EUR/USD Review: Focus back on Fed-ECB divergence
|- Powell's Senate testimony has put the focus back on the Fed-ECB policy divergence
- The EUR/USD technical studies have regained bearish bias, so the common currency could explore the downside today.
The EUR/USD created a bearish outside-day candle yesterday and also closed well below Monday's low of 1.1676, putting the bears back into the driver's seat.
The greenback picked up a bid after Fed's Powell reiterated the gradual rate hike path view while noting the economy is nearing the cusp of "several years" of a strong labor market. More importantly, Powell's hawkish stance puts the focus back on the Fed-ECB divergence. The European Central Bank (ECB) is not seen raising rates before the end of 2019.
Consequently, the common currency will likely report losses today. The monetary policy divergence may widen further in the EUR negative manner if the Eurozone June CPI is revised lower today.
Also, the technical studies have adopted a bearish bias - the 14-day relative strength index (RSI) has rolled over in favor of the bears, the pair created a bearish outside-day candle yesterday.
At press time, the EUR/USD pair is trading at a three-day low of 1.1645.
Daily chart
Spot Rate: 1.1645
Daily High: 1.1665
Daily Low: 1.1645
Trend: Bearish
Resistance
R1: 1.1674 (5-day MA)
R2: 1.1703 (50-day moving average)
R3: 1.1745 (previous day's high)
Support
S1: 1.1613 (July 13 low)
S2: 1.1527 (June 28 low)
S3: 1.1510 (June 21 low)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.