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Feb 23 - 01:55 PM

EUR/USD - COMMENT-Powell Provides Counter To ECB Yield Concern, Supporting EUR/USD

By Christopher Romano  —  Feb 23 - 12:04 PM

EUR/USD's rally off the Feb.
5 low paused on Tuesday but bulls are likely to take control again with the help of Fed Chair Jerome Powell's comments.

Powell held a steady course in Tuesday's testimony, saying said the recovery remains far from complete and uneven and that it will be some time before policy changes are considered nL1N2KT1O9.
He also said inflation is likely to be volatile, doesn't expect it to rise to troubling levels and if unwanted inflation arises the Fed has tools to deal with.

Powell's comments weighed down the dollar slightly and helped drive U.S. 10-year yields down near 1.35%, which should help sustain EUR/USD's rally.

The Fed's steady course should counter concerns expressed by EBC President Christine Lagarde, who said on Monday that the bank was closely monitoring the recent rise in yields.

A soft dollar and sinking yields should combine with bullish technicals to keep EUR/USD bulls in charge.
Monthly RSI is rising, a monthly long legged doji is forming and EUR/USD trades above the rising 10- and 21-DMAs.

A EUR/USD rally to the 1.2350/60 zone still seems highly probable.

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Source:
Refinitiv IFR Research/Market Commentary

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