As US data disappoints markets EUR/USD grips to 1.2300 after Powell`s comments
By Content-mgr - on February 27, 2018It’s his first speech, the market is already in a higher volatility phase. The Nasdaq (IXIC) is just 1.12 percent below its record high hit a month ago, while the S&P and the Dow are trading 3.2% and 3.4% below their life highs, respectively.
Fed policymakers anticipate three rate increases this year, and Powell gave no indication in prepared remarks to the House Financial Services Committee that the pace needs to quicken even as the “tailwinds” of government stimulus and a stronger world economy propel the U.S. recovery.
As for EUR/USD it is fluctuating near 1.2300
Spot has given away initial gains on Tuesday in response to a renewed pick up in the buying interest around the buck following Powell’s first congressional testimony.
Fed’s Powell stressed the economic outlook remains strong while he sees the tightening cycle continuing at a gradual pace over the 2018-2020 period.
On the positioning front, US Durable Goods Orders contracted 3.7% MoM in January and the trade deficit widened to $74.4 billion during the same period
Powell noted that wages should increase at a faster pace while he did not appear concerned over financial market volatility. He also suggested that the gradual reduction of the accommodative monetary conditions should prop up the solid labour market and lift prices towards the inflation target.
EUR/USD levels to watch
At the moment, the pair is losing 0.09% at 1.2306 facing the immediate support at 1.2260 (low Feb.22) followed by 1.2206 (low Feb.9) and finally 1.2165 (low Jan.18). On the other hand, a break above 1.2361 (21-day sma) would target 1.2366 (10-day sma) en route to 1.2537 (high Jan.25).
Sources:
https://www.ft.com/content/9d8b5ec6-1bb6-11e8-aaca-4574d7dabfb6
https://www.investing.com/news/economy-news/top-5-things-to-know-in-the-market-on-tuesday-1313442
https://www.sfgate.com/news/article/Powell-says-outlook-strong-signaling-gradual-12711881.php
https://www.wsj.com/livecoverage/fed-jerome-powell-february-2018-testimony
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