Forex Today: Will Chair Powell…?

Pablo Piovano FXStreet

The US Dollar (USD) outperformed its peers on Thursday, gathering extra steam on the back of solid data releases and steady caution ahead of the critical speech by Chief Jerome Powell at the Jackson Hole Symposium on Friday. So far, consensus continues to favour a rate cut in September.

Here's what to watch on Friday, August 22:

The US Dollar Index (DXY) traded with marked gains on Thursday, retesting multi-day highs around 98.70 amid the resurgence of the upside impulse in US yields across the curve and firmer data. The speech by Powell at the Jackson Hole event will take centre stage as investors continue to assess the Fed’s potential rate path in the latter part of the year.

EUR/USD navigated on the defensive and approached the 1.1600 neighbourhood, always against the backdrop of a generalised prudent stance in the FX galaxy. The final Q2 GDP Growth Rate in Germany is due, seconded by the ECB’s Negotiated Wage Growth and the Consumer Inflation Expectations survey.

GBP/USD added to its ongoing weakness, coming close to the key contention area around 1.3400 the figure. The GfK Consumer Confidence gauge will be the only data release across the Channel.

Further choppiness saw USD/JPY set aside two daily drops in a row and surpass the key 148.00 barrier amid strong gains. The key Inflation Rate will be the salient event on the domestic docket.

AUD/USD weakened further and approached the 0.6400 support zone, or two-month troughs. Next on tap in Oz will be the publication of the RBA Minutes on August 26.

Prices of the barrel of WTI could not sustain the initial move to weekly highs near $63.50, eventually succumbing to the selling pressure despite signs of stronger demand in the US and steady uncertainty on the geopolitical front.

Gold prices managed to clock three-day highs just above $3,350 per troy ounce, although that move fizzled out afterwards, leaving the precious metal with marginal losses for the day. Silver prices added to Wednesday’s recovery and advanced to two-day peaks just above the $38.00 mark per ounce.

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Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1870 during the Asian hours on Friday. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming steady momentum. RSI has eased but remains above 50, indicating momentum remains constructive for the bulls.

GBP/USD consolidates around 1.3600 vs. USD; looks to US CPI for fresh impetus

The GBP/USD pair remains on the defensive through the Asian session on Friday, though it lacks bearish conviction and holds above the 1.3600 mark as traders await the release of the US consumer inflation figures before placing directional bets.

Gold recovers swiftly from weekly low, climbs back closer to $5,000 ahead of US CPI

Gold regains positive traction during the Asian session on Friday and recovers a part of the previous day's heavy losses to the $4,878-4,877 region, or the weekly low. The commodity has now moved back closer to the $5,000 psychological mark as traders keenly await the release of the US consumer inflation figures for more cues about the Federal Reserve's policy path.