EUR/USD clings to 1.2300 on Powell, US data disappoint
- The pair briefly tested 1.2290/85 just to rebound afterwards.
- DXY leaps to fresh tops above the key 90.00 handle.
- Fed’s Powell sees further gradual rate hikes in the next months.
Volatility is picking up pace around EUR/USD today following Fed Powell’s Humphrey-Hawkins hearings.
EUR/USD offered near 1.2300
Spot has given away initial gains on Tuesday in response to a renewed pick up in the buying interest around the buck following Powell’s first congressional testimony.
Fed’s Powell stressed the economic outlook remains strong while he sees the tightening cycle continuing at a gradual pace over the 2018-2020 period.
Powell noted that wages should increase at a faster pace while he did not appear concerned over financial market volatility. He also suggested that the gradual reduction of the accommodative monetary conditions should prop up the solid labour market and lift prices towards the inflation target.
On the positioning front, US Durable Goods Orders contracted 3.7% MoM in January and the trade deficit widened to $74.4 billion during the same period.
In the meantime, the pair manages well to keep the 1.2300 milestone for the time being despite a buyers continue to flow into the buck.
EUR/USD levels to watch
At the moment, the pair is losing 0.09% at 1.2306 facing the immediate support at 1.2260 (low Feb.22) followed by 1.2206 (low Feb.9) and finally 1.2165 (low Jan.18). On the other hand, a break above 1.2361 (21-day sma) would target 1.2366 (10-day sma) en route to 1.2537 (high Jan.25).