EUR/USD: A joyful day for the bulls

EUR/USD has been trading steadily in range as tension mounts toward Fed Powell's speech. Although the focus is on the Fed, there is some room for other events to impact markets, FXStreet’s analyst Yohay Elam informs.

Key quotes

“Jerome Powell, Chairman of the Federal Reserve, will address the virtual Jackson Hole Symposium and may down the dollar. Investors expect Powell to introduce a new monetary policy framework which includes Average Inflation Targeting (AIT). Adopting that new framework would keep interest rates lower for longer, weakening the dollar.”

“Ahead of the speech, the US releases initial jobless claims, which carry expectations of improving after a disappointing increase over one million last week. The lapse of federal unemployment benefits worth $600/week is weighing on the economy that continues its gradual recovery. Investors will also eye the second release of GDP figures for the second quarter. A minor upgrade is on the cards following the initial report reading a record drop of 32.9% annualized.” 

“Coronavirus headlines have been mostly positive. Markets are shrugging off the increase in European cases and encouraged by the drop in American figures. More importantly, hopes for a vaccine are keeping stocks bid and somewhat weighing on the dollar. Moderna, a firm based in Massachusets, said its vaccine candidate triggers a positive response also with the elderly. Further developments may move markets.”