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USD/JPY has bounced strongly off support. The pair is likely to retest towards former support at 108.13 (17/04/2017 low) . Expected to show another leg lower.

We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

GBP/USD bearish momentum has stalled near key support at 1.2757. Hourly resistance is given at 1.2917 (18/08/2017 high). Hourly support at 1.2812 (12/07/2017 low) has been broken. Expected to show continued bearish pressures.

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

EUR/USD short-term bullish pressures are slowing down. Down trend resistance is located at 1.1816. Hourly resistance can be found at 1.1910 (02/08/2017 high) while hourly support lies at 1.1613 (26/07/2017 low). Expected to show renewed bearish pressures.

In the longer term, the momentum is now turning largely positive. We favour a continued bullish bias. Key resistance holding at 1.1871 (24/08/2015 high) has been broken while strong support lies at 1.0341 (03/01/2017 low).

AUD/USD climb higher after the retest of the lower median line (LML) of the major ascending pitchfork and now is targeting the upper median line (uml) of the minor descending pitchfork. Technically should jump much higher after the failure to close on the LML. Only the fundamental factors will send it below the dynamic support.

Price continues to drop and is expected to reach the major confluence area formed by the 1.2460 static support with the lower median line (LML) of the major black ascending pitchfork. It slips lower along the median line (ml) of the minor descending pitchfork, signaling that the bears are in full control.

Price changed little today and waiting to the afternoon's fundamental events to bring some volatility. Is still located in the buyer's territory, but needs a bullish spark to be able to resume the upside movement. Continues to move somehow sideways right now, is consolidating the latest gains, so we have to wait for a fresh trading signal.

Has shown some exhaustion signs in the last weeks, but maintains a bullish perspective as is located above some important support levels. We may have a high volatility in the afternoon as the economic calendar is filled with high impact data. The fundamental factors will take the lead, so you should be careful not to suffer a heavy loss.

The German Ifo Business Climate will be sent to the public earlier and is expected to drop from 116.0 to 115.0 points, while the German Final GDP could increase by 0.6%, matching the 0.6% growth in the former reading period.

The Yellen's and Draghi's speeches will shake the markets, remains to see how the EUR/USD will react, that's why will be better to stay away tonight.

Price hovers above the 1.1712 major static support, but failed to retest the upper median line (uml), signaling that could come down to retest the median line (ml) of the ascending pitchfork. The perspective remains bullish despite the minor retreat, should climb towards new peaks as long as the median line (ml) and the ML are intact.

Jackson Hole to be a non-event

After a soft start yesterday evening with comments from Fed’s George and Kaplan, who took opposite side about the highly discussed inflation issue, Janet Yellen and Mario Draghi will have the opportunity to present their views. We anticipate that Janet Yellen won’t take any risk and should come with a rather neutral stance, meaning that she’ll leave the door open for a tightening move before the end of the year, while at the same time maintaining a cautious tone in response to weak price pressures. However, keep in mind that the Fed Chair will talk about financial stability, which give her plenty of room to avoid any hot topic. There is great chance is will be a non-event.

However, Mario Draghi will have the difficult task to talk down the euro, which has surged substantially over the last weeks - the single currency reaching 1.1910 against the USD on August 2nd before stabilising at around 1.17 - while preparing the market for the end of the ECB’s quantitative programme. Indeed, the ECB’s September meeting is just around the corner and Draghi won’t have much opportunity to prepare at best investors.

The bottom line is that we expect the Jackson Hole Symposium to have much effect on the EUR and USD crosses. EUR/USD continues to trade within the 1.1662-1.1910 range. We still believe that maintaining a downside bias is the best choice.

Repeated strong rejection at 0.7867 (Fibo 61.8% of 0.7807/0.7962 upleg) on Friday and subsequent quick bounce suggests very strong support. In addition, two attempts below daily Tenkan-sen (0.7885) failed to close below, signaling that near-term pullback from 0.7962 (17 Aug high) might be running out of steam.

Near-term action is holding in triangular pattern (upper boundary at 0.7933, reinforced by daily Kijun-sen and lower at 0.7867) with break of either side needed to generate firmer direction signal.

Top at 0.7962 marks next pivotal barrier, violation of which would open way for fresh attempts through 0.8000. On the downside, loss of strong 0.7867 support would risk retest of key n/t support at 0.7807 (15 Aug correction low), reinforced by the top of rising daily cloud.

Res: 0.7920, 0.7933, 0.7950, 0.7962
Sup: 0.7885, 0.7867, 0.7832, 0.7807

US futures are flat ahead of the open on Friday, in keeping with moves seen elsewhere in the markets as we await comments from two of the world’s most influential central bankers later on in the session.

The Jackson Hole Symposium is widely regarded as one of the most notable annual events, not only because of the speakers it attracts but also because it has been used as a platform to warn of upcoming policy announcements. In the past it has been Janet Yellen’s predecessors – Alan Greenspan and Ben Bernanke - that have delivered such warnings, the question today is whether she will do the same.

The final months of the year are going to be very interesting as far as the Fed and the ECB are concerned which makes today’s appearances from Fed Chair Yellen and ECB President Mario Draghi all the more interesting. Both central banks have started the process of tightening monetary policy, although the ECB would probably claim it’s more a case of removing accommodation. Either way, with the process underway, investors are keen to know what they plan next.

The Fed is already well underway with its rate hikes, having started almost two years ago and having raised three more times since (so four in total). With inflation still lagging well below target though, there is growing unease within the central bank about whether the current pace is appropriate. Investors have long been unsure that there’ll be another rate hike this year and the message seems to finally be filtering through to the Fed. It will be interesting to see whether Yellen will address this today or instead focus on balance sheet reduction, which is expected to be announced in September and doesn’t interest investors in the same way.

The ECB is taking a far more cautious approach having dealt with a far more severe crisis for the last decade, one that the region is only just starting to truly recover from. The central bank announced one reduction on asset purchases last December and it’s expected to announce another in the coming months. While investors are desperate to get more information on this, I think it’s highly unlikely given the ECBs unease at past market reactions. I think the central bank will prefer to address this after the meeting next month on home turf and won’t want to risk further tightening of financial conditions in the meantime, with the euro having already sharply appreciated this year.

According to the Ministry of International Affairs and Communications, Japanese core inflation continued rising steadily for the seventh consecutive month in July. However, the measure remained weak, as anticipated, far away from the Bank of Japan’s (BOJ) 2% target, reducing chances for a rate hike anytime soon. Consequently, the yen retreated slightly against its US counterpart during the Asian trading hours.

As analysts projected, for the month of July, headline consumer prices in Japan picked up by 0.4% y/y for the fourth consecutive month.

Excluding fresh food items, the core CPI index improved in line with forecasts by 0.1 percentage points to 0.5% y/y, recording the highest growth since April 2015 and gaining for the seventh straight month. Though it remained below 2015 levels when the index was above the 2% target before the massive earthquake of a magnitude of 8.5 (Richter scale) hits the country. Barring energy products as well, the index posted its first growth in five months, increasing by 0.1% y/y.

Food prices were up by 0.6% y/y (-0.3% m/m, seasonally adjusted), while fuel, light and water charges increased the most, jumping by 4.3% y/y (0% m/m, seasonally adjusted).

In Tokyo, the flash CPI index for the month of August, experienced the highest increase since 2016, hinting that nationwide inflation to be released next month might elevate. The index rose surprisingly by 0.4 percentage points to 0.5% y/y, exceeding the forecast of 0.3%. Core CPI came in better than expected as well at 0.4% y/y. This was above the forecast of 0.3% and July’s mark of 0.2%.

While the Japanese economy picked up speed in the second quarter, with GDP growing substantially from 0.4% to 1.0% and household and business spending showing signs of improvement, companies still felt hesitant to raise prices. They were also reluctant to increase wages as they believe that the recent economic pickup might be temporary. Hence, taking all this into account, the decision of the BOJ in July to downgrade its inflation forecasts for the next two years is justified together with the projections that the BOJ will likely stick to its current ultra-easy policy during its next meeting on September 20. Note that the BOJ expects inflation to touch its 2% target in the fiscal year to March 2020 as it anticipates that gradual developments in the labor market will boost prices.

Looking at the reaction in the forex markets, the yen fell immediately by 0.20% relative to the dollar, with dollar/yen climbing from 109.51 prior the data release to a session high of 109.71. However, the pair edged down afterwards, last trading at 109.64.