|

EUR/USD: Trades higher after Yellen's speech

The EUR/USD pair remained stronger on Tuesday and was trading 0.5% higher on the day at the time of writing, hovering at around 1.2130.

Traders reacted to the testimony of  Secretary of the Treasury nominee Janet Yellen before the Senate Finance Committee. As her remarks were available ahead of the speech, everything had been digested before she started speaking.

Nevertheless, there was some volatility in the markets, especially in stocks

She said that the US doesn't favor a weak US dollar (although the Fed and the Treasury are doing everything they can to debase the greenback). 

Moreover, she added: "Neither the President-elect, nor I, propose this relief package without an appreciation for the country's debt burden, but right now, with interest rates at historic lows, the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time."

Basically, nothing is changing, and the deficit will continue to soar, while rates must remain at the historic lows, prompting inflation to accelerate. In that kind of environment, the USD should head further lower. 

The EUR/USD pair managed to defend the first major support near 1.2060 and jumped higher, eyeing the initial resistance near 1.2170. If the euro gets through that selling area, it might revisit the cycle highs above 1.23.

Author

Peter Bukov

Peter Bukov

Axiory Global Ltd.

Peter Bukov is one of Axiory’s leading analysts. He has a master’s degree in Corporate Finance and is highly sought after as a teacher of Forex trading at various universities in Slovakia.

More from Peter Bukov
Share:

Editor's Picks

EUR/USD flat lines around 1.1900; looks to US NFP report for fresh directional impetus

The EUR/USD pair is seen oscillating in a narrow trading band around the 1.1900 mark during the Asian session on Wednesday as traders opt to wait for the release of US monthly employment details before placing fresh directional bets.

GBP/USD recovers losses despite rising UK political risks, BoE rate cut bets

Pound Sterling advances against the US Dollar after registering modest losses in the previous session, trading around 1.3650 during the Asian hours on Wednesday. The pair could extend losses as the Pound Sterling faces pressure from rising political risks in the UK and growing expectations of near-term Bank of England rate cuts.

Gold awaits US Nonfarm Payrolls data for a sustained upside

Gold remains capped below $5,100 early Wednesday, gathering pace for the US labor data. The US Dollar licks its wounds amid persistent Japanese Yen strength and potential downside risks to the US jobs report. Gold holds above $5,000 amid bullish daily RSI, with eyes on 61.8% Fibo resistance at $5,141.

Bitcoin, Ethereum and Ripple show no sign of recovery

Bitcoin, Ethereum, and Ripple show signs of cautious stabilization on Wednesday after failing to close above their key resistance levels earlier this week. BTC trades below $69,000, while ETH and XRP also encountered rejection near major resistance levels. With no immediate bullish catalyst, the top three cryptocurrencies continue to show no clear signs of a sustained recovery.

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.