- Fed’s Powell: optimistic, implying upside shift in dot plot.
- EUR/USD sent down on yields and higher DXY.
EUR/USD has been hit hard on the back of today’s noise coming from Fed chairman Powell’s testimony to Congress where the dollar has taken off due to an optimistic assessment of the US economy from the Chairman. DXY has rallied to 90.49 and the 10-yr yields are through the roof from 2.8460% to 2.9135% the high so far. Currently, EUR/USD is trading at 1.2242, down -0.58% on the day, having posted a daily high at 1.2347 and low at 1.2222.
Fed’s Powell LIVE testimony to Congress: does not see a risk of a recession
While the rhetoric of Powell’s written and oral testimony is suggesting that the Fed position hasn’t really changed under its new leadership with gradual hikes remaining the theme, the tone is skewed towards a more aggressive monetary policy response which markets are reacting to.
European session highlights:
Jens Weidmann, Bundesbank president, was crossing the wires and explained that the ECB monetary policy will remain very accommodative even if QE ends with recent strength of Euro unlikely to alter the policy stance. In data, the economic sentiment indicator for the Eurozone decelerated to 114.1 in February.
The technical picture is a great deal more bearish with RSIs biased to the downside and the price further below the daily 10 and 21 SMAs and daily double top/hard resistance line. 1.2220 guards 1.22 the figure, (50-D SMA). On the wide, the January 18 low at 1.2165 would be next in focus head of the 2017-2018 uptrend at 1.2044. To the upside, 1.2330 needs to be broken with positive closes above it for a run to 1.2380 through the 21-D SMA, (1.2360).