The Eurodollar is trading near a 0.7% sell-off today and testing an upward trend line after Powell's hawkish speech in Jackson Hole. Today's data according to the University of Michigan performed poorly, and moments after Powell's speech, the Fed's Patrick Harker spoke on the economy.
Fed Harker
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Create account Try a demo Download mobile app Download mobile app- I have doubts that rate cuts will be considered sooner than next year although the labor market is cooling off
- It will take some time to reach the inflation target.
- The Fed can hold interest rates steady at higher levels and see how that affects the economy.
- If the decline in inflation stalls, we can call for more rate hikes .
- The Fed has taken a restrictive stance and needs to apply pressure although according to Harker there is currently no need for further rate hikes
Sentiments according to University of Michigan and inflation expectations came out negative for Wall Street (weaker consumers) and 'positive' for the dollar (inflation expectations rose):
- Consumer Sentiment by University of Michigan: 69.5 vs. 71.2 previously and 71.2 forecasts
- Expected conditions: 65.5 vs. 67.3 previously
- Current conditions: 75.7 vs. 77.4 previously
- Short-term (1-year) US inflation expectations:3.5% vs 3.3% forecasts and 3.3% previously
- Long-term (5-year) US inflation expectations: 3% vs. 2.9% forecast and 2.9% previously
EURUSD is testing the autumn/winter 2022 uptrend line. If the bulls fail to hold 1.077, supply may begin to prevail indicating a possible change in the medium-term trend in favor of the dollar. EURUSD has defended the 1.075 level where we see the 61.8 Fibonacci retracement of the December 2022 upward wave. In view of the defense of the key zone, the risk premium may, at least in the short term, favor the bulls on the eurodollar. 
Source: xStation5
