US dollar in a tight range ahead of Powell testimony

The New Zealand dollar rose to the highest level since February 2018 after the Reserve Bank of New Zealand (RBNZ) announced its first interest rate decision of the year. The bank decided to leave interest rates, quantitative easing, and its lending programs intact. It left the main interest rate at 0.25% and the target of its QE program at N$100 billion. In its official statement, the bank said that the country needed more fiscal and monetary stimulus to support the ongoing recovery.

The US dollar wavered today ahead of the second day of testimony by Jerome Powell. In the first testimony, he said that the US was still experiencing an uneven recovery since many states are still suffering from the pandemic. As a result, he said that the country needed more fiscal and monetary stimulus in the near term. Still, investors are worried about the upcoming stimulus and its ability to stimulate inflation. This would in turn push the bank to hike interest rates.

The price of crude oil is falling ahead of the official EIA inventories numbers. Economists expect the data to show that US stocks declined by more than 5 million barrels last week after falling by more than 7.2 million barrels a week before. However, this could change. In a report yesterday, the American Petroleum Institute (API) said that the number of inventories rose by more than 1 million barrels. The price is also falling ahead of an important OPEC+ meeting that will take place next week.

XBR/USD

The XBR/USD price declined to an intraday low of 63.59 and then pared back some of those losses. It is trading at 64.95, which is slightly below this week’s high of 65.80. On the four-hour chart, the price is slightly below the upper side of the white ascending channel. It is slightly above the 25-day and 15-day exponential moving averages. Therefore, the pair will likely rebound to a new YTD high.

EUR/USD

The EUR/USD pair wavered today as traders waited for the second Jerome Powell testimony. It is trading at 1.2160, which is slightly below this week’s high of 1.2180. On the four-hour chart, the price has moved above the 25-day and 15-day exponential moving averages. It has also found substantial resistance at the current range. The pair also seems to have formed a double-top pattern. Therefore, there is a possibility that it will drop to the neckline at 1.2022 in the near term. A move above 1.2080 will invalidate this trend.

NZD/USD

The NZD/USD price moved above the important resistance at 0.7315 a few days ago. It continued the rally today after the RBNZ interest rate decision. On the four-hour chart, it moved above the Ichimoku cloud and is along the upper side of the Bollinger Bands. The MACD has also risen. The pair may continue rising as bulls target the next key resistance at 0.7360.