Dollar traders huddle up!
The U.S. Dollar Index is flirting with the big 110.00 ahead of Jackson Hole speeches.
Will this week’s events push the Greenback to new 2022 highs against its counterparts?
U.S. Dollar Index (DXY): Daily
U.S. Dollar Index (DXY) Daily Chart
With not a lot of top-tier economic releases on the docket this week, markets are eyeing the Jackson Hole Symposium that starts today.
This year, major central bankers, finance ministers, academics, and financial market participants will be “Reassessing Constraints on the Economy and Policy” in Jackson Hole, Wyoming.
In other words, they’ll talk supply shortages, inflation, and the size of their…balance sheets.Jerome Powell’s speech tomorrow at 2:00 pm GMT will literally be under the spotlight as markets try to pick up clues on the Fed’s tightening schedule.
Many expect the Fed head honcho to downplay “dovish pivot” speculations and talk about the long battle ahead against high inflation.
How will DXY behave in the next trading sessions?
Hawkish tones from Powell or even some of the voting FOMC members might finally push the U.S. Dollar Index (DXY) to the 110.00 handle and closer to previous highs near 112.00 and 120.00.
We could also see a buy-the-rumor, sell-the-news situation where traders buy risk assets or dump the safe-haven dollar as soon as Powell or other Jackson Hole participants share optimistic sound bites.
If you see the dollar losing more ground across the board, then you’ll want to watch the 106.50 inflection point or the 105.00 Double Top “neckline” on the daily time frame.
If the neckline doesn’t hold as support, then DXY could drop to previous inflection points like 103.75 or 102.00.
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