The EURUSD pair is facing a fresh cycle high because of the substantial decrease in the USD value, thanks to comments by Federal Reserve Chair Powell at the Jackson Hole Symposium. traders and investors are now focusing on monitoring financial indicators and global economic trends.
Powell took a mildly dovish stance at the Symposium, entertaining the thought of a 50 basis points reduction at the coming September meeting. This has resulted in speculations of a reduction, leading to a potential decrease in treasury yields value. Consequently, the Euro’s strength against the USD is likely to increase significantly.
The European Central Bank (ECB) is anticipated to execute at least two more rate cuts before 2022. While these cuts could lead to economic growth by encouraging investment and consumption, there is also a risk of increased inflation, potentially leading to more expensive imported goods. The market is exhibiting volatility and cautious trading due to the uncertainty surrounding these speculated rate cuts.
The Daily Time Frame analysis Indicates an upward movement of the EURUSD beyond the 1.1136 mark, suggesting a potential surge to a new cycle high at the 1.13 level.
Powell’s comments elevate EURUSD pair
Traders are encouraged to keep an eye on any fluctuations near these key levels, as significant market shifts might occur.
As revealed by the 4-hour Time Frame, a strong support region exists near the 1.11 level. If prices descend into this area, projections of a rally to the 1.13 level might increase. However, traders are advised to manage risk through a stop-loss near the 1.10 level in case of a downward trend.
Following Powell’s dovish statement, the price changes in the 1-hour Time Frame have been unpredictable. Events that could possibly influence the EURUSD pair are the release of the US Jobless Claims data and the US PCE report at the week’s end. Traders are advised to follow these developments closely and adjust their strategies accordingly.
In conclusion, the dynamics of the market in the following week are expected to be greatly influenced by both economic data releases and the broader macroeconomic narrative. Investors are encouraged to stay updated with geopolitical news that may have a significant impact on market performance.
