EUR/USD awaits range breakout, Jackson Hole - key

The EUR/USD pair maintains its bearish pressure, as we progress towards first day of the Jackson Hole Symposium, with a bevy of global central bankers participating in the event that would centered be on the topic of financial stability.

Both the EUR and US dollar eagerly await the speeches by the ECB Chief Draghi and Fed Chair Yellen for fresh light on the future course of monetary policies. Draghi could hint towards QE tapering plans, while Yellen is expected to confirm a Sept QE run-off.

Should Yellen back the case for a Dec rate hike, shrugging-off softening inflation concerns, the US dollar is expected to receive a big boost, which could stall the recent bullish momentum seen in the EUR/USD pair seen over the last quarter. The pair could reverse course and make headways towards 1.1550 levels in the coming months.

However, in case Yellen disappoints and Draghi offers a fresh hawkish twist, then a potential rally towards 1.2000 levels cannot be ruled out. Hence, the Jackson Hole Symposium holds the key for fresh direction in the major, which is confined within a tight range over the last four trading sessions.

EUR/USD Technical Set-up  

According to Slobodan Drvenica at Windsor Brokers Ltd., "the price is holding above the upper boundary of bullish flag that was formed on daily chart and generated signal for bullish continuation. Broken flag's upper resistance line now turned to solid support at 1.1770, followed by daily Tenkan-sen at 1.1750. Corrective easing should be ideally contained above these supports to keep near-term bulls in play. Increased downside risk could be expected on violation of Tenkan-sen support which would expose lower pivots at 1.1724/1.1694 (rising 30SMA / daily Kijun-sen."