The next few days will likely be full of unusual degrees of volatility in both the forex and stock markets. Let’s discuss why, and how to prepare for it, as we issue an urgent warning: Jackson Hole is here.
What is Jackson Hole?
The Jackson Hole Economic Symposium, often simply referred to as ‘Jackson Hole’, is an exclusive, three-day annual conference sponsored by the Federal Reserve Bank of Kansas City. Held in Jackson Hole, Wyoming since the early 80s, the conference is an extremely significant event for traders and investors, as it is attended by many of the biggest movers and shakers in the global financial markets. Invites are reserved for influential investors, prominent government officials, economists, and central bankers, and media coverage of comments and speeches at the event can heavily influence market sentiment and price action.
Potential Impact on Major Pairs
Jackson Hole is an extremely difficult event to prepare for because coverage is extensive, and any number of off-hand remarks could have dizzying unexpected consequences. With the conference kicking off today, traders should take caution since the forex and stock markets could easily become the wild west over the next few days, with any number of catalysts surfacing.
Tomorrow at 10 am Eastern Time, Fed Chair Jerome Powell is set to give a Symposium speech on economic outlook which will likely address the dual problems of inflation and recession, wherein he will offer hints at Fed policy plans. Depending on whether his remarks are interpreted as hawkish or dovish, this could potentially cause USD to either plummet or soar against other currencies. With a smaller Q2 US GDP contraction than originally estimated, and Core PCE Price Index (the Fed’s preferred measure of inflation) numbers also coming out tomorrow at 8:30 am, traders, Powell, and conference attendees will all have much to chew on.
Possible USD Setups
According to the EdgeFinder, A1 Trading’s market scanner tool that helps traders conduct analysis, here are three of the top-rated pairs to sell for USD bulls. All three have recently hit key support zones, though no breakouts from their clear downtrends have yet to occur. If Powell comes across as particularly hawkish tomorrow, this could prompt breakouts to the downside, and continuation for the existing downtrends. However, if he comes across as dovish, we may see support hold, along with breakouts to the upside, disrupting these downtrends.
1) GBP/USD
2) EUR/USD
3) AUD/USD
Two surprises occurred this week from both central banks of Australia and Canada. Economists forecasted an unchanged discount rate, but the banks had other plans in mind. This caused a heavy positive move for AUD and CAD after reaction to the news. Here is what we are looking for in these types of pairs going […]
Over the past week, several news events paved the way of sentiment on monetary policy. Through the forest of mixed uncertainty, we can find the clearing of one asset that looks ready to take off. Gold has come back to a critical level, and it is up to smart money what happens next. EdgeFinder Analysis […]
Gold is up nearly half a percent today while USD down a third of one as of 10:18 am EST. As we wait for the upcoming and looming NFP numbers this Friday, we can assess the economic data we already have. EdgeFinder Analysis The stock market sighed in relief after the debt ceiling bill finally […]
