EUR/USD unable to break 1.2170, approaches daily lows
- US dollar trims losses as Powell testifies, no surprises.
- EUR/USD in negative territory supported above 1.2130.
The EUR/USD pair bonce to 1.2166, after the first comments from Fed’s Powell and then pulled back to the 1.2150 area. It is falling modestly for the day after hitting earlier on Tuesday at 1.2180, the highest level in four weeks.
The greenback weakened after Powell’s initial testimony and then recovered. The Fed Chair did not offer surprises, and repeated monetary policy will remain accommodative. He is answering questions from lawmakers.
In Wall Street, stocks recovered but now seem to be softening again. The Dow Jones is falling by 0.55% and the Nasdaq 2.18%. US yields dropped from 1.38% to 1.34%, favoring a rebound in metals.
Markets are moving without a clear trend, while risk aversion appears to be gaining momentum. If market sentiment deteriorates, the greenback could benefit further.
Down for the day, still above key level
The positive momentum for the euro eased on Tuesday, but EUR/USD still remains above 1.2130 and, more important, 1.2110. A slide below 1.2110 would point to further losses. The next strong support stands at 1.2080.
On the upside, a recovery back above 1.2160 should clear the way to more gains and a possible test of the recent high of 1.2180.