The euro/dollar pair has recovered in Europe and found a floor around 1.0800. Slightly better risk sentiment has capped U.S. Dollar gains and helped the team consolidate. The market is waiting for Fed Chair Powell to speak at the Jackson Hole Symposium.

On Friday, the Euro dropped below the U.S. Dollar’s 1.0800 level for the first time in 10 weeks. Although the near-term technical perspective of the pair indicates oversold conditions, investors are more likely to focus on FOMC Chairman Jerome Powell’s policy outlook pronouncements than on technical requirements.

On Thursday, the Euro fell against the Dollar due to the strong U.S. Dollar. Presidents of the Federal Reserve Banks of Boston and Philadelphia, Susan Collins and Patrick Harker, agreed on the possibility of a rate held by the Fed for the remainder of the year on the margins of the Jackson Hole Symposium. They have been silent about possibly moving the date back a year. The sharp drop in Wall Street’s major indices gave the USD an advantage over its competitors.
Friday morning’s cautious markets have kept the Dollar stable. The U.S. dollar could decline if Powell says interest rates won’t change much this year. The CME Group FedWatch Tool shows that the market expects the Fed to raise rates by 25 basis points (bps) in December with a nearly 40% probability.

The U.S. dollar may gain ground in the American trading session if Federal Reserve Chair Jerome Powell signals that he is inclined to raise interest rates again despite tight labour market conditions and muted core services inflation.

Trade Idea:

EUR/USD Rebound Nears 1.0800 Amidst Improved Risk Sentiment. Powell’s Jackson Hole Speech Holds Key for Further Moves. Watch for USD Reaction Post-Remarks.