Sticky Inflation Drives Dollar Rise as Markets Anticipate Fed Warsh’s Jackson Hole Speech

The dollar index remains constructive and extends recovery on Thursday, buoyed by hotter‑than‑expected U.S. PCE inflation in July, which revives expectations of a more hawkish Federal Reserve stance and adds fresh support for the greenback.

Wednesday’s close above the 200‑day moving average (98.99) generated an initial positive signal, but confirmation will require further upside—such as breaking the Fibonacci resistance at 99.16. Past such a breach, traders could advance toward pivotal levels at 99.50 and the 63.5 mark (corresponding to the 100‑day MA and Fibonacci 38.2 % extensions). Violating these thresholds would strengthen near‑term bullish directionality.

The daily technical outlook stays bearishly biased, as evidenced by the 14‑period momentum indicator hovering below its centerline and multiple bearish crossovers. While fundamental indicators may back up the dollar, downside risk persists due to these chart dynamics.

Higher inflation alongside a robust U.S. economy suggests the Fed is likely to maintain restrictive monetary policy for a period, fostering broader market expectations that rates will remain steady in September and that a 25‑basis‑point increase is possible in December.

Traders are awaiting the debut address of Federal Reserve Chief warps at the upcoming Jackson Hole Symposium, which is expected to clarify the central bank’s monetary policy path.

Res: 99.37; 99.52; 99.65; 100.00
Sup: 98.99; 98.75; 98.57; 98.44

Source link