The dollar seems to struggle ahead of the Thursday speech from U.S. Federal Reserve Chair Jerome Powell. Fed Chair Powell on Thursday addresses a virtual Jackson Hole symposium with the theme “Navigating the Decade Ahead: Implications for monetary policy.” Investors expect he might address the bank’s strategy – especially its 2% inflation target, with speculation that could become an average rather than nominal aim.

“If we don’t get dovishness, I expect you might actually get rates rising and pop up higher in the U.S. dollar,” said Westpac FX analyst Imre Speizer.

“The dollar has had a massive fall since March,” he said. “I think what we’re seeing now is any excuse to buy it back as the punters who have been short all the way down get quite nervous and take the money off the table.”

Leon Cooperman said that The Federal Reserve has created a speculative bubble that has pushed debt levels beyond what the U.S. economy can support. He said “It took the U.S. 244 years to go from zero national debt to $21 trillion,” “We will probably end this year with $27 trillion. That’s a growth rate in debt far in excess of what the economy is growing at and I think that’s going to be a problem down the road.”

Trade optimism and positive news on the corona virus vaccine front has created optimism among the investors. Top US and Chinese officials on Monday agreed to take necessary steps to ensure the success of the US-China phase one trade deal.

In addition, It was reported that the Trump administration is considering providing “emergency use” approval of the experimental corona virus vaccine from AstraZeneca and Oxford University before the Presidential Elections, due in November this year.

EUR/USD 4 Hours Chart:

Support: 1.1764 (S1), 1.1741 (S2), 1.1698 (S3).

Resistance: 1.1829 (R1), 1.1872 (R2), 1.1894 (R3).

The improved risk appetite and the resulting weakness in the dollar has made the day for EUR/USD.  We expect a Bullish trend for the pair.