Nerves show ahead of Powell’s Jackson Hole speech
Nasdaq => The index slips towards 13100
ETH/USD => The cryptocurrency trades 7% higher this week
EUR/GBP => The pair rises towards 0.8450
Nasdaq awaits Fed Powell
The Nasdaq closed 1.6% higher in the previous session, helped higher by stronger than expected data and unfazed by hawkish Federal Reserve remarks as the Jackson Hole symposium kicked off.
US GDP was upwardly revised higher to -0.6%, up from -0.9%. Despite the improvement, the data confirms that the US entered a technical recession in Q2. However, the jobs market is also holding up well. Initial jobless claims unexpectedly fell.
Looking ahead now, all eyes are on Federal Reserve Chair Jerome Powell’s speech at Jackson Hole. He is expected to adopt a hawkish tone, given that inflation at 8.5% is still significantly above the Fed’s 2% target. A very hawkish sounding Fed could pull the Nasdaq lower. In addition to Powell, there is plenty of data to digest, including the PCE inflation gauge and Michigan consumer confidence.
| US Core PCE | Expected: 4.7% (1%) | Previous: 4.8% |
Where next for Nasdaq?
The Nasdaq found support at 12800 and is attempting to climb higher.
The price trades caught between the 50 and 200 sma. The rise back over the multi-month falling trendline and the receding bearish bias on the MACD suggests that there could be more upside. A move over 13725 the August higher would extend the bullish recovery bringing 14300 into play.
Sellers will look for a move below 12800 horizontal support and 12600 the 50 sma to create a lower low and breakout to the downside.
ETH/USD rises ahead of merge next month
ETH/USD pushes above $1700 after tumbling from $2000 to $1530 earlier in the week.
ETH/USD is showing strong momentum, which could be attributed to the upcoming software upgrade called the Merge. The market appears to agree that the Merge is expected to positively impact Ethereum price, easing fears of a bear market.
Ethereum’s transition from proof of work to proof of stake consensus is almost complete, with the Merge widely anticipated to happen in September, starting around the 6th of the month. Meanwhile, miners are less impressed ad the upgrade, which renders their equipment useless.
EUR/GBP rises ahead of German consumer confidence data
EUR/GBP fell 0.15% in the previous session despite better than forecast German data.
German GDP was upwardly revised to 0.1% from 0%, and German IFO business claims also fell than forecast. However, at 88.5, it I s still hovering at a two-year low. More than half of the companies surveyed expect to raise prices over the coming three months, suggesting that inflation still has further to rise. The minutes from the ECB meeting showed that policymakers see more work to tame inflation and were also increasingly concerned over the prospect of a recession, weighing on the euro.
Today the pair is edging higher ahead of German consumer confidence, which is expected to decline further.
| Ger. consumer confidence | Expected: -31.8 (3k) | Previous: -30.6 |
Support can be found at 0.84(round number) and 0.8345 (August low).
Resistance for the pair can be seen at 0.8480 (50 sma) and 0.8510 (August high).
