Warsh's hawkish Jackson Hole remarks revive September Fed hike bets as DXY rebounds while EUR/USD and GBP/USD break key technical support.
Euro: Warsh speech weighs on EUR against US Dollar – Danske Bank
EUR/USD Price Forecast: Gains ground to near 1.1600, bullish vibe prevails above 100-day SMA
EUR/USD retreats from highs while key support holds firm
Looking at the 4-hour chart, the pair traded below a bullish trend line with support at 1.1655. There was a clear move below the 50% Fib retracement level of the upward move from the 1.1511 swing low to the 1.1710 high.
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.