Major FX pairs stuck in tight ranges as Jackson Hole event risk looms

Currency markets exhibited minimal volatility during European trading Thursday, with the dollar index showing marginal changes against major counterparts. EUR/USD held near 1.0850, GBP/USD consolidated around 1.2900, while USD/JPY remained anchored near 146.50. The subdued price action reflects typical pre-event positioning ahead of Fed Chair Powell's Jackson Hole speech, with traders reluctant to establish significant positions. Implied volatility measures have compressed to multi-week lows, suggesting markets are coiled for a potential breakout. Historical analysis shows Jackson Hole speeches often catalyze 1-2% moves in major pairs within 24 hours of delivery. Current positioning data indicates the market is relatively balanced, amplifying the potential for sharp directional moves once Powell provides policy clarity. Traders should monitor key technical levels as potential breakout triggers post-speech.