US dollar gains ahead of Jerome Powell’s testimony
The British pound held steady after the relatively mixed economic numbers from the United Kingdom. According to the Office of National Statistics (ONS), the country’s unemployment rate rose from 5.0% in November to 5.1% in December as expected. The average earnings without bonuses increased from 3.6% to 4.1% while those with bonuses rose to 4.1%. Meanwhile, the number of people who filed for unemployment claims in January declined by more than 20,000. This was better than the expected increase of 35,000 at a time when the country was in a lockdown.
The euro declined slightly against the US dollar after Eurostat published the latest inflation numbers. The headline consumer price index (CPI) increased by 0.2% in January. This led to an annual increase of 0.9%. In the same period, the core CPI declined by 0.5%, leading to an annualised increase of 1.4%. Without tobacco, the CPI increased by 0.8%. These numbers were in line with the first estimate that was published two weeks ago. Meanwhile, data from Italy revealed that industrial new orders increased by 7% in December.
The US dollar rose today ahead of an important testimony by Jerome Powell. Analysts expect him to talk about the rising US treasury yields and the upcoming stimulus package. Most importantly, he will be quizzed about the Fed’s plan to support the ongoing recovery. The dollar will also react to the latest consumer confidence data that will be published by the Conference Board. Analysts expect the data to show that confidence rose from 89.3 to 90.3 in February because of the new administration’s policies and the ongoing vaccinations.
The EUR/USD dropped from a high of 1.2180 to a low of 1.2145. On the hourly chart, the price managed to move below the important resistance level at 1.2170. It also seems like it has formed a small double-top pattern. The price has moved below the 25-day and 15-day moving averages while the Relative Strength Index (RSI) has dropped to 47. Therefore, the pair may continue falling as bears target the next support at 1.2100. This could change during Powell’s speech.
The XBR/USD erased some of the earlier gains but remained at the highest level since last year. The pair is trading at 64.90, which is slightly below the day’s high of 65.77. On the four-hour chart, the pair is slightly above the important support at 64.70. It is still above the ascending white trendline and the 25-day and 15-day exponential moving averages. The pair is also slightly below the upper channel. Therefore, while the overall trend is bullish, the pair may drop to the support of 61.35 in the near term.
The GBP/USD pair rose to an intraday high of 1.4100 after the UK jobs numbers. On the four-hour chart, the uptrend is still supported by the 25-day moving average. It is also slightly below the ascending white trendline while the Relative Strength Index (RSI) has moved below the overbought level. The pair may continue rising so long as the price is above the moving average.