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EUR/USD braces for Yellen and Draghi at Jackson Hole

A combination of highly anticipated speeches from Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi at the Jackson Hole Symposium later this week has the potential to shake EUR/USD out of its recent trading range.


Since hitting a multi-year high just above the 1.1900 level in early August – a high not seen since early 2015 – EUR/USD has pulled back into a trading range bounded roughly between 1.1900 to the upside and 1.1700 to the downside. This trading range has come on the heels of an accelerated uptrend that pushed the currency pair up from its April lows above 1.0500 to the noted early-August high around 1.1900.

The Economic Symposium, hosted by the Kansas City Federal Reserve Bank in Jackson Hole, Wyoming, is scheduled to start on Thursday. Get the full story http://on.forex.com/2xt5hVR

NZD/USD drops to major support as kiwi extends correction

Against the New Zealand dollar, the US dollar has extended its strength, pressuring NZD/USD down to a major support area around 0.7200 as of Thursday.


Previously in a sustained rally from a low of 0.6816 in early May up to a two-year high of 0.7556 in late July, NZD/USD began a serious correction early this month after Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler suggested that the central bank is open to possible currency intervention in order to cap the New Zealand dollar’s strength.

Get the full story http://on.forex.com/2w8yTby

Yellen’s policy silence pressures dollar and supports gold

The heavily anticipated speech by Federal Reserve Chair Janet Yellen in Jackson Hole on Friday disappointed Fed-watchers who were hoping for a glimpse into possible monetary policy moves on the horizon.


As the dollar fell against all of its major counterparts – most notably against the euro, which was trading in anticipation of a speech by European Central Bank President Mario Draghi in Jackson Hole later in the day – the price of gold surged back above its intra-range trend line after dipping below it earlier on Friday.

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North Korea tensions spark flight to quality

Risk-sensitive stocks have fallen sharply while perceived safe-haven gold, Japanese yen and Swiss franc have soared higher.


Sentiment has been hit above all by raised geopolitical concerns after North Korea fired what is thought to be a ballistic weapon over northern Japan in the early hours of Tuesday.

Get the full story http://on.forex.com/2vGzI9P

Dollar selling eases but pressure remains

At the weekend, Hurricane Harvey wreaked havoc in Texas and is set to dump more heavy rain in the coming days. If the economic costs of the hurricane turn out to be significant then the Fed may have to be even more patient in normalising monetary policy.


Also weighing on the dollar has been the sharp rise in risk aversion following North Korea’s launch of a missile over northern Japan overnight.

Get the full story http://on.forex.com/2iFZRV2

EUR/USD eases further as dollar extends rebound on stronger GDP, ADP

From being one of the strongest to one of the weakest currencies in space of two days. That’s right, the euro is actually falling for once. The single currency is partly lower because of the drop in the EUR/USD exchange rate as the dollar firms up across the board thanks to short covering and positive surprise in US data.


But with some euro crosses like the EUR/GBP also being lower, this suggests there’s actual internal weakness in the currency. Get the full story http://on.forex.com/2wjgniD

NFP Preview: Could US jobs data aid dollar rebound?

The official US monthly non-farm payrolls report will be released on Friday, September 1. Due to the fact that some of the key leading indicators will be released after the NFP, it is even more difficult to predict this month's headline figure with any reasonable degree of confidence. Still, judging by the only leading indicator we have had – the ADP private sector payrolls report, which came in better than expected on Wednesday – we may see a positive rather than a negative surprise compared to the consensus forecasts.


NFP Jobs Created and Potential USD Reaction

>210,000 Strongly Bullish
180,000-210,000 Moderately Bullish
150,000-180,000 Moderately Bearish
<150,000 Strongly Bearish

Get the full story http://on.forex.com/2eHXTPv

Thursday’s European Central Bank (ECB) policy decision and press conference will be watched closely for clues regarding the bank’s current stance on monetary policy, including its views on Eurozone inflation, interest rates, and potential tapering of the ECB’s massive quantitative easing (QE) program.


A key currency pair that should be impacted significantly by the tone of Thursday’s ECB decision will likely be EUR/JPY, especially given the recent resurgence of the Japanese yen on safe-haven demand amid heightened market risk factors.

Get the full story on http://on.forex.com/2j3e52q

Combined, heavy pressure on the dollar along with a yen that has remained solidly supported helped push USD/JPY down to a low right around the key 108.00 support level before rebounding.


This important level has served as both major support and resistance for the currency pair in the past, with the most recent instance occurring in mid-April, when USD/JPY bounced cleanly off 108.00 and subsequently rose sharply for the next several weeks.

Get the full story http://on.forex.com/2gLECwR

EUR/USD rally showing signs of exhaustion after dollar’s big slump


These types of candles point to exhaustion and with the RSI also in a state of negative divergence with price (as it has made a lower high near ‘overbought’ level of 70), one can make a case for a EUR/USD reversal here.

Get the full story http://on.forex.com/2wQqF8G

chart source: eSignal and FOREX.com

Gold drops as North Korea tensions subside – for now

Risk-sensitive assets created large gaps at the start of this week’s trading session in Asia overnight. Index futures gapped up before pushing higher which saw the Dow future gain more than 100 points.


In contrast, safe haven gold, which had hit a new 2017 high on Friday, found itself around $15 lower when trading got underway.

Get the full story http://on.forex.com/2jg8plT

chart source: eSignal and FOREX.com

AUD/USD rally at risk of pullback as US dollar bounces

Monday’s US dollar bounce off last week’s multi-year lows prompted several dollar-based currency pairs to buck their trends, at least on a short-term basis.


AUD/USD was no exception, as the pair pulled back further from last week’s failed test of the key 0.8100 level.

Get the full story http://on.forex.com/2xgG7Nz

GBP/CHF one to watch ahead of BoE, SNB

In the lead-up to the Bank of England and Swiss National Bank decisions scheduled for Thursday, sterling has been rallying for at least the past two weeks, and GBP/CHF has been boosted sharply by this run.



Get the full story http://on.forex.com/2h2tcsy

Next week features key decisions from both the US Federal Reserve (on Wednesday) and Bank of Japan (on Thursday).


In the run-up to next week’s central bank decisions, USD/JPY has been rising on a rebounding dollar and falling yen for most of this week. This rise has brought the currency pair up from last week’s spike below the key 108.00 support level up to its current position above the 110.00 level.

Get the full story http://on.forex.com/2yaiyUE

Gold loses out as US stocks hit new highs

North Korea launched another missile test earlier this morning and this was one of its furthest-reaching yet.


However, after an initial knee-jerk reaction, equities bounced back while gold weakened sharply.

Get the full story http://on.forex.com/2juGoqW

The USD/CAD rise has formed a tentative bear flag chart pattern within a strong downtrend that suggests a possible impending continuation of the longstanding bearish trend for the currency pair.


This bearish trend has been driven in large part by a surging Canadian dollar boosted by an increasingly hawkish Bank of Canada that unexpectedly raised interest rates earlier this month.

Get the full story http://on.forex.com/2xgRpkx

Gold breaks down ahead of key Fed decision

For more than a week, gold has dropped from its new one-year high above $1350 as the dollar has rebounded modestly, bets on a Fed rate hike by the end of this year have increased, and both risk aversion and market volatility remain at exceptional lows.


Much of gold’s short-term directional bias will hinge upon the upcoming FOMC policy decision on Wednesday.

Get the full story http://on.forex.com/2xhfTdt

Dollar could rally sharply on hawkish FOMC

In making their decisions, policymakers at the Fed are likely to take into account last month’s sharper-than-expected rise in CPI inflation, and weigh this against somewhat softer macro pointers elsewhere in the economy.


But with employment remaining healthy and inflation being so close to its target, the Fed may get the market ready for another rate rise in December and also provide a plan for balance sheet normalisation.

In other words, the Fed may be more hawkish than dovish at this meeting. Get the full story http://on.forex.com/2xmNzWZ

chart source: eSignal and FOREX.com

FOMC Recap – Hawkish-Leaning Fed Eases Dollar Pressure

The Federal Open Market Committee issued its interest rate decision, monetary policy statement, and economic projections, followed by a closely-watched press conference on Wednesday afternoon. As widely expected, the target range for the Fed Funds rate remained unchanged at 1.00%-1.25%.


However, aspects of the release, including the statement, dot plot, and economic projections, leaned distinctly towards a more hawkish stance, easing pressure on the US dollar and intensifying pressure on gold. Get the full story http://on.forex.com/2hk1QKS