There is no change in my technical view for the performance of the GBP/USD pair. 

• At the beginning of this week’s trading, and despite the holiday in Britain, the price of the GBP/USD currency pair fell to a stronger support level, towards 1.1648, its lowest since the height of the market crash in 2020. It settled around the 1.1700 level at the beginning of trading today, Tuesday.
• The US dollar is still the strongest against everyone with expectations of a strong raise of the US interest rates in the coming months to contain US inflation, which has reached its highest level in 40 years.
• The sterling faces strong expectations of a British economic recession and the uncertainty of the political future in the country to choose a new prime minister.

Federal Reserve Chairman Jerome Powell delivered a stark warning on Friday about the Fed’s determination to fight inflation by raising US interest rates further: it will likely cause pain to Americans in the form of a weak economy and job losses. The message arrived with a heavy blow to Wall Street markets, sending the Dow Jones Industrial Average down more than 1,000 points on the day.

“These are the unfortunate costs of lowering inflation,” said Powell in a high-profile speech at the Federal Reserve’s annual economic symposium in Jackson Hole.

Investors had been hoping for a signal from Powell that the Fed may adjust US interest rate hikes soon later this year if inflation shows more signs of abating. But the Fed chief indicated that time may not be soon, and stocks have fallen in response.

Runaway price hikes have left most Americans nervous about the economy, even as the unemployment rate has fallen to a half-century low of 3.5%. It also caused political risks for US President Joe Biden and congressional Democrats in the fall elections, as Republicans decried Biden’s $1.9 trillion financial support package, approved last year, as driving up inflation.

Some on Wall Street expect the US economy to fall into recession later this year or early next, after which they expect the Federal Reserve to reverse itself and cut interest rates. However, a few Federal Reserve officials have opposed this idea. Powell’s comments suggest that the Fed aims to raise the benchmark interest rate – to about 3.75% to 4% by next year – but not so high that the economy falters, hoping growth slows long enough to conquer high inflation.

GBP/USD Forecast:

There is no change in my technical view for the performance of the GBP/USD pair.  The general trend is still bearish and stability below the 1.2000 psychological support motivates the bears to move further down, amid clear ignoring the movement of the technical indicators on the daily chart to oversold levels.

There will be no chance for the sterling to recover for a while without sudden indications from the Bank of England, which is determined to raise interest rates with no fear of economic recession. According to the performance on the daily chart, breaking the resistance 1.2080 is important for the bulls to launch and change the direction, even for a short time.

On the downside, the general trend is the strongest so far, the closest support levels for the currency pair are 1.1640, 1.1580 and 1.1500, respectively. After returning from a British holiday, money supply figures, net lending to individuals and mortgage approvals will be announced. From the United States, the US consumer confidence and the number of job openings will be announced.

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I expect the USD/JPY currency pair to remain within its ascending channel range until the US job numbers are announced by the end of the week. 

A bullish price gap characterized the performance of the price of the USD/JPY at the beginning of this week’s trading. The currency pair moved towards the resistance level 139.00 before settling around the 138.70 level at the time of writing the analysis.

There is an opportunity to move towards the psychological resistance level of 140.00, where the strength factors of the US dollar against everyone are still strong. The US dollar gained strong impetus from the indications and confirmation of the US Federal Reserve governor that the bank is determined to increase US interest rates in a strong and continuous way. The announcement came amid weak bets that the US economy will enter a recession as many had expected before.

Powell said that the size of the Fed’s rate increase at its next meeting in late September – either half or three-quarters of a percentage point – will depend on inflation and jobs data. However, an increase in either size would exceed the traditional Fed-mandated increase by a quarter of a point, which reflects how severe inflation is. The Fed chair said that while the low inflation readings reported for July were “welcome”, adding that “the one-month improvement is much less than what (federal policy makers) will need to see before we can be confident that Inflation is moving down”.

Last Friday, the Fed’s inflation data showed that prices fell 0.1% from June to July. Although prices jumped 6.3% in July from 12 months earlier, that is down from 6.8% year-over-year in June, which was the highest since 1982. The drop largely reflected lower gas prices.

In his Friday speech, Powell noted that the history of high inflation in the 1970s, when the central bank sought to counter high inflation by raising interest rates intermittently, shows that the Fed must remain focused. He added that “the historical record strongly warns against cutting interest rates prematurely,” and that “we must continue to do so until the job is done.”

Of particular concern to Powell and other Fed officials is the potential for inflation to become entrenched, prompting consumers and businesses to change their behavior in ways that perpetuate high prices. If workers, for example, begin to demand higher wages to keep up with higher inflation, many employers will pass on higher labor costs to consumers in the form of higher prices. Many analysts are speculating that Fed officials would like to see lower monthly inflation readings for about six months, like July, before stopping the rate hike.

USD/JPY Forecast:

• I expect the USD/JPY currency pair to remain within its ascending channel range until the US job numbers are announced by the end of the week.
• Amid the continuation of the bullish momentum, I do not rule out testing the 140.00 psychological resistance, the highest for the currency pair in 25 years.
• Including and among the highest of them is the event that you can think of concluding selling deals without risk and waiting for sales to take profits, which may occur at any time.

On the downside, it broke the support 136.00, a first breach of the current ascending channel, and it is not considered a change in direction without breaking the 132.90 level. Today, the US Consumer Confidence and the number of US job vacancies will be announced.

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Gold prices are headed for a fifth monthly decline, the longest stretch in four years, after the Federal Reserve raised interest rates, weakening the allure of the non-interest-bearing metal. 

Gold prices are headed for a fifth monthly decline, the longest stretch in four years. This happened after the Federal Reserve raised interest rates, weakening the allure of the non-interest-bearing metal. The strong dollar also affected gold, which is priced in the US currency. The two-year Treasury yield has reached its highest level since 2007.

“Restoring price stability is likely to require maintaining a restrained political position for some time,” Said the US Federal Reserve Governor Powell Friday, in remarks at the Federal Reserve’s annual policy forum in Jackson Hole, “Historical record warns severely from the policy of premature mitigation,”  he added.

He reiterated that another “unusually large” increase in the benchmark lending rate may be appropriate when officials meet next month. However, he did not commit to one, saying the decision will depend on “the totality of incoming data and changing expectations.”

Commenting on the market performance, John Finney, director of business development at Sydney-based bullion dealer Guardian Gold Australia, said that “This has to be the most hawkish rhetoric from the Fed chair at some time.”

“Although gold is under pressure from the strength of the US dollar at the moment, if we see an increase in volatility in the US stock market, we can expect gold to receive a safe-haven bid,” he added.

Meanwhile, Senator Elizabeth Warren took aim at the Federal Reserve’s anti-inflation game plan on Sunday, saying she was concerned the central bank could push the US economy into recession.  The senator remarked that she did not believe an interest rate hike could contain current price pressures.

The DXY US dollar index rose to its highest level in 20 years, making gold priced in US dollars expensive for those holding other currencies.

Matt Simpson, chief market analyst at City Index, said gold’s momentum has shifted to the downside, and while there will be a safe haven influx at some point, investors are currently focused on keeping interest rates high.

Echoing the Fed’s position, ECB Governing Council member Isabel Schnabel said central banks must act aggressively to combat inflation, even if it drags their economies into recession. While gold is often considered a safe haven during financial uncertainties, it is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion while strengthening the dollar.

Gold Forecast:

According to gold experts. Gold is likely to head towards $1,700 and has room to go to $1,680. You can get some buyers stepping in around $1,680 to support the market and back to $1,750 again. Data from the US Commodity Futures Trading Commission showed that speculators reduced their net long positions in Comex gold by 15,910 contracts to 30,326 in the week

Today’s Gold Price Analysis:

The continued strength of the US dollar impedes any efforts and attempts for the gold price to recover. Therefore, it is expected that the downward pressure for the gold price will continue until the announcement of US job numbers, the main driver of the markets. Stronger readings would support the dollar and negatively affect gold and vice versa. Until then, it may test new buying levels, the strongest of which are currently 1716 dollars and 1675 dollars, respectively. Whatever the buying opportunity, we do not advise taking any risks.

On the upside, there will be no real change to the current trend without the gold price testing the psychological resistance level of $1800 an ounce.

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Even with the prospect of a big interest rate hike by the European Central Bank in September rising, the euro has struggled as the bloc’s energy crisis increases recession risks. 

Every time the price of the EUR/USD tries to rebound upwards, the negative impact factors remind investors that the euro will remain weak for a longer period of time.

At the beginning of this week’s trading, it tried to bounce upwards, but its gains did not exceed the level of 1.0030 and then returned to stability around the parity price again, before the announcement of the German inflation figures and the American consumer confidence reading.

At the beginning the week, the US dollar rose to the highest level in 20 years against the other major currencies after Federal Reserve Chairman Jerome Powell indicated that US interest rates will remain high for a longer period of time to reduce rising inflation. Accordingly, the US dollar index DXY, the measure of the US currency against a basket of major currencies, rose to the highest level of 109.48 in two decades.

On the other hand, the euro remained weak near its lowest level in 20 years, even with the tough statements of the European Central Bank, which strengthened the expectations of an interest rate hike in September.

At the end of last week, Powell told the central banking conference in Jackson Hole, Wyoming, that the Federal Reserve will raise US interest rates as high as needed to restrain growth and will keep them there “for some time” to lower the 2% inflation target, which is more than three times the Fed’s rates.

“Powell’s comments supported pricing a higher rate on federal funds for a longer period of time,” said Kenneth Brooks, a currency analyst at Societe Generale Bank, “the assumption that the Fed will start cutting interest rates in mid-2023 is premature,” he added.

The capital markets responded by intensifying bets for a sharper hike in US interest rates in September, with the probability of a 75 basis point hike currently at around 70%. Accordingly, US Treasury bond yields rose, with two-year bond yields reaching their highest level in 15 years at around 3.49%, which strengthened the US dollar. In his speech at the Jackson Hole Symposium, European Central Bank Board Member Isabelle Schnabel, French Central Bank President Francois Villeroy de Gallo and Latvia’s Central Bank Governor Martins Kazak all called for strong or important political actions.

Even with the prospect of a big interest rate hike by the European Central Bank in September rising, the euro has struggled as the bloc’s energy crisis increases recession risks. It is expected that the giant Russian energy company Gazprom will stop natural gas supplies to Europe from August 31 to September 2 due to maintenance.

Overall, the EUR/USD exchange rate has fallen significantly in 2022, and although factors such as the US economy and Fed policy have been an important driver of this decline, it is the rising cost of energy supply disruptions that gives most credence to bearish forecasters for some the other markets. Regarding the expected future for the Euro-Dollar, both “Rabobank” and “Nomura” expected a sustained break below the parity price in the Euro/Dollar rate during the coming months.

Expectations of the EUR/USD:

• The general trend of the EUR/USD currency pair is still downward and the stability below the parity price supports the bears’ control over the trend for a longer period of time.
• The continued concern about the future of energy in the Eurozone will stimulate the bears to further move down and therefore the appropriate support levels for the currency pair may currently be 0.9920 and 0.9845 and 0.9790 respectively.
• On today’s chart, the current performance pushed the technical indicators towards oversold levels.

On the upside and in the same period of time, breaking the 1.0200 resistance pair of the euro will be an opportunity to break the downward trend. Today the euro will react to the announcement of the German inflation figures and the dollar will react to the announcement of the American consumer confidence reading.

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The rising cost of European energy supplies has driven deep declines in many financial model-derived estimates of the single currency’s fair value this year, and with little respite on the horizon, some of the market’s most bearish forecasters are feeling upbeat about their EUR/USD outlook.

The EUR/USD will decline significantly in 2022. While factors such as the US economy and Fed policy have been a significant driver of this decline, it is the rising cost of energy supply disruptions that is giving most confidence to some other markets, which implies the eventual collapse of the euro.

The EUR/USD currency pair against the dollar EUR/USD fell last week to the 0.9900 support level, its lowest in 20 years, and in reaction to Jerome Powell’s statements, he tried to recover on Friday to the 1.0090 resistance, but he returned in his strongest downward path towards the 0.9964 support level and closed trading around it.

The euro gained a respite for most of the last week after falling below parity with the dollar during Monday’s session, but European gas prices remained at high levels after days of massive increases. These costs and their expected impact on companies and households alike is what prompts some forecasters to feel confident that the fall of the euro for more than 18 months may still have a long way to go.

The price of electricity in Germany will increase over the next year by more than 1000 US dollars in terms of Brent oil energy equivalent. This is far from normal, and so says Jordan Rochester, the expert at Nomura: “It is a crisis that does not only stem from the restricted energy supplies from Russia, but a series of unfortunate issues.”

In addition to energy constraints, the Eurozone faces the brunt of climate change with record-breaking flash floods and droughts, as well as slowing trade with China and the risk of a recession in the United States. However, we believe that the biggest challenge that Europe will face this winter is not inflation, but inflation accompanied by recession.

“This is why we expect the EUR/USD to drop to the 0.90 support this winter,” added Rochester.

European gas prices have more than doubled over the past week after the Russian gas monopoly said it would halt supplies through a key pipeline for three days in September, adding pressure on an already tight market. It is likely that the economic burdens created by these price increases will remain a headwind for the single European currency in the absence of credible supply-side responses from European countries to the ongoing Russian gas diplomacy.

“These incomprehensible price increases add pressure on European leaders to find a solution to the unfolding energy crisis that will put pressure on many families,” said Bas Van Giffen, chief economic analyst at Rabobank.

At the same time, American families are struggling to pay their utility bills. However, this situation pales in comparison to the rising prices faced by European consumers.

The rising cost of European energy supplies has driven deep declines in many financial model-derived estimates of the single currency’s fair value this year, and with little respite on the horizon, some of the market’s most bearish forecasters are feeling upbeat about their EUR/USD outlook.

Both Rabobank and Nomura have predicted a sustained break without parity in the EUR/USD rate over the coming months. According to their forecasts, the EUR/USD is likely to fall to 0.90 this winter with a terms of trade shock pointing to 1980s levels at 0.65 as a possibility.

Expectations of the EUR/USD:

• In the near term and according to the performance on the hourly chart, it seems that the EUR/USD currency pair is trading within the formation of an ascending channel.  This indicates a slight upward trend in the short term in market sentiment.
• Therefore, the bulls will target short-term profits at around 1.0039 or higher at 1.0083. On the other hand, bears will look to pounce on possible pullbacks around 0.9963, or lower at 0.9913.
• In the long term and according to the performance on today’s chart, it seems that the EUR/USD currency pair is trading within the formation of a descending channel. This points to a significant long-term downward wound in market sentiment.
• Therefore, bearish speculators will look to extend the current path of declines towards 0.9810 or lower to 0.9612. On the other hand, the bulls will target rebound profits at around 1.0182 or higher at the 1.03 level.

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In the near term and according to the performance on the hourly chart, it seems that the GBP/USD currency pair is trading within the formation of a weak ascending channel. 

The losses of the GBP/USD pair during last week’s trades were the strongest as they fell to the lowest support level of 1.1717 since the collapse of the markets at the height of the 2020 Corona epidemic.

At the end of the week, the pair tried to recover to the resistance area of ​​1.1900, but with Jerome Powell’s confirmation of moving forward in raising the American interest rate to contain the standard inflation in the United States, he brought more strong momentum to the American dollar and therefore the sterling dollar pair moved towards the support level of 1.1735 , closing around it.

The Pound Sterling quickly gave up its gains against the dollar after Federal Reserve Chairman Jerome Powell said businesses and households would face an increasing struggle as the bank will raise US interest rates further to lower US inflation. He said this in opening remarks at the Jackson Hole Symposium hosted by the Federal Reserve Bank in Kansas City.

“July’s increase in the target range was the second increase of 75 basis points in the largest number of meetings, and I said then that another large, unusual increase might be appropriate at our next meeting,” told Powell to a gathering of central bank governors

And much of the widely anticipated speech focused on three lessons for policymakers to draw from the Fed’s experience with inflation in the 1970s and 1980s, but not before Powell said continued increases in interest rates and the passage of time would be necessary to reduce inflation.

“The restoration of price stability will take some time and requires the strong use of our tools to achieve a better balance between supply and demand. Lowering inflation will likely require a sustained period of flat growth. Furthermore, it is very likely that there will be some decline in the labor market,” continued Powell, “While high interest rates, slow growth, and soft labor market conditions will lead to lower inflation, they will also cause some pain for families and businesses. These are the unfortunate costs of reducing inflation. But the failure to restore price stability will mean much more,” he added.

The  Federal Reserve chairman pointed to clear signs of a slowdown in the US economy in recent months, but was also clear that this was unlikely to sway the Fed from its view  that US interest rates needed to rise to the restrictive level and remain at approximately four percent for an extended period to bring inflation back to the 2 percent target.

“At some point, as the monetary policy stance tightens, it will likely become appropriate to slow down the rate of increases. And it is likely that restoring price stability will require maintaining a restrictive political stance for some time,” said Powell, “The latest individual forecasts from September showed that the average federal funds rate is slightly below 4 percent until the end of 2023. Participants will update their forecasts at the September meeting,” he added.

A wide range of American data in recent weeks has indicated that the economic slowdown in the first half is likely to extend into the third quarter, which could mean there is a risk of a third contraction in a row and the continuation of the “technical recession” in the United States. The S&P Global PMI recently indicated that the recession deepened in the manufacturing and services sectors in August, continuing to contradict the equivalent Institute for Supply Management survey message.

 “While recent economic data has been mixed, in my view, our economy continues to show strong fundamental strength,” continued Powell, “The labor market is particularly strong, but it is clearly unbalanced, as the demand for workers greatly exceeds the supply of available labor. And inflation exceeds 2 percent, and the high inflation continued to spread through the economy,” he added.

Expectations for the GPB/USD:

• In the near term and according to the performance on the hourly chart, it seems that the GBP/USD currency pair is trading within the formation of a weak ascending channel. This indicates a slight upward trend in the short term in market sentiment.
• Therefore, the bulls will look to ride the recent high towards 1.1900 or higher to 1.1945. On the other hand, the bearish speculators will target potential downside profits at around 1.1812 or lower at 1.1769.
• In the long term and according to the performance on the daily chart, it seems that the GBP/USD currency pair is trading within the formation of a descending channel. This points to a significant long-term downward wound in market sentiment.
• Therefore, the bearish speculators will look to extend the current lows towards 1.1725 or lower to 1.1516. On the other hand, the bulls will target long-term profits at around 1.2028 or higher at 1.2230.

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Markets acknowledged widespread signs that the US economy is slowing. This is despite a clear warning against assumptions that the Federal Reserve could push back on raising interest rates further or start cutting them at some point in the first months of the new year.

The trading week, in which the bulls dominated the direction of the USD/JPY pair, ended with gains, crossing the resistance level of 137.70 and closing stable around the resistance of 137.50.

This gave back to the markets the momentum for the possibility of moving towards the next psychological resistance of 140.00. The US dollar gained more momentum from the hawkishness that the Federal Reserve Bank of America representatives, led by Jerome Powell, signaled. They stated the bank is determined to raise American interest rates strongly until the American inflation, which has reached its highest level in 40 years, is contained.

Jerome Powell’s historic speech on Friday focused heavily on three key lessons for policymakers to draw from the Fed’s experience with inflation during the dark decades of the 1970s and 1980s, but he also offered a realistic assessment of the outlook for the U.S. economy as the bank tries to push inflation down from its highest levels in several decades.

“The restoration of price stability will take some time and requires the strong use of our tools to achieve a better balance between supply and demand. Lowering inflation will likely require a sustained period of flat growth. Furthermore, it is very likely that there will be some partial decline in the labor market,” said Powell, “While high interest rates, slow growth, and soft labor market conditions will lead to lower inflation, they will also cause some pain for households and businesses. And these are the unfortunate costs of reducing inflation. But the failure to restore price stability will mean much more,” he added.

Markets acknowledged widespread signs that the US economy is slowing. This is despite a clear warning against assumptions that the Federal Reserve could push back on raising interest rates further or start cutting them at some point in the first months of the new year.

The speech came as financial markets try to gauge whether federal policymakers will opt for a 0.75% sequential increase in the federal funds rate at the September meeting and amid much curiosity about how quickly the bank will raise borrowing costs to the “terminal” level during the following months.

June forecasts indicated the level was somewhere near the 4 percent handle and would likely be reached in the early months of 2023, but Chairman Powell reminded that those forecasts will be updated soon, and other federal policymakers have recently called for a steeper path.

In general, the gloomy economic outlook and the lingering upside risks regarding the path of the US interest rate in the future are some of the possible reasons why the initial dollar sales in the wake of Friday’s session did not last long, although not all observers share the same views.

Expectations of the USD/JPY:

• In the near term and according to the performance on the hourly chart, it appears that the USD / JPY currency pair has recently completed an upward breakout from the formation of a gently descending channel. This indicates the existence of a large upward wound in the short-term market sentiment.
• Therefore, the bulls will look forward to the extension of the current rise towards the resistance 137.91 or higher to the resistance 138.36. On the other hand, the bearish speculators will target short-term profits at around 137.07 or below at the 136.59 support.
• In the long term and according to the performance on the daily chart, it seems that the USD/JPY is trading within the formation of an ascending channel. This points to a large long-term upward wound in market sentiment.
• Therefore, the bulls will target the long-term profits at around 139.38 or higher at the 141.74 resistance. On the other hand, bears will look to pounce on profits at around 134.99 or lower at 132.52 support.

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• The EUR/USD rate remains stable under downward pressure below the parity rate though, there is little hope that even a significant hike in interest rates might rescue it.
•  The euro-dollar pair’s losses this week reached the support level of 0.9900, the lowest in 20 years, and it is settling around the 0.9970 level at the time of writing the analysis.
• The currency pair may remain stable around its losses until important and influential events, led by the announcement of the US economic growth rate today, and then the Jackson Hole symposium.

Rather than monetary policy, it is the interrelated threats of a recession and a Russian energy halt that are weighing on the single European currency – the euro -, according to analysts. Although traders are now preparing for a one-percentage point rate hike by October, such dynamics are difficult for the ECB to contend with, even if it uses the kind of massive moves in borrowing costs that the Federal Reserve recently enacted.

Investors are boosting the European Central Bank’s bets and are pricing in one point of the gains by October. “Price has not been in the driving seat in the forex markets, particularly in the last month – and it really is about the dynamics of global growth,” said Sam Ziv, FX analyst at JPMorgan Private Bank. They are not supportive of currencies when they are made to keep inflation expectations steady and hurt growth expectations at the same time.”

Borrowing Costs are Raised

Facing the fastest rate of inflation since the introduction of the euro, the European Central Bank raised borrowing costs for the first time in more than a decade last month, raising its deposit rate by half a point to 0%. As investors anticipate another move of this magnitude on Sept. 8, storm clouds are converging over the 19-nation eurozone economy, as the cost-of-living crisis and Russia’s invasion of Ukraine put pressure on households and businesses.

Business surveys released Tuesday by S&P Global showed activity contracting for a second month, with the pandemic rebounding in areas like tourism almost to a halt. Meanwhile, a weak euro, which hit a two-decade low against the dollar this week, is boosting inflation by making imports more expensive – a particular concern when most of the region’s inflation is driven by energy that is largely priced in dollars. The bleak background means that even an unprecedented three-quarters of a point rate hike will not beneficially boost the euro, according to Dirk Schumacher, economist at Natixis in Frankfurt.

Indeed, ECB Executive Board Member Fabio Panetta on Tuesday urged caution in planning next steps as the prospect of a downturn in the eurozone becomes more likely than ever. “If we had a big slowdown or even a recession, that would ease inflationary pressures,” he added at a panel discussion in Milan. However, colleague Isabel Schnabel acknowledged the negative impact of a weak currency on inflation expectations, telling Reuters that it is all the more important when the economy faces an energy price shock. Money markets priced a half-point increase next month and put odds of 20% at 75 basis points. Moreover, traders are betting 130 basis points to tighten by the end of the year, with the deposit rate eventually rising to 2% by September 2023.

Euro forecast against the dollar:

I still see that the EUR/USD may hold on to its recent losses until the reaction from the Jackson Hole symposium. It is clear that he is ignoring the results of the US economic data and focusing more heavily on that seminar. The general trend of the EUR/USD pair is still bearish and stability below the parity price will move the bears towards stronger support levels, the closest to them currently are 0.9920, 0.9855 and 0.9790, respectively.

On the upside and according to the performance on the daily chart, breaking the resistance 1.0200 will be important to breach the sharp bearish channel recently. Today, the euro will be affected by the announcement of the growth rate of the German economy, along with the reading of the Ifo index, and the US dollar will be affected by the announcement of the growth rate of the US economy and the number of jobless claims.

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Today there will be an important event to future recession watchers in light of the continued sharp tightening of the Fed’s policy. The US economic growth rate will be announced amid expectations of a slowdown. The USD/JPY currency pair is stable around the bullish rebound gains of 137.70, which increases expectations towards the psychological top of 140.00. The dollar/yen pair is stable around the 137.10 level at the time of writing the analysis.

Hawkish or Dovish?

Markets and investors will remain focused on Friday, when Federal Reserve Chairman Jerome Powell addresses an annual economic conference in Jackson Hole, Wyoming. This has been the place for market action rhetoric in the past, leading investors to hope that Powell will provide more clarity on a rate hike. Will it be hawkish, which is what investors call the bias towards aggressive rate increases? Or dovish, which is Wall Street’s talk of easier circumstances?

Analysts pointed to several variables that could change the Fed’s thinking ahead of its next rate policy meeting in September. They don’t think he wants to appear tough or pessimistic, maybe he wants to appear as a pigeon. They cautioned that the speech could be “nothing” with little to chew on, although the market may consider that positive given some expectations that Powell will appear hawkish.

Generally high interest rates slow down the economy in the hope of reducing inflation. But they also risk strangling the economy if they are aggressively made and drive down the prices of all kinds of investments.

Stock traders sitting still for now

Stock traders remained reluctant to make any huge bets ahead of Jerome Powell’s speech on Friday, which may provide clues to how optimistic the Federal Reserve is in the face of mounting economic challenges. These concerns did not actually go anywhere despite the controversial pivotal pacifist narrative which some have cited as one of the reasons for the short covering rebound from June lows.

Indeed, before the prestigious Jackson Hole event that Powell and global policy makers will attend, traders have had to absorb more hawkish talk. Minneapolis Fed President Neil Kashkari said late Tuesday that it was “very clear” that officials need to tighten up and get inflation under control again.

Economic reports were mixed at best, underscoring the delicate task that policy makers face in bringing down high inflation without triggering a recession. Wednesday’s data showed US pending home sales fell to the lowest level since the pandemic began. While orders from US factories for core capital goods have exceeded expectations, the picture may change in the coming months amid rising borrowing costs and uncertainty over the growth outlook.

Forecast of the dollar against the Japanese yen

• There is no change in my technical view of the performance of the USD/JPY currency pair, as the general trend is still bullish.
• I expect stability around its gains until the reaction from Jerome Powell’s statements during the Jackson Hole symposium to determine the future of raising US interest, the strength factor of the US dollar in the markets recently.
• The bulls’ destinations closest to the current performance are the resistance levels 137.85, 139.20 and 140.00, respectively.

On the downside, the support level 133.30 will be important to change the trend outlook. The currency pair will be affected today by the risk appetite of investors, as well as the reaction from the announcement of the US GDP growth rate and the number of weekly jobless claims.

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Spot natural gas prices (CFDS ON NATURAL GAS) stabilized at a decrease in the recent trading at the intraday levels, to record slight daily losses until the moment of writing this report, by -0.01%. It settled at the price of $9.279 per million British thermal units, after its decline during yesterday’s trading by -0.03%.

September gas futures contracts in Nymex settled at $9,330 per million British thermal units, an estimated increase of 13.7 cents from Tuesday’s close, while October futures contracts rose 14.5 cents to $9,300.

NGI’s Spot Gas National Avg. Spot gas prices fell in most areas of the US, even as hot weather continued on the West Coast by 31.0 cents to $8.935.

Prices stabilized after a volatile session on Tuesday when they hit $10 per million British thermal units for the first time since 2008, before pulling back on news of a delay in the Freeport LNG plant’s return to operation, which will continue to affect demand by hurting the ability to Sending fuel abroad.

The US Energy Information Administration (EIA) is set to provide its weekly update on domestic inventories later Thursday, with the market anticipating above-average storage that may ease some concerns.

Natural Gas Technical Outlook

• The price is trying to gain positive momentum that might help it breach the pivotal resistance level 9.600.
• The resistance caused the price to rebound from its recent highs.
• It is trying to drain some of its clear overbought by the relative strength indicators, especially with the influx of negative signals from them.

All of this comes in light of the dominance of the main bullish trend over the medium and short term along with major and minor slope lines, as shown in the attached chart for a (daily) period, with the positive pressure continuing to trade above its simple moving average for the previous 50 days.

Therefore, our expectations indicate that the scenario of a rise in natural gas during its upcoming trading is likely, but on condition that it first overcome the obstacle of the resistance level 9.600, and then target the resistance level of 10.70.

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