EUR/USD: Bulls nervous ahead of Ifo, US data & Jackson Hole

Dhwani Mehta FXStreet

The EUR/USD pair kept its range-play intact near 1.18 handle in the Asian trades, with the trading range further narrowing down as we gradually progress towards the much-awaited Jackson Hole Symposium.

Agenda for Jackson Hole, when are Yellen and Draghi speaking?

A typical caution trading scenario persists so far this week, as investors remain wary over the next direction on both the EUR and USD and refrain from placing any big bets on EUR/USD, in the wake of rising expectations of a hawkish twist to be delivered by the Fed Chair Yellen and ECB President Draghi at the Jackson Hole event.

Markets believe that the EUR/USD pair could go as high as 1.2000, should Draghi hint on tapering plans announcement, while a sell-off towards 1.1550 levels cannot be ruled, if Yellen’s remarks tilt in favour of a Dec rate hike, besides a Sept QE spin-off.

In both cases, volatility is expected to remain very high and hence, markets are resorting to adjusting their positions now, leaving the spot wavering in a tight range.

Ahead of the Jackson Hole Symposium, the pair could find some impetus from the German Ifo surveys and US durable goods data, although reaction will be limited on the macro data releases, as the Kansas Fed Symposium is expected to be the main market moving event today.

EUR/USD Technical Set-up

According to Valeria Bednarik, Chief Analyst at FXStreet, “In the 4 hours chart, the price is a few pips above its 20 and 100 SMAs, both directionless and converging in a tight range, a clear reflection of the ongoing range, while the RSI indicator in the mentioned chart holds pat around 56. The Momentum indicator in the mentioned time frame aims higher within positive territory, but the pair would need to break above 1.1860 to actually gain upward traction, whilst bears will take the grip only on a break below the 1.1680/90 region. Support levels: 1.1770 1.1730 1.1685 Resistance levels: 1.1825 1.1860 1.1910."

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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