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August 26, 2021

Jackson Hole Symposium Props Up USD- How To Trade This

Frank Cabibi

8/26/2021

Financial authorities from around the world met up today in an all-day event where they will discuss monetary policy going forward. These closed-pressed meetings are eventually leaked to the public as officials are admitting to a higher-than-expected inflation on the USD. Esther George, Kansas City Fed president believes that it would be better to start tapering sooner than later. More talks of reducing the Fed's balance sheet is another thing being talked about.

Our outlook

We can expect volatility today in the forex market today and tomorrow as investors try to interpret these comments and stances toward monetary and fiscal policy in the US. 2022 seems like the year when the Fed will start taking action on tapering according to different analysts' expectations. Powell has been signaling to taper for quite some time now unlike the events of 2008 with Ben Bernanke who didn't give investors a warning, so this time, investors are able to adjust to the sentiment and expectations going into 2022. The dollar may start to see further strength going into next week too.

Trade setups

USDCAD

USDCAD on the 1D chart is up today on a miss in GDP expectations. Price came back to a rising trend line before catching some support which seems like a strong level to keep price up. 1.24882 is additional support if price falls lower.

USDJPY

USDJPY on the 1D chart came up to its 50 DMA after bouncing off a rising trend line paired with support at 109.600. More resistance hovers at 110.488 where there is a triple top. Should that level get broken, there is more resistance above at the highs of 111.600.

AUDUSD

AU came all the way back up to resistance on the 1D chart around .72907 and is beginning to retrace. As the buck still seems weak compared to the USD, we might see a lower low after this to below the previous bottom, and price might touch support around .70236.

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