EUR/USD Stays in the Cloud Ahead of Powell Testimony
EUR/USD Analysis
The pair rose last week, helped by persistent aggressive commentary from ECB officials, such the ones from the central bankers of Estonia and Slovenia. Speaking on the same event on Friday, Mr Muller [1] and Mr Vasle [2] both hinted to more rate increases past the intended 50 basis points hike in March.
Meanwhile the greenback saw outflows on Friday following the US services sector data, while the Fed's policy seemed to be in the background. It returns front and center this week though, as Chair Powell testifies in Congress on Tuesday and Wednesday. He has maintained his hawkish stance, but had spoken a lot about the "disinflation" process after the last policy decision, a word that was nowhere to be found in the accounts of that meeting. [3]
His commentary could set the tone for the next meeting and determine the pair's next leg, but Mr Powell may be cagey, as his appearance takes place only a couple of days ahead of the US jobs report. EUR/USD makes a cautious start to the current week in anticipation of these events, but tries to sustain its positive undertone, stuck within the daily Ichimoku Cloud.
This gives it the chance to push for the upper border (at around 1.0780), but a catalyst would be needed for breaking above it and towards 1.0930-42. As long as it stays capped by the EMA200 though, the lower border of the daily Ichimokou Cloud is more vulnerable (1.0580). However, the broader 1.0451-1.0380 region can provide support and it is hard to justify sustained weakness below it, given the current policy expectation by the ECB and the Fed.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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