(News Bulletin 247) – Currency traders have been waiting for this day for several weeks. Today is the day that Jerome Powell’s speech is scheduled to take place in Jackson Hole, the central bankers’ meeting. Investors are waiting for a framework for the coming months regarding monetary policy. The markets estimate that the Fed will cut its rates three to four times by the end of the year. Two Federal Reserve officials said they thought it was appropriate for the US central bank to start lowering interest rates soon and that the pace of subsequent reductions should be “gradual” and “methodical”. However, yesterday’s service activity indicators, known as PMIs, indicate that the US economy is still strong and therefore potentially still in an overheating phase, which could temper the Fed’s initiatives. Traders are therefore waiting for the US central banker to speak at 4:00 p.m. French time, while at 2:30 p.m. investors will learn about building permits in the United States. Elsewhere in the currency market, the yen is in focus. Indeed, it was the source of the spike in volatility earlier this month following the unwinding of carry trade positions. The Japanese currency strengthened after government data showed a rise in inflation. Annual core inflation reached 2.7% in July, well above the BoJ’s 2% target.
Technical Section: The European currency is still bullish in the short term. Yesterday’s candlestick suggests a lateral consolidation anticipated for 2 days now. The euro will thus be able to wait for the ascending moving averages before resuming its bullish path. We will therefore be able to position ourselves at the 20-period daily moving average to enter the trend and target the 1.12 zone.
MEDIUM TERM FORECAST
Considering the key graphic factors that we have mentioned, our opinion is neutral in the medium term on the Euro Dollar (EURUSD) parity.
We will maintain this neutral opinion as long as the Euro Dollar (EURUSD) parity rates are positioned between the support at 1.1134 USD and the resistance at 1.1250 USD.
The News Bulletin 247 council
DAILY DATA CHART
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