- The dollar extends the decline throughout the market.
- Powell: Rate hikes aren’t going to bring down gas or food prices.
- EUR/USD is approaching major short-term resistance.
The EUR/USD extended the advance after the first comments of Jerome Powell, the president of the Federal Reserve in the presentation of the weekly monetary policy report. The pair rose to 1.0570, marking a new high for the day.
The dollar remains weak in the market, supported by the permanence of the EUR/USD near the highs of the day. In case of extending the advance Euro would face resistance ahead at the 1.0600 area. If confirmed above, it would be positioned for more raises.
From the daily low of 1.0468, the EUR/USD rose more than 100 pips. The initial fall had occurred in a context of risk aversion, which boosted the demand for the dollar. This scenario changed, with a drop in Treasury bond yields and a rebound in share prices.
Fed Chairman Powell claimed that raising interest rates would not lower fuel or food prices. He expressed that the market’s positioning for more raises is appropriate.
Powell’s words led to further weakness in the dollar, which has not only erased gains but is trading in negative territory against most currencies, excluding those linked to commodities, which are affected by the drop in the price of commodities and oil.
Technical levels
Source: Fx Street
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