The hawkish testimony by Fed Chair Powell pushed the EURUSD into its bearish cannel between the lower blue and red bands (blue arrow). Underlying support is at 1.0500 (green dashed horizontal). There has been some price activity here in the recent past (January). The round number will also serve as a psychological barrier. However, given Powell's hawkish delivery and upcoming data releases - US job data on Friday and CPI next Tuesday, the level looks fragile.
A break below will be because of greenback strength as opposed to a deterioration in the euro. Rather, the ECB continues with its own hawkish rhetoric and the ECB will hike by 50 bps next Thursday. However, it's all about greenback strength at the moment and data out of the United States.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.