The dollar is keeping steadier so far on the day as risk tones are a fair bit more tepid following the advance in stocks yesterday. The theme going into Jackson Hole has been one that is full of pushing and pulling as markets are unsettled awaiting Powell. Here are some dollar charts to wrap your head around in the meantime:
EUR/USD is keeping below parity and despite a few attempts by buyers to take a look back above the key level, sellers are still in control at the moment so long as price keeps below that. As the path of least resistance remains for a move lower, it won't take much of a nudge from Powell to really send the euro reeling considering the backdrop of soaring energy prices in the region.
USD/JPY broke back above 135.00 last week when the bond market started to move as well but is failing to find any further impetus this week to breach the 27 July high at 137.46. Price action has been consolidating between 136.00 and 137.00 for the most part with Treasuries also awaiting Powell for the next big move.
Buyers are still targeting a push back towards 140.00 in the bigger picture but will need help from higher yields to vindicate such a chase.
AUD/USD saw the downside move earlier this week stall around the 5 August low at 0.6869 and has since come back up as equities also rebounded in the past two days. That said, price is still keeping below 0.7000 and the 100-day moving average (red line) at 0.7025 is also providing added resistance to any push higher during the week.
For the pair, it's all about dollar sentiment (ties to risk because of the focus on Powell's remarks) as we look towards the weekend and if broader markets take to Powell as sending a hawkish message, then there is scope to retest the support highlighted above; vice versa.
