Financial markets offered a muted response towards Mario Draghi’s speech in Germany on Wednesday. Investors who were expecting fireworks left disappointed after the ECB chief maintained a safe distance from market-sensitive remarks.

While Draghi defended QE and stated that unconventional monetary policy was a success, the scant details on the ECB’s quantitative easing exit strategy simply left market players empty handed. Although Euro bulls eventually found support in the form of strong Eurozone PMI reports, the threat of Draghi verbally intervening to weaken the currency at Jackson Hole is likely to limit the upside. With July’s ECB meeting minute’s already revealing concerns over how a resurgent Euro is obstructing the central bank’s efforts to hit the 2% inflation target, Draghi’s speech on Friday will be in sharp focus.

From a technical standpoint, the EURUSD remains bullish on the daily charts, as there have been consistently higher highs and higher lows. Prices are trading firmly above the 50 Simple Moving Average, while the MACD points to the upside. A breakout and daily close above 1.1830 should encourage a further move higher towards 1.1900. In an alternative scenario, sustained weakness below 1.1700 should encourage a further depreciation towards 1.1660 and 1.1600 respectively.

It’s all about the Jackson Hole Symposium

A sense of anticipation can be felt across the financial markets ahead of the Jackson Hole Symposium later this week, which could offer an opportunity for central banks to signal policy shifts. Financial heavyweights such as Mario Draghi and Janet Yellen will be in the spotlight, with markets closely scrutinizing their speeches for fresh insight on the outlook for monetary policy and interest rates.

Although there have been reports that Draghi will not deliver a new policy message at the conference, this does not rule out the possibility of verbal intervention to weaken the Euro. While Federal Reserve Chair Janet Yellen will be speaking on financial stability, investors will most likely comb through the speech for further clues on when the Fed plans to unwind its balance sheet and raise rates.

If Draghi or Yellen surprise investors by announcing new policy messages, financial markets may experience explosive levels of volatility, which should jolt them from their summer lull.