The USD is starting the session modestly higher to unchanged, with traders cautious ahead of Fed Chair Powell’s pivotal remarks at the annual Jackson Hole symposium. The U.S. calendar is quiet today, though Canada’s retail sales (8:30 AM ET, expected +1.5% vs. -1.1% prior) will provide some early direction.

Markets are on edge for Powell’s guidance as the odds of a September rate cut have slipped to ~71% from near 100% last week. The Fed Chair faces a delicate balancing act: inflation remains sticky (core CPI +3.1% y/y in July), yet labor market signals have softened, giving doves an argument for relief. Political pressure also looms large, with President Trump openly demanding cuts and questioning Fed independence.

Most analysts expect Powell to strike a measured, cautious tone—acknowledging labor market weakness but emphasizing vigilance on inflation. That type of balanced message would give doves some hope without committing the Fed to immediate action. With another jobs report and CPI print due before September’s FOMC, Powell has room to hold steady and let the yield curve do the easing for now.

BTW, at one point when the expectations were less, the

  • 2 year was 4:00%,
  • 10 year was 4.50% and the
  • 30 year was at 5;00%.

The current yield curve shows:

  • 2 year 3.801%
  • 10 year 4.329%
  • 30 year 4.922%

So the yield curve is lower, but is also marginally steeper with the 2-30 year up to 112 basis points from 100 basis points.

Will the Powell text be released early? All indications are that the text release will be at 10 AM ET (it was the same last year).

What are some of the technical levels in play for the major currency pairs:

EURUSD

EURUSD: The EURUSD heads into Powell’s Jackson Hole speech with a bearish tilt, as the pair trades below the 100- and 200-hour moving averages as well as the midpoint of the move down from the July 1 high. These technical levels are acting as firm resistance and keep sellers in control. Unless price action can reclaim and hold above those moving averages, the bias remains more to the downside, with traders eyeing initial support near the broken 38.2% retracement level at 1.1558. Below that, and a swing area down to 1.15185 and the longer term 100 day MA become the targets. A more hawkish-than-expected tone from Powell could reinforce the downside pressure, while a dovish surprise may spark a corrective push higher into those key moving average barriers.

USDJPY: The price of the USDJPY fell earlier this week with the price chopping lower. That move saw the pair extend (reluctatantly) below the 100 and 200-hour MA (blue and green lines). Those declines on Tuesday, were reversed yesterday on better US data and yields moving higher. The price action did take the price back above the MA (and based at the levels before moving higher). The run, took the price above the 38.2% of the move down from August high at 148.00 and today, the price extended above the 50% midpoint but the price is waffling above and below that level. THe 50% can be a pivot for traders and the price trading around it seems to be a barometer.

On the topside, the 200-day MA and 61.8% at 149.11 are converged and that confluence increases the levels importance. ON a spike higher, watch the retracement back into that MA. It should be watched by traders.

On the downside, the 38.2% at 148.00 followed by the 100 and 200 our MAs at 147.78 and 147.592.

GBPUSD: ...more

The US stock futures are trading modestly higher with the:

  • Dow industrial average up 135 points.
  • S&P index up 12.23 points
  • NASDAQ index up 37.92 points
Source: Investing Live