Errante’s The Week Ahead: 25^th – 29^th August 2025

Highlights of the Week

• Powell’s Policy Signal: Following Jackson Hole, markets position for a possible Fed rate cut in September; US GDP, PCE inflation, and Powell’s remarks remain critical for confirmation.
• Growth and Confidence: US GDP rebound to 3.0% and consumer confidence data will test resilience of the recovery against weaker labor trends.
• Eurozone Inflation Pulse: German CPI (Aug) offers the latest gauge of ECB policy flexibility as energy prices and tariffs complicate the inflation outlook.

Chair Powell’s Jackson Hole remarks underscored the Fed’s delicate balancing act: a softer labor market warrants caution, yet tariff-driven price pressures still cloud the inflation outlook. With futures pricing a 75% chance of a September cut, the data in the coming week will be pivotal in shaping market conviction.

A sharp rebound in US Q2 GDP to 3.0% would challenge the case for aggressive easing, particularly if coupled with steady Core PCE inflation at 2.8%. However, Powell’s explicit reference to “shifting risks” keeps the door open for a policy adjustment. Durable goods orders and consumer confidence on Tuesday will provide an early signal of corporate and household resilience, while Friday’s PCE release is likely the most market-moving data point ahead of September’s FOMC.

In Europe, German CPI is expected to hold at 0.3% MoM, consistent with stable YoY inflation near 2%. A stronger print could force the ECB to lean hawkish, bolstering EUR, while a soft number may reinforce expectations of a pause through autumn.

For risk assets, Powell’s signal of a potential September cut boosted equities and pressured the USD, but the sustainability of the rally hinges on whether this week’s data validates or contradicts that policy trajectory.

Gold remains supported by falling yields, but upside momentum could fade if growth beats expectations. Traders should prepare for elevated volatility into Friday’s PCE release, with positioning highly sensitive to deviations from forecasts.

Market Events and Announcements (GMT+3)

Monday, 25^th August 2025

• All Day – United Kingdom – Bank Holiday
• 17:00 – USD – New Home Sales (Jul) (Forecast: 630K | Previous: 627K)

Tuesday, 26^th August 2025

• 15:30 – USD – Durable Goods Orders (MoM) (Jul) (Forecast: -4.0% | Previous: -9.4%)
• 17:00 – USD – CB Consumer Confidence (Aug) (Forecast: 98 | Previous: 97.2)

Wednesday, 27^th August 2025

• 17:30 – USD – Crude Oil Inventories (Previous: -6.014M)

Thursday, 28^th August 2025

• 15:30 – USD – GDP (QoQ) (Q2) (Forecast: 3.0% | Previous: -0.5%)
• 15:30 – USD – Initial Jobless Claims (Previous: 235K)

Friday, 29^th August 2025

• 15:00 – EUR – German CPI (MoM) (Aug) (Previous: 0.3%)
• 15:30 – USD – Core PCE Price Index (MoM) (Jul) (Previous: 0.3%)
• 15:30 – USD – Core PCE Price Index (YoY) (Jul) (Previous: 2.8%)
  16:45 – USD – Chicago PMI (Aug) (Previous: 47.1)

Market Insights: Key Charts to Watch

EUR/USD – Daily Chart

Current Market Trend & Momentum:

EUR/USD continues to trade within its broader uptrend, stabilizing above the 61.8% Fib retracement at 1.1673. Momentum is neutral with RSI at 44 and MACD flattening, but the rising trendline from February lows remains intact.

Main Scenario (Bullish Bias):

Holding above 1.1673 keeps the bullish structure valid. Upside targets include 1.1729 (last swing top), 1.1769 (127.2% extension), and 1.1820 (161.8% extension).

Key Levels:

• Support: 1.1673, 1.1573, 1.1451
• Resistance: 1.1729, 1.1769, 1.1820

Alternative Scenario:

A break below 1.1673 would expose deeper supports at 1.1582 and the psychological 1.1550 handle.

US30 – Dow Jones Industrial Average – Daily Chart

Current Market Trend & Momentum:

US30 broke higher, confirming bullish continuation after consolidating above 45,135 support. RSI sits at 61, while MFI suggests steady inflows. MACD momentum has turned positive, supporting further gains.

Main Scenario (Bullish Bias):

Sustained closes above 45,500 pave the way to 45,630 (127.2% Fib), 46,259 (161.8%), and 46,954 (200%).

Key Levels:

• Support – 45,135, 44,440, 43,315
• Resistance – 45,630, 46,259, 46,954

Alternative Scenario:

Failure to hold above 45,135 could trigger a corrective pullback towards 44,440, with 43,315 as the deeper downside pivot.

Errante’s Weekly Newsletter brings you critical market insights to keep you ahead in the financial world. Stay informed and make strategic decisions with Errante.

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