Strong opening of an important week in Wall Street, with the minutes from the U.S central bank and the presence of Jerome Powell in the FED´s annual Jackson Hole symposium. The key point will be the “midcycle adjustment” reference made by Powell in the last meeting, because that was what put a lid on the idea of a dovish aggressive move and led to a bearish reaction from investors.
As of now the losses from last Wednesday are almost wiped out, higher U.S debt yields and the lack of “bad” news from the trade front made the upward move possible, especially after the possibility of a 90 days extension to the easing of the restrictions regarding U.S companies dealing with Huawei. But make no mistake, we are far from the safe zone, any “wrong” word in the minutes or a tweet from Trump will derail the optimism because, in the end, nothing has changed.
In the Forex market keep an eye on the EUR/USD, the pair is on a short-term (4H, timeframe) downward channel, with a slightly bearish tone given that it didn’t reach the higher line of the channel after making the third point.
