Technical Update

August 30 2021

In his Jackson Hole address FOMC Chair Jerome Powell said that the US could start tapering this year if appropriate. However, tapering does not mean that the Fed will raise interest rates any time soon.

Following Jerome Powell’s speech, the markets welcomed the news that suggests the taper will not lead to an immediate increase in US interest rates.

The Chair of the FOMC remains dovish on US Interest rates. He also continued to urge caution as the covid delta variant rapidly spreads across the USA.

There was nothing in Powell’s speech for the US Dollar bulls amongst us. However, that could change at the end of this week if we get a strong NFP report.

EURUSD

EURUSD 20 pip chart http://www.eightdragonstrade.com

The EUR looks to be trapped at the moment finding support from a seemingly dovish US Federal Reserve but capped by an equally if not more dovish ECB.

Resistance this morning is at 1.1810/20 which if broken, the EUR is likely to push on to challenge 1.1850 or possibly 1.1900. However, gains could be limited ahead of the NFP on Friday, should the market become cautious before the data is released.

Support for the EURUSD will now be found at 1.1740/30 if broken the next area of interest for buyers will be at 1.17001.1690, and then at the recent lows of 1.1660/70.

GBPUSD

GBPUSD 20 Pip Chart http://www.eightdragonstrade.com

In our last technical update on the 18th of August, the GBP had just failed to hold onto support at 1.3780/1.3800.

This failure caused the GBPUSD to eventually break lower and trade down towards 1.3600. However, the GBPUSD formed a bottom pattern. From this base, the GBPUSD made strong gains towards resistance at the key 1.3780/1.3800 level.

If the GBP can break back above 1.3800, it will then attack resistance at 1.3840 and 1.3880/1.3900.

However, if the market fails to overcome 1.3800, we should see pressure return to the downside, and the GBP will slip back towards 1.3700 support and possibly 1.3640.

You can contact us at support@8dragonstrade.com

Published by Neil Callard

Forex Trader and Educator. 30 years trading experience, of which 20 years was market making in major currencies in large international financial institutions.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: