EUR/USD to New 2024 Highs after Jackson Hole
EUR/USD Analysis
The pair heads towards its best month in nearly two years on optimism around a Fed pivot. With disinflation back on track, employment easing and signs of consumer stress, Fed Chair Powell offered the strongest signal of such shift at Friday's Jackson Hole Symposium. He proclaimed that "the time has come for policy to adjust", opening the door a September cut and said that officials "do not seek or welcome further cooling" in the labor market. [1]
Mr Powell's dovish tone bolstered market expectations around the Fed's path, sending EUR/USD to new highs for the year. Bulls now eye the 2023 peak (1.1276), but we are cautious around further strength which would be hard to justify based on the monetary policy dynamics.
Mr Powell did not offer any clues around the extent of rate cuts and market pricing for 100 basis seems stretched. Its European counterpart has already pivoted back in June and another move next month is gaining traction, with various officials like Mr Rehn [2] and Mr Kazaks [3] hinting at such action last week. As a result we could see pressure, but strong catalyst would be needed for a breach of the EMA200 (1.0980-60) that would pause the bullish bias.
Markets now turn to Friday's US PCE inflation update that will likely determine the pair's trajectory.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 27 Aug 2024 https://www.youtube.com/watch | |
| Retrieved 27 Aug 2024 https://www.suomenpankki.fi/en/media-and-publications/speeches-and-interviews/2024/governor-olli-rehn-the-european-and-finnish-economies-pursuing-growth-in-the-shadow-of-geopolitical-challenges/ | |
| Retrieved 16 May 2026 https://www.youtube.com/watch |
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