The Jackson Hole Symposium is awaited this Friday
Despite the fact that there are a lot of fundamentals over the next few days, their market impact might not be significant. All eyes are headed towards the Jackson Hole Symposium on Friday and Saturday, and it may hold key remarks from Federal Reserve Chair Powell and ECB President Lagarde.
DXY upside retracement could be over
The US Dollar index rallied for five consecutive weeks, reaching as high as the 103.65 key resistance area. However, it was unable to break that resistance for the past four trading days, which might be the first sign that the upside retracement is over. In addition, the RSI indicator has stalled back to 60. In the meantime, the risk of shorting the US dollar might be much lower than buying it at the current level. The bearish outlook remains intact as long as the index continues to trade below the 103.65 key resistance.
US 10-year at key resistance again
The US 10-year yield advanced to its highest level since 2007, while the 30-year yield reached its highest level since 2011, which continues to be a concerning level for US equities. It shows that investors are still concerned about inflation and growth, despite the recent progress.
However, this might all change once the Federal Reserve confirms that the raising rates era is over. Such confirmation might come later this week from the Federal Reserve’s Chair Powell during the Jackson Hole Symposium. Such a confirmation might be the catalyst for the next move not only in bond yields but also in equities and currencies.
GBPUSD bullish signal
The British Pound ended its four-week declining stake after it managed to stabilize last week, holding above the 1.2625 support area, while the daily chart started to show new bullish signals. Over the next two weeks, the interest might be shifted to a gradual positioning with a stop below the 1.2625 support area, while the next leg higher could be targeting 1.30 as an initial target followed by 1.3145.
EURUSD needs confirmation
The Euro showed more weakness compared to the British Pound as it continued to decline for five consecutive weeks. Seasonality for the past 10 years suggested the opposite. Usually, the British Pound is weaker in August against the Euro. In the meantime, the Euro managed to hold above its 1.0850 support area, but it needs another push over 1.0935 to confirm the continuation of its uptrend. Therefore, we will be watching for a possible positioning in the coming days.
Gold needs another push
Gold closed last week’s trading below $1900, which is the first weekly close below that support since March, easing the bullish outlook. However, Gold managed to hold above $1885 which is the retracement target and should be watched very carefully over the next few days. Gold needs another push to reclaim its $1900 to strengthen its bullish outlook once again. Otherwise, a failure to reclaim that resistance would lead to another leg lower, possibly towards $1870.
Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.
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