Thursday marks the start of this year’s Jackson Hole Economic Symposium. The theme for this year’s event is ‘Fostering a Dynamic Global Economy’, and there are two gigantic question marks revolving around two of the world’s largest economies as we near the event: For Fed Chair Janet Yellen and the Federal Reserve out of the United States, those questions revolve around balance sheet reduction; and for Mario Draghi and the European Central bank, the big item of interest is when the ECB may start to step back from their massive stimulus outlays.

For traders, the hope is that we’ll see the spark of some new trends that may have some continuation potential. While this year’s major trends in the U.S. Dollar and the Euro have been robust, they’re both a bit stretched at the moment, and this is urging caution around continuation approaches. Below, we’ll look at three of the ‘bigger’ FX market themes to watch that will face some form of test in the coming days.

EUR/USD

Keep this one circled on your charts, because it’ll likely be on the move as we approach week-end. Both Janet Yellen and Mario Draghi are speaking at the symposium, and each is expected to deliver some form of new information on each banks’ respective plight towards quantitative tightening. Curiously, each of these moves towards tighter policy bring varying market impact, or at least expectations of impact. For the Fed – the expectation is to hear the bank give a bit more information on the topic of balance sheet reduction, specifically timing, and how that might fit with the rate hike plans at the Fed. Since the Fed started talking about the balance sheet in March, markets have seemed none-too-happy, as the Dollar has basically just been shelled since that March rate decision.

Out of Europe – Mario Draghi has been trying to avoid the topic of QE taper. This has had a waning impact on the Euro, as his avoidance of the topic at the April and June ECB decisions brought a couple weeks of weakness to the single currency (shown in purple below), while his similar strategy in July seemed to fail as the Euro rallied through the duration of his press conference (shown in blue).