Jackson Hole and its impact on the USD

From today until Saturday, the main event for central bankers will take place in Jackson Hole, Wyoming, with the highlights been  the appearances of Mario Draghi (ECB) and Janet Yellen (Fed) .

Expectations are high once again; in this stance the market will look for clues as to what will be the next move of both central banks.

There are many conspiracy theories that affirm that at this particular event, agreements are reached at the highest level on how the currencies will evolve in the medium term. It is not necessary to emphasizes the important of the USD, reserve currency, and its correlation with all the different assets; Stocks, bonds, gold, oil and commodities in general .

In this brief article I try to analyze the impact in the American currency (USD Index) of this meeting since 2000, obtaining the following conclusions:

- On 9 occasions the event has marked an inflection point in the USD

- In 14 of the last 17 years the USD has continued the trend started after the meeting for at least 2 months

- In a bullish trend (8 of the 14 occasions mentioned), the average USD appreciation was 2.65% in the subsequent 2 months

- In the downtrend (6 of the 13 occasions mentioned) the average depreciation of the USD has been of 4.9% in the subsequent 2 months

- Only 2 times the initial impact of the meeting has been reversed (including the year 2008 with the Lehman Brothers collapse, September 15)

Based on my analysis I will conclude that this meeting will setup the tone and the direction for the next few weeks, and we will position myself using “the trend is your friend” behavior trading pattern.

USD Index and Jackson Hole (vertical marks)

Nota: Este análisis es una opinión personal basada en mi experiencia, no es un servicio profesional de señales. A la hora de operar debe basar sus decisiones en su propio criterio