Jackson Hole In Focus
Aside from the US Q3 advance GDP release, today also marks the start of the Jackson Hole symposium in the US, bringing central bankers from all over the globe together for the annual assessment and outlook meetings. While the big focus is of course on the Fed and whether Powell will give any tapering signals, there are other aspects to pay attention to which will also be important for markets. The obvious one is of course the COVID outlook and how the pandemic is expected to impact monetary policy and individual ( as well as the global economy over the coming year).
However, the market will also be paying close attention to EUR-centric information. EUR has been under heavy selling pressure recently following the dovish shift from the ECB as well as the growing fears over a fresh refugee crisis there. However, given that much of the current dovishness is priced in, there is room for a move higher in response to any optimism around the eurozone, especially since EUR short positioning has become so built up recently. Such conditions might be amplified if USD is seen lower in the wake of the event also, allowing room for a sharp move higher in EURUSD.
Technical Views
EURUSD
The recent sell off in EURUSD has seen price framed within the large falling wedge pattern. Price is now trading into the apex of the pattern and, with support at the 1.1703 level holding, and with big bullish divergence on both MACD and RSI, bullish reversal risks are growing here. If USD sells off from Jackson Hole bulls can look for a break above the 1.1840 to target 1.1961 initially.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.