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Since this headline hit the market late last Thursday, the USD has managed to gain some ascendancy.

“Powell to discuss monetary policy framework review at Jackson Hole”

The policy framework review is expected to: “[provide] stronger guidance about the path of interest rates by linking the timing of future rate increases to specific thresholds for unemployment and inflation.”

Using target figures will certainly add ‘clarity’ but it’s also there to let inflation and employment overshoot to give the economy that ‘extra’ boost it needs. That will also mean the market has the ability to overshoot and it will be allowed to ‘run’ on fluctuations and longer lead times before policy changes are enacted.

Fundamentally the Jackson Hole speech could be a core catalyst for the coming months even with the US Presidential elections only 2 months away. So, all eyes on Jay on Thursday.

The Technicals

EUR/USD has now tried 4 times to get back towards the $1.19 handle but there is considerable resistance at the $1.1850 level to overcome. Momentum remains negative so Jackson Hole is likely to be a catalyst for the pair.

AUD/USD, like its EUR peer, is stuck. It did move back into the $0.72 handle but that was a weak move as no new intra-week session highs were produced and the candle patterns are of weakness. The AUD side is back by some solid fundamentals but in the main needs a catalyst for direction.

USD/JPY however is a touch different, there is a breakout. It moved strongly into 106, consolidated at the 106.30 level and looks to be pushing on. If Jackson Hole is the catalyst event that we think it is, the pair could be north 107 very quickly.