Powell Speech is the Focus of the Day

Market participants will closely follow clues from Fed Chairman Jerome Powell about the near future rate hikes. Additionally, they expect to have the final notes about how the Fed is thinking regarding the pace of the interest rate hike at its September 20-21 meeting.

U.S. Dollar Index (USDX)

The dollar held onto recent gains against the euro and sterling on Friday ahead of Federal Reserve Chair Jerome Powell’s widely-anticipated speech, which traders hope will offer clues on the U.S. central bank’s tightening plans.

Investors will see Powell’s speech at the Jackson Hole symposium at 14:00 GMT for insight into how aggressively the Fed still plans to raise interest rates. Meanwhile, the dollar index gained 0.1%, staying just below a 20-year high hit earlier this week as focus turned to Federal Reserve Chair Jerome Powell’s address to the economic forum.

Technically, the index lost the intraday momentum falling from its previous peak to the support at 108.25 at the time of writing this report. Meanwhile, Fibonacci retracement shows the support too far from the current levels on the hourly chart at 107.40. However, the price action shows support at 108.80 and 108.40. Also, technical indicators show a possibility of a drop due to the emotional resistance the index is facing at 109.20.

Pivot Point: 108.50

Euro (EURUSD)

The euro was barely changed in Asian trade at $0.9971, having failed in several attempts this week to break back above parity against the dollar. It fell below that psychologically important level on Monday.

The European currency rebounds from the support at 0.9910 to exceed the parity levels as the greenback weakens. Technical indicators show a possibility for the continuation of the downtrend regardless of the RSI neutral level at the hourly chart. Meanwhile, the daily chart confirms the decline and remains to pressure the current levels towards 0.9850.

Pivot Point: 0.9990

Spot Gold (XAUUSD)

Gold prices fell on Friday as traders awaited more cues on U.S. monetary policy from the Jackson Hole Symposium but were set to end the week higher as the dollar retreated from 20-year peaks. 

Speculation over Powell’s stance on the path of monetary policy had weighed on the greenback in recent sessions, helping gold stage a three-day winning streak.

Spot gold prices dropped 0.3% to $1,754.43 an ounce, while gold futures fell 0.2% to $1,767.70 an ounce, snapping three straight days of gains.

Spot gold remains negative on both the daily and hourly time frames, but it shows a horizontal trend on the hourly chart. Meanwhile, the daily chart shows a sharper and clearer downtrend targeting levels near $1,700 per ounce.

Pivot Point: 1,753

West Texas Crude (USOUSD)

Oil prices gained almost $1 on signs of improving fuel demand, although further gains were capped as the market awaited clues from the U.S. Federal Reserve chairman on the outlook for rate hikes in a speech later in the day.

Brent futures climbed 0.9% to $100.21 a barrel while WTI futures rose 0.9% to $93.40 a barrel. Both contracts jumped in the early session by as much as $1 after slumping about $2 on Thursday.

WTI rebounded from the support at 93.20 reaching above $94.50 per barrel and rising. However, the overall trend remains negative on the daily time frame unless prices broke above $96.20 per barrel which is the neckline of the double bottom on the daily chart.

Pivot Point: 93.50