September Fed rate hike odds have increased after Warsh's speech, with upcoming jobs and inflation data set to guide the US dollar and EUR/USD.
The Euro-Dollar has dropped to 1.158 after Warsh revived Fed hike bets, but Rabobank still sees choppy trade giving way to 1.18 into spring. The Euro to Dollar (EUR/USD) exchange rate ended Friday at 1.1582 after Kevin Warsh's Jackson Hole speech triggered the Dollar's strongest daily advance in more than two months.
USD/JPY is heading into the weekly close above the 160.00 handle and this begs the question as to whether we'll see a response from either the BoJ and/or the US Treasury Department next week.
EUR/USD is extending its pullback after the recent recovery stalled at a major resistance zone. The decline accelerated today on the heels of Fed Chair Warsh's remarks at the Jackson Hole World Economic Symposium with Euro now poised to mark the largest single-day loss since June.
EUR/USD Weekly Forecast: US rate hike back on the table, US Dollar up
The Euro held below the resistance of 1.1710 and dropped further to close from target and support at 1.1570. This support zone of 1.1570 could keep the advance scenario ongoing over the market.
For much of this week, the EUR/USD has been edging lower with the US dollar regaining some ground after last week's sell-off that was triggered, in part, by the bond market worries. Investors have been unwilling to bet further against the US dollar so far this week ahead of Kevin Warsh's keynote speech at the Jackson Hole summit, due later today.
EURUSD moving lower The euro(EURUSD) remains under pressure as the pair slides away from the 1.1700 level. The dollar has moved over 50 pips from the beginning of the week as all eyes are now on the Jackson Hole Symposium.
Euro: Range phase caps recent advance against US Dollar – UOB
Gold rejected at 4,700, EUR/USD corrects, GBP/USD stays bullish [Video]
Euro: ECB hike view supports range against US Dollar - Danske Bank
The dollar approaches a key breakout level as traders await Warsh, while EUR/USD tests Fibonacci support and GBP/USD loses channel support.