EUR/USD: tomorrow's Powell speech is the focal point of the week

This speech is the potential impact item of the Jackson Hole symposium, which will provide, over a long weekend, plenty of grist for the traders' mill. However, a small pebble in the shoes of the world's big money makers: this year again, the meeting will not be held in the sumptuous setting of the eponymous valley in the state of Wyoming, but remotely, by teleconference. As if to remind us that the virus is far from over.

"All eyes and ears are on the Jackson Hole symposium, where U.S. Federal Reserve boss J; Powell will talk about the Fed's plans" on Friday, says Swissquote analyst Ipek Ozkardeskaya. While investors are waiting for clarification on the evolution of the institution's monetary policy, the Fed's strongman "could dampen the mood if he were to be less complacent than expected," warns John Plassard, director at Mirabaud.

By "dampening the mood", we understand that it will cause a downturn in growth stocks, but support the dollar against the euro, the potential "remuneration" of the USD is likely to increase. In any case, traders will have very clear elements of comparison between the ECB's very complacent minutes and the content of Powell's speech, tomorrow at 16:00 (European time).

In terms of statistics, the IFO business climate index in Germany fell below the symbolic 100-point mark, although it did not significantly move away from the consensus. For the construction component alone, however, the data is very encouraging. There was also good news regarding the dynamics of durable goods orders in the United States (excluding automobiles) for the month of July, which rose by 0.6% per month, exceeding expectations.

Next up is the preliminary Q2 GDP data for the US, expected to rise 6.0%, in line with the very first estimates, quarter-on-quarter.

Right now, the pair is trading at $1.1772.

KEY CHART ELEMENTS
No change in chart and technical correlations, despite the technical rebound earlier this week.

The 20-day moving average (in dark blue), which we mentioned in the preamble, is indeed exerting a pressure force, which is calming the few ardors at the end of the protest reaction. The general idea remains bearish and traders will be able to initiate "short" positions on the EUR/USD pair by locking in a target at $1.1485.

MEDIUM TERM FORECAST
Based on the key chart factors we have mentioned, our medium-term view on the EUR/USD is negative.

Our entry point is $1.1770. The price target of our bearish scenario is $1.1487. In order to preserve the capital invested, we advise you to position a protective stop at $1.1811.

The expected return on this strategy is 283 pips and the risk of loss is 41 pips.