DailyFX.com -

Talking Points:

- Below 1.3335, EURUSD is exposed to 1.3095.

- If rejected at 103.85/90, USDJPY needs to hold 103.05/10.

- US Dollar strength in August shouldn't surprise - it's a seasonally strong month.

With no Wall Street economists invited to this year's Jackson Hole Economic Policy Forum, market participants widely expect that the high-minded conference will take on a more academic tone.

Considering that the main focus of the conference is labor market recovery, the context of current times - traders waiting with baited breath for each Nonfarm Payrolls report - there is still significant scope for Fed Chair Yellen's speech to make waves in markets.

With the unemployment rate at 6.2% after having been as low as 6.1% in June, the U3 rate is on track to meet or beat the Fed's expectations. Claims continue to drop, and quit rates are at their highest levels in five years. On the contrary, long-term unemployment an issue and wage growth exceptionally weak.

In conjunction with signs of other major economies starting to flail (all of Europe, Japan) and rising geopolitical concerns that could act as a coolant to risk appetite or even global trade, Chair Yellen is likely to embrace a dovish tone today, highlighting the underutilization of the US labor markets.

EUR/USD, USD/JPY Ready for Yellen, Draghi Jackson Hole Speeches

US yields have been falling for some time now and the yield curve has undergone quite a bit of flattening this year (the 2s10s spread has narrowed from +264.8-bps on December 31, 2013 to +192.0-bps today), showing the market has fallen in step with the Fed's demands for lower yields for longer.

Any hint of a pivot away from this ultra accommodative stance and towards and accelerated rate hike schedule could easily spook the markets.

See the technical video for considerations specifically for EURUSD, USDJPY, and USDCAD.

Read more: EUR/USD Slide Continues but EUR Weakness Elsewhere Questionable

Related Articles
  1. Investing Basics

    Building My Portfolio with BlackRock ETFs and Mutual Funds (ITOT, IXUS)

    Find out how to construct the ideal investment portfolio utilizing BlackRock's tools, resources and its popular low-cost exchange-traded funds (ETFs).
  2. Investing

    3 Things About International Investing and Currency

    As world monetary policy continues to diverge rocking bottom on interest rates while the Fed raises them, expect currencies to continue their bumpy ride.
  3. Chart Advisor

    These 3 ETFs Suggest Commodities Are Headed Lower (COMT,CCX,DBC)

    The charts of these three exchange traded funds suggest that commodities are stuck in a downtrend and it doesn't look like it will reverse any time soon.
  4. Trading Strategies

    4 ETFs To Trade the Russian Ruble (RSX, ERUS)

    Discover which exchange-traded funds (ETFs) provide investors with the greatest exposure to the Russian ruble and learn about the risks that come with each.
  5. Chart Advisor

    3 Charts That Suggest Now Is The Time To Invest In Real Estate (VNQ, SPG,PSA)

    Real estate assets have some of the strongest uptrends around. We'll take a look at three candidates poised for a move higher.
  6. Products and Investments

    Are Dividend Stocks a Good Substitute for Bonds?

    Are dividend paying stocks a good substitute for bonds in a low interest rate environment?
  7. Mutual Funds & ETFs

    When Is the Right Time to Change From Mutual Funds to ETFs

    Find out how to determine when it's the right time for you to switch from mutual funds to ETFs, including the benefits of ETFs and who they are best for.
  8. Investing Basics

    An Introduction To Structured Products

    Structured products take a traditional security and replace its usual payment features with a non-traditional payoff.
  9. Investing Basics

    Understanding Alternative Investments

    An alternative investment is one that’s not among the three traditional asset types – stocks, bonds or cash.
  10. Investing

    New Year, New Investing Strategy: Exploring ETFs

    Whether you’re a seasoned investor or new to the markets, you need to learn as much as you can about the present environment and how to navigate it.
RELATED FAQS
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  3. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  4. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  5. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
  6. Can mutual fund expense ratios be negative?

    Mutual fund expense ratios cannot be negative. An expense ratio is the sum total of all fees charged by an asset management ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center