EUR/USD inches to near 0.9970 but is still inside the woods, focus shifts to Fed’s Powell

• EUR/USD is expected to deliver a lackluster performance ahead of Fed Powell’s speech.
• Fed’s Powell is expected to follow the footprints of RBNZ’s Orr and may sound hawkish
• The arrival of winter will impact the already vulnerable Europe energy market.

The EUR/USD pair is auctioning in a limited territory as investors are awaiting commentary from Federal Reserve (Fed) chair Jerome Powell at Jackson Hole Economic Symposium. The asset is oscillating in a narrow range of 0.9963-0.9976 ahead of cues from Fed Powell’s commentary for more informed decisions. However, the downside remains favored as odds are favoring a hawkish commentary on interest rates.

The cues from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr's commentary at Jackson Hole clear that the central bank will stick to its policy tightening strategy, keeping in mind that the economy will face more heat from the unavailability of cheap money in the economy. More or less, a similar hawkish commentary is expected from Fed’s Powell over guidance on interest rates.

There is no denying the fact that price pressures have displayed signs of maximum upside but an inflation rate figure above 8% is still vulnerable to the economy. So investors should brace for more decline in the extent of economic activities as rate hikes will keep up the ongoing pace.

On the Eurozone front, investors are worried over soaring energy prices as winter is knocking at the door. The European economy is facing the heat of an energy crisis after its embargo on Russian energy imports. It seems like the hasty decision by the European Union (EU) to boycott Russian energy is haunting European Central Bank (ECB) policymakers.

The energy supply crisis is expected to accelerate further as Nord Stream 1 pipeline from Russia to Germany through the Baltic Sea for supplying natural gas is going under unscheduled maintenance. Therefore, the pipeline will remain shut for the last three days of August.