[VIDEO] Fed’s Powell may help give EUR/USD it’s next direction

If Powell continues with his dovish views, watch for EUR/USD to go higher and US Dollar lower.

FED 7

As we discussed in the Week Ahead,  tomorrow US Fed Chairman Powell will give his semi-annual testimony on Monetary Policy to the US Senate.  Since the FOMC meeting in January, commodities have gone higher. Yet fed officials, including Powell himself, have said the increase in commodities is transient.  Expect more to this language tomorrow when Powell testifies.

As result of the Fed’s dovishness, along with rising commodity prices, the US Dollar Index is moving lower and appears to have broken the neckline of a head and shoulders pattern. 

The euro makes up 57% of the us dollar index, so we could expect that the EURO VS the US Dollar is doing the inverse.  EUR/USD is trading right at the neckline of the inverse head and shoulders.

If Powell continues with his dovish views, watch for EUR/USD to go higher and US Dollar lower. The Q&A portion will be important as, hopefully, as least one of the senators will question him on his dovish views.

Learn more about forex trading opportunities

Learn more about commodity trading opportunities


 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.