Global macro overview for 28/06/2017

Mario Draghi's speech at the opening of the central bank symposium yesterday was supposed to be quite subdued. Nevertheless, the ECB head surrendered to his optimism, which was conducive to the strengthening of the Euro. It is possible that similar moves will happen today, as heads of banks from Japan, Britain, and Canada will join Draghi.

The joint panel conference of four central bankers on ECB Forum on Central Banking in Sintra, Portugal is scheduled at 01:30 pm GMT. Except for ECB President Mario Draghi, to the panel discussion will join Mark Carney (Bank of England), Haruhiko Kuroda (Bank of Japan) and Stephen Poloz (Bank of Canada). It might be a time for Draghi to continue what he did yesterday. He announced a possible turn in monetary policy, which resulted in a definite strengthening of the Euro and a sell-off in European equity markets. Currently, global investors want to learn more details that can be presented at the discussion panel at the central bank symposium. Will Draghi elaborate a little more during his speech? Well, a joint discussion is a place for more general exchange of ideas, but the expectations of investors are so intense, that every word spoken there will be carefully analyzed. Moreover, it is rarely possible to meet the presidents of four large central banks in one place during a conference.

Any hints from any central banker, regarding a possible termination of QE by ECB or a possibility of an interest rate hike or more details regarding the turn in ECB monetary policy will make the common currency to appreciate again and new highs on various Euro-related pairs across the board can be made.

Let's now take a look at one of them, EUR/JPY on the H4 time frame. This pair is trading at 15th month's high around the level of 127.78, which is a 161%Fibo extension of the previous swing down. Nevertheless, despite the other bullish clues like trading above all the important moving averages, the visible bearish divergence between the price and the momentum indicator might suggest, it is a time for a pullback towards the next technical support at the level of 125.77.