EUR/USD Forecast: Jackson Hole and US GDP
|Volumes have been extremely low across the financial world this week, with summer doldrums adding to the uncertainty surrounding the US Federal Reserve and the timing of the next rate hike. The EUR/USD pair has traded in a tight 100 pips range around the 1.1300 figure, unmotivated. Data released during the week, both shores of the Atlantic did little for the pair, although there has been a slight improvement in US figures, which revived hopes of a sooner rate hike.
This Friday, the US will release the second reading of the Q2 GDP figures, expected to match the advance reading released last month at 2.2%. If that is the case, the market will barely react to the news, and wait for Yellen's speech within Jackson Hole at 14:00 GMT. In fact, a small deviation in GDP figures may well see the pair holding flat ahead of her speech, as the market is still depending on a rate hike in the US to settle trends across the board.
A hawkish wording from the FED's head, can see the dollar advancing sharply across the board, with the EUR/USD plunging through 1.1245, the key support for today, and extending down to 1.1160/80. Uncertainty over a possible date in a move, will likely sent the dollar lower, although EUR gains will likely be limited compared to other currencies. Anyway, the pair can regain the 1.1300 region, and extend up to past week high of 1.1366.
Technically, and according to the 4 hours chart, the pair maintains the neutral stance seen for most of this week, but with a slightly imbalance towards the downside, as the price is unable to settle above a modestly bearish 20 SMA and indicators retreating partially from their mid-lines, unable to regain positive territory.
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