US Dollar Price Action Setups into Jackson Hole: EUR/USD, USD/JPY, GBP/USD, USD/CAD. In this video, James Stanley discusses:
The US Dollar continued its descent this week even as both CPI and PPI showed larger inflation figures. While this would normally be met with weaker expectations for rate cuts, that hasn’t really happened here as US Treasury Secretary Scott Bessent said this week that he could see rates at 150-175 bps lower, and perhaps even a 50 bp cut at the meeting in September. Shortly after, markets had priced-in a 99.9% probability of a rate cut in September although that’s pared back a bit.
Perhaps the larger question is even with a rate cut – would that mean US Dollar weakness. Trump has been clear that that’s what he would like to see, both with rate cuts and USD weakness, but after a bearish first half of the year that’s brought higher inflation figures, there’s a very real question as to whether the Fed will agree with that premise. We’ll hear more next week as Chair Jerome Powell goes to what will probably be his final Jackson Hole Symposium atop the FOMC.
For USD strength, EUR/USD and USD/CAD remain attractive, and perhaps even USD/JPY. In EUR/USD, there’s a rising wedge formation and resistance potential at a key Fibonacci level at 1.1748. For USD/CAD, the pair has held up well over the past week even as USD weakness has taken-hold. And in USD/JPY, the pair has continued to hold the same support as last week around the 146.95 Fibonacci level.
For USD-weakness, I remain partial towards GBP/USD which has shown bullish continuation structure.
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