EUR/USD is trading towards the upper end of the tight range that characterizes it towards the all-important Jackson Hole Symposium in which both heads of central banks give important speeches. How will EUR/USD look like after Yellen and Draghi take the stage? Is a dovish Yellen already priced in?
Update: Yellen provides no new message – USD stronger
Here is a quick update on what’s moving the pair.
- EUR/USD continued recovering and reached resistance at 1.3295. It began sliding in European trade.
- Current range: 1.3240 to 1.3295.
Further levels in both directions:
- Below: 1.3240, 1.32, 1.3104 and 1.30.
- Above: 1.3295, 1.3333, 1.3415, 1.3450 and 1.35
- The new low of 1.3240 provides support.
- 1.3295 is now stronger as resistance.
EUR/USD Fundamentals
- 14:00 Fed Chair Janet Yellen talks.
- 18:30 ECB president Mario Draghi talks
*All times are GMT.
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- All eyes on Jackson Hole: The speeches of Yellen and Draghi are basically the only events today, and they are big. Yellen will take center stage at prime time, and her speech will focus on the job market. Will she acknowledge the improvement and boost the dollar? Or will she express concern about the slack and hurt the greenback? This is the big question. Draghi speaks much later and the impact of his words may be seen only on Monday. He may surprise.
- Strong US data: All the figures released on Thursday beat expectations: existing home sales, jobless claims and the Philly Fed Index painted a brighter picture of the US economy. The optimism joins the not-too-dovish FOMC meeting minutes. However, after the post minutes rally, the dollar stalled and this may indicate fear of Yellen dovishness.
- Eurozone PMIs soften, but beat estimates: European PMIs were quite mixed, but they aren’t so good. It’s important to note that strong German PMIs in Q2 did not reflect the contraction that the country reported. So a weakening is even more worrying.
- Geopolitical conflicts could rattle markets: The Russian convoy entered Ukraine and this is causing a lot of suspicion. German Chancellor is visiting Kiev and some hope for a peace plan. The tensions between Russia and the West have already hit trade in the old continent. Mid East issues continue as well, but they have no impact on markets so far.
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