All eyes on Powell at Jackson Hole

The USD gained a bit against a number of its counterparts yesterday, yet the overall picture of a sideways movement seems to remain as the marker turns its attention towards Powell’s speech at the Jackson Hole symposium. It should be noted that a number of Fed policymakers in the past weeks had made calls to start tapering the Fed’s QE program rather earlier than later, yet the overall slowdown of the US economic recovery and the risks posed by the Delta variant of Covid 19 may suggest a postponement. Dallas Fed President Kaplan yesterday stated that he worries about inflation and that he would like to see a tapering of the bond purchases in September and a rate hike in the coming year, boosting expectations for a tightening of the Fed’s monetary policy. Earlier on, Kansas Fed President Esther George and St. Louis Fed President James Bullard also downplayed the possible adverse impact of the Delta variant and urged also for an earlier tapering of the bank’s QE program. The remarks from Fed Policymakers prementioned tended to act as a prelude for Powell’s speech and were the ones providing support for the USD despite the US GDP 2nd estimate growth rate for Q2 not accelerating as much as expected. Analysts are mentioned to expect Powell to announce the start of the bank’s tapering plans in the last quarter of the year, providing a signal for a tightening of the bank’s monetary policy ahead of the September meeting yet should the Fed Chairman opt to prolong the ultra-loose monetary policy we may see the USD weakening. US stocks dropped yesterday as markets tended to be cautious ahead of Powell’s speech, given also that the US weekly initial jobless claims figure came out higher than expected implying a slack in the US employment market. At the same time the price of gold rose on today’s Asian session despite the strengthening of the USD, as geopolitical tensions were on the rise also due to the bombing attack on Kabul’s, Afghanistan, airport given that the US are leaving the country by the end of the month. As for financial releases we note the release of the US consumption and the core PCE price index both being for July as well as the final reading of August’s University of Michigan consumer confidence.

The USD index rose a bit yesterday, yet the overall sideways movement between the 93.20 (R1) resistance line and the 92.75 (S1) support line seems to be remain unaffected. We tend to maintain our bias for a sideways movement currently, given also that the RSI indicator below our 4-hour chart is running along the reading of 50, implying a rather indecisive market ahead of Fed Chairman Powell’s speech, which could alter the index’s direction. Should the bulls take over, we may see the USD Index breaking the 93.20 (R1) resistance line and aim for the 93.65 (R1) resistance level. Should the bears be in charge of the index’s direction, we may see the USD breaking the 92.75 (S1) support line and aim for the 92.30 (S2) support level.

Gold’s price seems to be guided by some bullish tendencies as they are currently testing the 1800 (R1) psychological resistance level. We see the case for the bulls to maintain the initiative currently, given also the upward slope of the RSI indicator below our 4-hour chart and the fact that the reading is aiming of the reading of 70. Should buyers continue to control golds’ direction we may see precious metals’ price action finally breaking the 1800 (R1) resistance line and take aim of the 1835 (R2) resistance level. Should the market say enough is enough and a selling interest be displayed, we may see gold’s prices reversing course and aim if not break the 1760 (S1) support line and thus opening the way for the 1725 (S2) support level.

금일 주요 일정

Today in the American session, we get from the US the Consumption rate and the Core PCE Price Index, both being for July and later on we get the final University of Michigan consumer sentiment for August, while oil traders may be more interested in the release of the US Baker Hughes oil rig count, given also that a storm seems to be threatening the Gulf of Mexico.

USD 인덱스 4시간 차트