• EUR/USD collapsed from 1.1370s down to 1.1240s on Jerome Powell’s hawkish remarks against the US Senate Committee on Banking and Housing.
  • Fed’s Powell: “I will talk about speeding up taper at the coming Fed meeting.”

The EUR/USD plummeted during the New York session, on Federal Reserve Chairman Jerome Powell, remarks against the Senate Committee on Banking and Housing.

Market reaction on Fed’s Chair Jerome Powell remarks

At the beginning of the Q&A session, the EUR/USD pair was trading around the 1.1370s but plummeted to 1,1240s on remarks of Jerome Powell.

Jerome Powell said that higher prices are related to supply-demand issues, reiterating that price increases have spread more broadly. He further noted that the risk of higher inflation has increased and commented that it is time to retire the word Transitory when talking about elevated prices.

Regarding a faster QE’s reduction, he said that it is “Appropriate to consider wrapping up taper in a few months sooner.” Further noted that he “will talk about speeding up taper at the coming Fed meeting.” He added that recent data showed elevated inflationary pressures, rapid labor market improvement, and strong spending.

When he was asked about the COVID-19 omicron variant, he said that he “will know within a week or 10 days, can only assess the impact on the economy then.”

EUR/USD Price Forecast: Technical outlook

The 1-hour chart leaves us with a 130 pip sizeable bearish candle on the remarks of retiring the “T” word for inflation. The price plunged through the R3, R2, R1, central daily pivot, S1, and found support around the S2 area at 1.1233, where it bounced towards 1.1270. 

At press time, EUR/USD bulls are having a tough time, trying to break above the 200-hour simple moving average (SMA) at 1.1270. Meanwhile, EUR/USD bears, on the other side, are battling the 100-hour SMA at 1.1261, at the confluence of the S1 daily pivot.

On the way up, the first resistance would be the central daily pivot point at 1.1286, followed by the 50-hour SMA at 1.1300, and November 29 high at 1.1311. On the flip side, the S1 daily pivot at 1.1261 would be the first support, followed by the S1 daily pivot at 1.1233 and then the S3 pivot at 1.1208.

EUR/USD

Overview
Today last price 1.1270
Today Daily Change 0.0001
Today Daily Change % 0.01
Today daily open 1.1279
 
Trends
Daily SMA20 1.1401
Daily SMA50 1.1533
Daily SMA100 1.1663
Daily SMA200 1.1833
 
Levels
Previous Daily High 1.1322
Previous Daily Low 1.1258
Previous Weekly High 1.1324
Previous Weekly Low 1.1186
Previous Monthly High 1.1692
Previous Monthly Low 1.1524
Daily Fibonacci 38.2% 1.1283
Daily Fibonacci 61.8% 1.1298
Daily Pivot Point S1 1.1251
Daily Pivot Point S2 1.1223
Daily Pivot Point S3 1.1187
Daily Pivot Point R1 1.1315
Daily Pivot Point R2 1.1351
Daily Pivot Point R3 1.1379

 

 

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