- EUR/USD fell by 0.4% last week as dollar few bids after Fed minutes.
- The pair has ended an eight-week winning trend.
- The next big move hinges on Powell’s speech at Jackson Hole Symposium.
EUR/USD’s uptrend looks to have stalled ahead of this week’s Jackson Hole Symposium where Federal Reserve’s (Fed) President Jerome Powell will deliver a speech on the central bank’s long-awaited monetary policy framework review, which focuses on inflation.
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EUR/USD Price Analysis: Downward momentum strengthening
Pair fell by 0.4% last week
The Fed minutes released last Wednesday remained silent on yield curve control, disappointing dollar bears and allowing an oversold bounce in the greenback. As such, EUR/USD ended the week with a 0.4% loss, ending an eight-week winning run.
On the daily chart, the pair carved out a bearish engulfing candle on Friday, validating the bearish divergence of the 14-day relative strength index confirmed on Wednesday. The daily chart indicators, too, are reporting a short-term bearish reversal.
Focus on Jackson Hold Symposium
The Symposium will be held virtually and streamed live on August 27 at 9:10 am EST according to Bloomberg News.
The Fed cut rates to record lows and launched unprecedented stimulus programs earlier this year to counter the coronavirus-induced slowdown. And while the central bank remains ready to do more, it has time and again ruled out negative rates and yield curve control.
That leaves the bank with two options – boost bond purchases and/or signal higher tolerance for inflation. In other words, the bank would then keep rates low even with above-2% (target) inflation.
Investors, therefore, will watch Powell’s speech for clues regarding the next possible move. The dollar will likely take a beating if Powell signals growing consensus regarding the need for greater tolerance for high inflation.
Apart from Powell’s speech, the pair may be influenced by the US core PCE Deflator, Personal Spending and Personal Income numbers scheduled for release on Friday.
As for Monday, the European and US data docket is thin. As such, the pair is at the mercy of the broader market sentiment. The S&P 500 futures reached record highs during the Asian trading hours and the risk-on may weigh over the US dollar, restricting losses in EUR/USD.
Technical levels
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