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.

AUD/USD consolidates gains above 0.700; focus on CPI data

AUD/USD has regained composure on Tuesday, reversing the previous day’s pullback and further extending its move past the key 0.7000 yardstick. The pair’s recovery has come despite another solid day for the Greenback ahead of the FOMC gathering. Moving forward, the release of inflation figures will be the main focus in Oz on Wednesday.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold holds above $4,000 as traders brace for Fed interest rate decision

Gold edges higher during American trading hours on Tuesday after trading in negative territory earlier in the day. A slight decline in Oil prices offers some relief, although a firmer USD limits the upside as traders await the Fed’s monetary policy announcement on Wednesday.

Australia CPI set to climb in September, fueling RBA rate-hike bets

The Australian Bureau of Statistics (ABS) will publish the September Consumer Price Index (CPI) on Wednesday at 00:30 GMT. The report is expected to show that inflation rose 4.2% from a year earlier, higher than the 4% posted in August. The monthly CPI is forecast at 0.7% following the 0.4% print from the previous month.

What can we expect from the RBNZ monetary policy decision?

On Wednesday, October 28 at 01:00 GMT, the Reserve Bank of New Zealand, led by Governor Anna Breman, is expected to raise the Overnight Cash Rate by 25 basis points, from 2.75% to 3%, as money markets price in a 100% chance. This would be the third-rate hike by the RBNZ, while the odds for another hike in December are nearly 50%.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.