- The USD recovers some of Tuesday’s losses, as the shared currency finished in the green, amid Fed’s Powell hawkish comments.
- EUR/USD found dynamic support at the 50-hour simple moving average (SMA).
- Fed’s Powell favors a faster taper and expects inflation to moderate by 2022.
During the New York session, the EUR/USD moderately falls, down some 0.20%, trading at 1.1320 at the time of writing. The market sentiment is upbeat, as portrayed by US equity indices rising between 1.06% and 1.50%. At press time, the Federal Reserve Chairman Jerome Powell testifies on the US Congress.
Summarizing some of Powell’s remarks, he said that “[Fed] don’t see wages moving up at a troubling rate that would spark inflation.”. He reiterated that it is time to move from the word transitory from inflation and expects that the abovementioned will moderate in 2022, despite not being sure of the forecast. Powell added that “It is appropriate we consider speeding taper at next meeting to wrap it up earlier.”
EUR/USD Price Forecast: Technical outlook.
As Fed’s Chair Powell testifies at the Congress in the last hour, the EUR/USD pair has remained subdued in a 40-pip range, between 1.1318-58 without swinging violently as on Tuesday’s session. At press time, the pair is testing the 50-hour SMA at 1.1318 for the third time in the day, coinciding with the daily central pivot point, indicating that robust support might deter USD bulls from pushing the pair downwards. In the outcome of a break of the latter, the first support would be the 100-hour SMA at 1.1289, followed by the 200-hour at 1.1267.
On the flip side, if the 50-hour SMA holds, the first resistance would be Wednesday’s cycle high at 1.1359. A break of that level would expose the November 30 swing high at 1.1382, followed by the R1 daily pivot at 1.1401.