EUR/USD Forecast: Dovish Powell not enough to push it higher

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1818

Federal Reserve chief Jerome Powell to testify before Congress.
European Industrial Production missed the market’s expectations in May.
EUR/USD bounced from a fresh three-month low, but the upside seems limited.

The EUR/USD pair recovered nicely from an intraday low of 1.1771, also a fresh three-month low, and trades above the 1.1800 level. The American dollar maintained the positive tone through the first half of the day, giving up as Federal Reserve chief Powell’s testimony looms. The head of the US central bank will testify on the Semi-Annual Monetary Policy Report before the House Financial Services Committee.

Powell prepared remarks have already been published, and his words are dovish. He said that the central bank will deliver powerful support until the economic recovery is complete. He added that inflation is expected to remain elevated in the upcoming months before easing.

Beyond Powell, the macroeconomic calendar is scarce. Earlier today, the EU published May Industrial Production, which contracted 1% MoM and rose 20.5% YoY, missing the market’s expectations. The US has just published the June Producer Price Index, which rose 7.3% YoY, beating the market’s expectations.

EUR/USD short-term technical outlook

The EUR/USD pair trades in the 1.1820 price zone ahead of Wall Street’s opening, with its bullish potential limited in the near-term. The 4-hour chart shows that the pair remains below all of its moving averages, although the 20 and 100 SMAs are pretty much flat. Technical indicators have bounced but remain within negative levels. The recovery could extend, but hardly beyond a critical Fibonacci resistance level at 1.1920.

Support levels: 1.1770 1.1720 1.1685

Resistance levels: 1.1840 1.1885 1.1920

View Live Chart for the EUR/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD looks offered below 1.1900

EUR/USD keeps its bearish tone unchanged ahead of the opening bell in Asia, returning to the sub-1.1900 region following a firmer tone in the US Dollar. Indeed, the pair reverses two consecutive daily gains amid steady caution ahead of Wednesday’s key US Nonfarm Payrolls release.

GBP/USD slips back to daily lows near 1.3640

GBP/USD drops to daily lows near 1.3640 as sellers push harder and the Greenback extends its rebound in the latter part of Tuesday’s session. Looking ahead, the combination of key US releases, including NFP and CPI, alongside important UK data, should keep the pound firmly in focus over the coming days.

Gold the battle of wills continues with bulls not ready to give up

Gold remains on the defensive and approaches the key $5,000 region per troy ounce on Tuesday, giving back part of its recent two day. The precious metal’s pullback unfolds against a firmer tone in the US Dollar, declining US Treasury yields and steady caution ahead of upcoming key US data releases.

Bitcoin's downtrend caused by ETF redemptions and AI rotation: Wintermute

Bitcoin's (BTC) fall from grace since the October 10 leverage flush has been spearheaded by sustained ETF outflows and a rotation into the AI narrative, according to Wintermute.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.