The Fed Chair Jerome Powell hinted at the possibility of cutting rates during his speech at the Jackson Hole Symposium on Friday, which pushed the US dollar down against its major peers. The head of the central bank mentioned the weakness of the labor market as one of the reasons for adjusting the rates.

However, the situation with inflation remains unclear, and market participants will watch closely the Core PCE Price Index outcome this week, which may influence the Fed’s opinion significantly. 

Meanwhile, the pressure on the central bank from the White House increases significantly. Donald Trump has surprisingly ordered to removal of Lisa Cook from her duty as a member of the Fed. Market participants see this dismissal as a maneuver to add some more dovish members to the board and accelerate the dovish cycle. 

However, Lisa Cook refused to leave her post, saying that the president has no authority to remove her. These tensions undermine the US dollar and may put further pressure on the American currency.

EUR/USD: No Clear Bias Amid Tensions in the US

The currency pair is trading with no clear bias as the tensions between the White House and the Fed are moving to the next level. While this news should undermine the greenback, later events in France do not allow the euro to make any substantial gains. The opposition refused to support France’s Prime Minister, Francois Bayrou, in a vote to apply spending cuts, which may lead to the government’s fall and a new wave of eurosceptic rhetoric in the heart of the European Union.

In addition, Donald Trump has threatened to impose additional taxes on all countries that apply digital taxes, which may have a negative impact on the European Union with its Digital Services Act, as the US President considers it a discriminatory step towards US technological companies

From a technical analysis perspective, the currency pair is trading close to the SMA50, demonstrating uncertainty dominating the markets. Long positions will be preferable if the currency pair manages to break above 1.1660, with targets at 1.1740. On the downside, traders can sell from 1.1600, targeting 1.1530 and 1.1500. 

GBP/USD: Pound Sterling Makes Some Gains on the White House-Fed Tensions

The situation with the British Pound is much better compared to the euro, as no domestic tensions undermine the currency. Thus, it attempts to make some fresh intraday gains amid Trump’s attacks on the Federal Reserve. On the British Pound side, there are no important data releases this week. The Bank of England is expected to hold to its current rates for longer, waiting for some additional macroeconomic data.

From the technical analysis perspective, the currency pair is trading close to the SMA50, which means that neither side is controlling the market. Long positions can be placed if the currency pair moves above 1.3500, targeting 1.3570. On the downside, if the SMA50 prevents buyers from pushing the price higher, short positions can be placed at 1.3430, targeting 1.3350-1.3330.

Gold: The Precious Metal Benefits from the War Between the White House and the Fed

The safe-haven asset makes new gains on Tuesday after the attack by the US President on one of the Fed members on the Internet. However, currently, gold is struggling to make any further upside as market participants are awaiting any further information from the United States. The data this week may play a significant role in gold’s price fluctuations, especially the Core PCE Price Index, which will be released on Friday. According to forecasts, the monthly index will remain at 0.3%, while the yearly index may reach 2.8%. However, if readings are below, the US dollar may continue to lose ground.

From the technical analysis side, gold is still trading above the SMA50, which has an upward slope hinting at the development of the uptrend. Traders can buy if XAU/USD moves above 3390, targeting 3450. On the downside, if gold breaks below 3360, it may fall further to 3320 and 3300.

WTI: Oil Edges Lower, but the Upside Is Still Possible

The crude oil made some downside on Tuesday as a corrective move ahead of the report from the American Petroleum Institute. However, the escalation of the conflict in Eastern Europe, together with new sanctions from the United States that may be imposed on all those who buy oil from Russia, may undermine the downside. 

WTI hourly chart

From a technical analysis perspective, oil is trading below the SMA50 today, which means that bears have taken control. Buyers can step up right above 64.00, targeting 64.70-65.00 and even further. On the downside, traders can place sell orders below 63.40, targeting 62.50-62.30.