Market Sector Scanner: USD Falls as Powell Signals September Rate Cut, Key U.S. Data Ahead This Week
Powell’s dovish Jackson Hole speech boosted expectations for a September Fed interest rate cut, sending the Dow to record highs and weakening the dollar. Key U.S. data this week - durable goods, GDP, inflation, and consumer sentiment - could confirm the cut outlook, while BOJ and BOE policy signals remain in focus.
Last week, markets stayed quiet as traders waited for Fed Chair Jerome Powell’s speech at Jackson Hole. The dollar traded sideways and stocks slipped, even though data was mostly strong with higher U.K. inflation, better PMI numbers in the U.S., U.K. and Eurozone, and stronger U.S. home sales. On Friday, Powell suggested the Fed may cut rates in September, saying the labor market is slowing and tariff-driven inflation is likely temporary. His dovish comments pushed the Dow to a record high, weakened the dollar, and lifted the chance of a September cut to 90%, with traders now watching this week’s labor and inflation data for confirmation.
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Key Events Calendar for August 25 – August 31
Market Sector Scanner
Forex Market
USD/JPY
Last Week Recap:
USD/JPY spent most of last week moving sideways as traders waited for the Jackson Hole meetings. After Powell’s speech, the pair dropped sharply as expectations for a September U.S. rate cut increased. The market is now pricing in a cut at the next Fed meeting, which has put pressure on the dollar.
Technical Picture:
The pair is still stuck in a range with little direction. Prices are trading near the middle of the Bollinger Bands, and the 10-day moving average is flat. This suggests the market lacks momentum and favors range trading for now.
Outlook This Week:
USD/JPY will likely continue to trade sideways, but the bias is to the downside. If the BOJ hints at raising rates or U.S. data comes in weaker than expected, the pair could fall further. Selling into rallies remains a safer approach.
GBP/JPY
Last Week Recap:
GBP/JPY failed to break above the 200 resistance level, which triggered speculative selling. Powell’s Jackson Hole speech added to pressure on the pair by raising the chances of a U.S. rate cut, leading to more selling despite stronger U.K. economic data.
Technical Picture:
After hitting resistance at the upper Bollinger Band and 200, GBP/JPY slipped below the 10-day moving average. This points to sideways or lower price action in the near term.
Outlook This Week:
The repeated failure at 200 makes further losses more likely. Selling into strength remains the preferred strategy for both short- and medium-term trading.
EUR/USD
Last Week Recap:
EUR/USD finished the week slightly higher, reversing early losses after stronger-than-expected eurozone PMI data suggested the ECB may slow or pause rate cuts. The main driver of the recovery, however, was Powell’s speech, where he discussed the potential for lowering U.S. interest rates.
Technical Picture:
The 10-day moving average is flat, pointing to sideways price action this week. Prices are also near the upper Bollinger Band, which makes further gains more difficult.
Outlook This Week:
With resistance close at the upper Bollinger Band, selling into strength looks like the best strategy. Several key U.S. economic data releases are due this week, which could spark volatility and provide trading opportunities.
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Equities
U.S. Stock Market
Last Week Recap:
The Nasdaq pulled back from record highs last week as concerns over high valuations and profit-taking set in after a nearly 10% rise in 2025. However, buyers stepped back in after Powell’s Jackson Hole speech, where he welcomed the potential for a U.S. rate cut in September.
Technical Picture:
The move below the 10-day moving average signals that the recent uptrend may be pausing. With the Bollinger Bands now pointing sideways, range trading conditions are likely in the short term.
Outlook:
The Nasdaq remains positive in the medium to long term, so buying on weakness is still a good strategy. In the near term, range trading looks more effective for consistent profits.
Commodities
Gold
Last Week Recap:
Gold came under pressure early last week but quickly recovered, showing strong demand from buyers. Expectations for a U.S. interest rate cut in September, combined with a weaker dollar, helped fuel the rebound and shifted sentiment back in favor of the metal.
Technical Picture:
The market has moved back above the 10-day moving average, signaling the end of the recent pullback. Buyers are regaining control, but the upper Bollinger Band could prevent significant gains in the short term.
Outlook This Week:
The broader trend remains range-bound, but the tone has turned more positive with support holding firm. Buying on dips remains the preferred strategy, as the market is well supported and carries medium-term upside potential.
Traders this week will keep digesting Powell’s Jackson Hole speech, weighing if his dovish tone means more downside for the dollar or if a September rate cut is already priced in and due for a rebound. Key U.S. data on durable goods, GDP, inflation, and consumer confidence could quickly shift expectations, while overseas, the Bank of England and Japan remain in focus after strong recent numbers. Geopolitical risks also linger, with even a small chance of progress in Russia–Ukraine talks that could lift equities but pressure oil.
