EUR/USD trades flat ahead of US Fed chairman testimony. It hits a low of 1.02820 and currently trading around 1.03235
Federal Reserve Chair Jerome Powell will appear on Capitol Hill on February 11 and 12. He is expected to portray a brighter picture for the U.S. economy, with emphasis on a better job market and decreasing unemployment. Powell might discuss the problem of inflation, which is above the Fed's target, and be more cautious regarding lower interest rates. He will also comment on the implications of tariffs for the economy and note the necessity for the Fed to be apolitical and independent from political pressures. Such testimony can provoke market reactions with yields rising for Treasury.
Technical Analysis of EUR/USD
The pair is holding below short and below long term moving average in the 4-hour chart. Near-term resistance is seen at 1.03600; a break above this may push the pair to targets of 1.04100/1.04700/1.0500/1.0535/1.0575, 1.0600/1.0660. Major bullish momentum is likely only if prices are able to break above 1.0660, where levels of 1.0700, 1.0760, and 1.0800 await. On the downside, support is seen at 1.0350 any violation below will drag the pair to 1.0300/1.0220.
Market Indicators and Trading Strategy
Commodity Channel Index (CCI)- Bearish
Average Directional Movement Index (ADX) - Neutral. It is good to sell on rallies around 1.0365 with a stop-loss at 1.0410 for a target price of 1.0220.
