3 Trades to watch after Jackson Hole: EUR/USD, USD/JPY, Nasdaq

The US dollar remained supreme following a hawkish speech from Jerome Powell at the Jackson Hole Symposium.
Powell warned that interest rates aren’t likely to come down soon, and that a softer labour market will “bring some pain to households and businesses”.
The combination of a weaker economy and higher interest rates weighed on US equity markets. Wall Street was broadly lower on Friday and more than erased all of Wednesday and Thursday’s gain, closing the week with bearish engulfing candles on the daily chart.
AUD was the strongest currency last week following news of more stimulus China’s government, although it handed back most of its gains on Friday due to a stronger US dollar. The US dollar rose against all other major currencies, whilst GBP and CHF were the weakest last week.
Australian retail sales are in focus at 09:30.

EUR/USD chart:

EUR/USD rose to a 5-day high on Friday, with its rally stopping just shy of the 161.8% Fibonacci projection. Yet the sharp reversal saw the day close with a large bearish Pinbar on the daily chart, which marks a potential swing high just below 1.0100.

The 4-hour chart shows a bearish engulfing (and bearish outside) candle. Prices have just broken beneath trend support and considering a break of the July low (0.9992). The bias remains bearish below the parity resistance zone and for a move down towards the 138.2% and 161.8% Fibonacci projections.

USD/JPY 4-hour chart:

USD/JPY eventually broke higher from the symmetrical triangle we mentioned on Friday, although there was a volatile false break to the downside initially. However, the 50-bar eMA provided support and a bullish engulfing candle then formed. Prices are now trading just above last week’s high, so it appears the bullish trend is set to continue. The next target for bulls to consider is the resistance zone around 139.

Nasdaq 100 4-hour chart:

Momentum turned sharply lower on Friday for US stocks and formed a bearish engulfing candle on Friday. The Nasdaq 100 opened at the high and closed at the low of the week. And at current levels, the index is on track for a bearish hammer on the monthly chart, with just three trading days left in the month.

The four-hour chart shows that prices broken out of a small corrective channel and respected a bearish trendline. The 50 and 100-bar eMA’s also capped as resistance. Support was found at the monthly pivot point and 12,450 low, and we suspect a period of consolidation or retracement higher is on the cards today before losses resume. The bias remains bearish below 12,800 and for a move down to the 12,000 support zone.

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

Open a Forex.com account, or log in if you’re already a customer.
Search for the pair you want to trade in our award-winning platform.
Choose your position and size, and your stop and limit levels.
Place the trade.

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.