Market's were on pause during the Asian session, following a risk aversion-dominated Tuesday, in which the EUR/USD pair soared to 1.1337. The negative sentiment among investors surged earlier in the week as stocks plummeted, but was fueled by oil prices, as the US benchmark fell briefly below $28.00 a barrel during the American afternoon, before recovering some cents. Nevertheless, the commodity remains under pressure and will likely keep leading markets' movements.
Later today, FED's Chair, Janet Yellen, will deliver her semiannual report on monetary policy in testimony before the House Financial Services Committee and the Senate Banking Committee, and for the most she is expected to take a dovish stance, offering little hopes for a soon-to-come rate hike, which means the dollar will likely remain under pressure, as she will likely acknowledge ongoing worldwide financial turmoil.
View the Live chart of the EUR/USD
Technically, the 4 hours chart shows that the pair is extending its retracement from the mentioned high, but the movement seems barely corrective, as the price is well above a bullish 20 SMA, whilst the technical indicators are beginning to retrace from overbought territory. The ongoing downward correction can extend now down to 1.1215, with a break below this level, most likely pointing for a test of the 1.1160. If the dollar strengthens further, 1.1120 is the next bearish target.
A recovery above 1.1290 on the other hand, will likely result in a retest of the mentioned daily high, while an extension above it, will result in an extension towards the 1.1360/80 region.
Latest updates on the EUR/USD Forecast
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