consider short-term pound selling. Also, as U.S. interest rates rise, high-yield currencies like the Australian dollar and New Zealand dollar tend to be sold. In particular, the AUD, which is affected by US-China trade tensions, will be watched with a selling bias.

◎ Today’s Points of Focus

1)Italy Budget and Euro Decline

Last weekend, Italy’s next year budget was announced. The larger-than-expected deficit raised fiscal concerns, and Italy’s long-term yields surged. Concerns about Italy’s finances are causing the euro to fall. Will the decline continue? The euro level is at a point of attention.

Additionally, today PMI data for manufacturing across euro area countries will be released. Manufacturing PMI is watched as a leading indicator of the economy.

↓↓↓ For Italy’s fiscal issues, please refer to the following ↓↓↓

Italy’s fiscal crisis? Explaining Italy’s budget and euro decline!!

2)Many Important U.S. Indicators at the Start of the Month

The U.S. rate hike was made last week, and this week many key indicators follow. USD/JPY initially fell after the FOMC hike but then reversed to make new highs for the year. Today is ISM Manufacturing, and this weekend is employment data. Also, given the rate hike at the FOMC, be mindful of remarks from key figures. While keeping an eye on December timing, attention is also on the number of rate hikes next year. It may be time to start paying attention to statements from officials who will have voting rights next year. The FOMC voting members list is attached at the bottom of the article.

↓↓↓ For the recent FOMC, please also refer to the following ↓↓↓

Policy rate hike of 0.25% explained, FOMC!

3)UK Conservative Party Conference

Since yesterday, September 30, the UK Conservative Party Conference has been ongoing. Unlike Japan, party conferences are highly significant in the UK. Ahead of the conference, Prime Minister May’s support has fallen. At the last EU summit, European leaders rejected Brexit proposals, leaving the UK isolated. Within the Conservative Party, hardliners who oppose May’s Brexit plan may propose alternative options. There is also concern about a possible vote to oust May or a dissolution election. Monitor UK political headlines closely.

↓↓↓ For May’s Brexit plan and EU summit, please refer to the following ↓↓↓

May’s Brexit showdown!! Firm statements on Brexit negotiations!!

4)Canadian Dollar and NAFTA Renegotiations

Last weekend, September 28, there were statements that results would come within 48 hours! In local time, a result could be announced today. If Canada exits NAFTA, the Canadian dollar could face downward pressure. After last week’s strong GDP, the CAD’s rise could reverse if withdrawal occurs. This is a key area to watch.

◎ Today’s Economic Indicators Schedule

10/1 (Monday)

UK Conservative Party Conference

07:30 AUD Manufacturing PMI
15:30 SEK Manufacturing PMI
16:45 EUR Italy Manufacturing PMI
16:50 EUR France Manufacturing PMI
16:55 EUR Germany Manufacturing PMI
17:00 EUR Eurozone Manufacturing PMI
17:30 GBPUK Manufacturing PMI
18:00 EUR Eurozone Unemployment Rate
22:00 USDBoştisic Atlanta Fed President Speech
22:45 USD US Manufacturing PMI
23:00 USDISM Manufacturing Index
23:50 GBPTenreiro external BoE Board Member Speech

10/2 (Tuesday)

UK Conservative Party Conference

00:00 USD Kashkari - Minneapolis Fed President Speech
01:15 USDRosengren - Boston Fed President Speech