Key Points
- This is Jackson Hole week, and it arrives at a genuinely tense moment for markets. Fed Chair Warsh delivers his address on Friday against a backdrop of US 30 year Treasury yields sitting at 5.23%, close to their highest level in nearly two decades, even as consumer and labour data keep softening. Wednesday’s Core PCE and Prelim GDP releases effectively pre load the picture Warsh will be responding to, and Friday’s Prelim Benchmark Payrolls Revision (the last one was a shock minus 911K) adds another wildcard on the same day as his speech.
- The NASDAQ 100 sits at 29,091.8 on the H4 chart, having rolled over from the 30,000 to 30,400 supply zone that capped its sharp recovery from the 26,800 weak low earlier this month. Growth stocks remain the most yield sensitive part of the market, and whatever tone Warsh strikes on Friday is likely to be felt hardest here. A hold above 28,800 keeps the recovery structure intact, while a break below opens the path back toward the weak low.
- AUD/USD is at 0.7164, pressing toward the 0.7200 strong high after clearing an equal highs liquidity pocket near 0.7160 through a fresh break of structure. Wednesday’s Australian CPI is the pivotal release, coming right after last week’s weak jobs report, and daily technical signals are already flashing a strong buy bias into the print. A hot print keeps the rally alive toward 0.7200, while a soft one risks a pullback into the 0.7050 to 0.7070 demand zone.
Last Week in Review
Last week had a distinctly risk off tone by Thursday. The Dow fell 1.32%, the Nasdaq dropped 1% and the S&P 500 lost 0.87% in a single session, as Treasury yields reversed higher again despite the Treasury Department’s own debt buyback operation designed to ease pressure on the bond market. President Trump added to the unease by stating the US had entered what he called an economic war with Iran, prolonging the tanker blockade through the Persian Gulf and pushing oil prices back up. Disappointing forward guidance from Walmart and soft results from OpenAI, which weighed on AI linked names, compounded the selling. Over the five day window, the S&P finished down 0.91%, the NASDAQ 100 down 2.29%, and the Dow down a more modest 0.34%.
The bond market remained the story beneath the story. The US 30 year yield spent the week oscillating between 5.19% and 5.28%, still close to levels not seen since 2007, and gold continued to rise alongside it rather than falling as the textbook inverse relationship would suggest. That breakdown, which we covered in this week’s Coffee and Charts, reflects safe haven and fiscal credibility concerns overriding the usual yield signal. Elsewhere, AUD/USD shrugged off a weak Australian employment report (employment fell 15,800 against expectations for a 15,000 gain) to keep climbing on broader dollar weakness, while GBP/USD spent the week pressing against its own weak high into Friday’s UK data. Both currencies head into this week’s calendar still carrying momentum.
NASDAQ 100: Growth Stocks at the Mercy of Jackson Hole
Chart: NASDAQ 100 (NAS100), H4 timeframe (TradingView, SMC)
The H4 chart tells the story of a violent round trip. The index built a strong high near 30,700 to 30,800 back in June before a sustained change of character drove it lower through July and into a sharp August selloff that bottomed at the 26,800 weak low. From there, consecutive breaks of structure produced an equally sharp recovery, carrying price all the way back into the 30,000 to 30,400 supply zone by mid August. That zone has held. A bearish change of character has since pulled the index back to 29,091.8, right at the level that previously acted as a pivot during the recovery.
This pullback matters heading into Jackson Hole. Growth and technology stocks carry the highest duration risk in equities, meaning their valuations are the most sensitive to shifts in the long end of the yield curve. With the 30 year yield still elevated near 5.23%, any signal from Fed Chair Warsh that reads as unconcerned about long end yields, or that pushes back on rate cut expectations, could accelerate the pullback toward the 27,600 demand zone and ultimately the 26,800 weak low. Conversely, a tone that acknowledges the yield stress and leaves the door open to easing would likely fuel a retest of the 30,000 supply zone.
The week’s US data adds further texture. Wednesday’s Core PCE, the Fed’s preferred inflation gauge, and the Prelim GDP print will shape the narrative Warsh responds to on Friday. Friday’s Prelim Benchmark Payrolls Revision is the wildcard. The prior revision wiped out 911,000 jobs from the record, and another sizeable downward revision landing on the same day as the Jackson Hole address would be a lot for index traders to digest in one session. Traders may watch the 28,800 level as the key line in the sand. A hold above keeps the broader recovery structure intact, while a decisive break would shift the near term bias firmly bearish.
AUD/USD: Pressing the Strong High Into CPI
Chart: AUD/USD, H4 timeframe (TradingView, SMC)
AUD/USD has been one of the more resilient stories in FX this month. After a choppy June and July confined largely between 0.6940 and 0.7080, the pair broke higher through a clean sequence of changes of character and breaks of structure, clearing an equal highs pocket near 0.7160 to trade at 0.7164. The strong high at 0.7200 is the next objective, a level the pair has not tested since earlier in the year. Daily technical signals currently read strong buy, with weekly signals confirming a buy bias, underlining the strength of the underlying trend.
What makes this move notable is what it has shrugged off. Last week’s employment report showed Australian jobs contracting by 15,800 against expectations for a 15,000 gain, with unemployment ticking up to 4.5%. Under normal circumstances that would be a currency negative print, yet AUD/USD barely paused. That resilience points to broader US dollar weakness doing more of the work than domestic strength, which raises the stakes for Wednesday’s CPI. A hot inflation print, particularly if the Trimmed Mean measure holds around the 0.3% forecast, would reinforce the case for the RBA to stay patient and could be the catalyst that finally clears 0.7200.
The setup beneath price is well defined. A stack of demand zones between 0.7000 and 0.7070 provides layered support beneath the current advance, giving the pair room to breathe on any pullback without threatening the broader bullish structure. A soft CPI print, particularly a miss on the y/y figure which is forecast to cool from 3.8% to 3.3%, would reopen the conversation around RBA rate cuts and could send the pair back into that demand zone. Given the pair is trading into a well defined resistance level ahead of a high impact release, this is a market where the data does the talking this week.
Key Events This Week
Wednesday 26 August Australian CPI (July)
Monthly CPI is forecast at 0.9% (from negative 0.1%) with the year on year figure expected to cool to 3.3% from 3.8%. Trimmed Mean CPI, the RBA’s preferred core measure, is forecast to hold steady at 0.3% month on month. A hot print, particularly on the trimmed mean, would support AUD/USD’s push toward the 0.7200 strong high, while a soft print reopens the case for RBA easing and risks a pullback into the 0.7050 to 0.7070 demand zone.
Wednesday 26 August US Core PCE and Prelim GDP
Core PCE, the Fed’s preferred inflation gauge, is forecast at 0.2% month on month, while Prelim GDP is expected to hold at 1.5% annualised. Both releases land two days before Fed Chair Warsh speaks at Jackson Hole, effectively setting the data backdrop for his remarks. A hotter PCE print would complicate any dovish signalling and could add further pressure to the NASDAQ 100 heading into Friday.
Friday 28 August Jackson Hole: Fed Chair Warsh Speaks
This is the single biggest catalyst of the week. Warsh’s address comes as US 30 year yields sit near 5.23%, close to their highest level since 2007, despite the Treasury’s own debt buyback efforts. Markets want clarity on whether the Fed sees the long end yield spike as a policy concern. A tone that acknowledges the stress and leaves room for support would likely lift growth stocks and pressure the dollar, while a tone that downplays it risks accelerating the NASDAQ 100’s pullback and could extend the dollar’s resilience against AUD.
Friday 28 August US Prelim Benchmark Payrolls Revision
The previous benchmark revision wiped out 911,000 jobs from the official count, reshaping the narrative around US labour market strength. Landing on the same day as the Jackson Hole address, another significant downward revision would add to the case that the economy is weaker than headline data suggests, a combination that could weigh heavily on risk sentiment into the weekend.
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