- US dollar moves sideways on Thursday, DXY posts modest losses.
- Market participants await Powell’s speech on Friday.
- EUR/USD rejected above 1.0000, supported at 0.9950.
The EUR/USD is moving without a clear direction on Thursday in anticipation of a key speech by Jerome Powell at the Jackson Hole symposium. The pair failed to hold above parity and then pulled back, finding support above 0.9950.
The US dollar gained momentum after the release of US economic data. The second quarter GDP growth rate was revised up from -0.9% to -0.6%, and jobless claims decreased more than expected. US yields peaked after the reports and then fell back.
Despite the numbers, market participants await Powell’s speech on Friday. His words could provide clarity on the path of the Fed’s monetary policy. “We expect Powell to try to manage market expectations by keeping the Fed’s aggressive tone. Between now and the FOMC meeting on September 20-21, we will get all headline data from August and some of the surveys from early September, such as the preliminary S&P global PMI readings and the Fed’s regional surveys. The Fed will also then have a better idea of how the economy is doing in the third quarter.” , explain analysts at Brown Brothers Harriman.
As for the European Central Bank, the minutes of the last meeting showed that a “large number” of members agreed that raising interest rates by 50 basis points was appropriate. “The ECB is now in a fully data-driven mode, with the guidance chains of the past severed. Most Governing Council members are concerned about inflation risks, and large rate hikes will continue,” said Jan von Gerich, chief analyst at Nordea.
Unable to recover level 1,0000
EUR/USD shows no clear signs in the very short term. The euro continues to show weakness as it is unable to hold above 1.0000. A recovery above 1.0030 would add support to the Euro. On the other hand, immediate support lies at 0.9950. A drop below would expose the next barrier around 0.9900.
The main trend in EUR/USD remains down and the Euro continues to look vulnerable. It is on track for the second consecutive weekly drop and the lowest close since November 2002.
Technical levels
Source: Fx Street
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