Ahead of the annual highlight of the Jackson Hole symposium which begins today, the US dollar is seen to have already started to move ahead with the strengthening of value exhibited at yesterday’s New York session.
Dallas Federal Reserve (Fed) President Robert Kaplan in his latest statement expects the Fed to start raising interest rates next year.
Analysts took his statement as a hawkish signal compared to his opinion last week which was more cautious following concerns over the potential impact of the Covid-19 variant of the Delta.
So did the Fed President for the Kansas City and St. Louis branches. Louis who also changed his more inclined stance toward policy tightening with a proposal for a $ 120 billion reduction in monthly bond purchases.
Examining the price movement on the chart of the EUR/USD currency pair, the bullish pattern failed to be maintained. And in Thursday’s trading yesterday, relatively flat prices began to show early signs of a decline.
In yesterday’s New York session, prices displayed a decline after gains in the previous European session hit a daily low yesterday around 1.17450 after the United States (US) second quarter GDP growth data was published.
But the strengthening of the US dollar was seen to be driven by market reaction to Robert Kaplan's comments on central bank policy ahead of the annual Jackson Hole event.
The lower decline is expected to retest the 1.17000 level before a continued decline will test last week’s support level around 1.16700.
Still, investors are likely to see a price spike again following high expectations of Fed Chairman Jerome Powell's dovish statement.
The situation that will depreciate the US dollar will push the price up to the resistance level of 1.18000.
A higher rise in the price that passes the resistance will lead to the next target at the price zone of 1.19000.
