Testimony by the Fed Chair Powell: upbeat for the USD?

Testimony by the Fed Chair Powell: upbeat for the USD?

What?

The head of the Federal Reserve Jerome Powell will testify on the Semiannual Monetary Policy Report before the House Financial Services Committee at 17:00 MT time on Tuesday and Wednesday.

Why is that important?

The Federal Reserve Chair may provide some insights into the possible changes to the current monetary policy by the bank and highlight the current risks for the economy. If Mr. Powell positive comments, the USD will rise. Alternatively, the acknowledgment of the negative outlook will weaken the US dollar.

What to expect?

Analysts anticipate Jerome Powell to stick to his words and provide generally upbeat comments. As a potential risk, we expect the Fed Chair to highlight the impact of coronavirus on the global economy. All in all, the Fed has already indicated the steadiness in the interest rates during the previous meeting. Thus, we don’t expect a major turn in the monetary policy stance for now.

Also, the market is awaiting the Fed to announce the changes to the inflation approach during this year. That’s why more clues on whether this shift to dovishness will happen may pull the USD down.  The Fed’s future plans concerning its balance sheet will be followed, too.

The levels of EUR/USD and USD/JPY

On the H4 chart of EUR/USD, we can see that the pair broke the lower border of the descending trading channel, but found the last September’s support at 1.0903. If Mr. Powell provides hawkish comments, the USD will get stronger and we may see a breakout of that level. This action may provoke the fall towards 1.0884. If the Fed Chair is dovish in his views, the pair may return into the descending channel. In that case, the 1.094-1.095 levels will be favorable for bulls.  

EURUSDH44656.png

Now let’s look at the H4 chart of USD/JPY. The pair has strengthened since the beginning of the day but still could not reach the 110 level. In case of optimistic Fed comments, pay attention to the retest of the 110 level. Alternatively, a fall below the 109.82 level to the support at 109.67 will be inevitable.

USDJPYH4ghgh.png

LOG IN

Similar

Latest news

Deposit with your local payment systems

Learn more

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Internal error. Please try again later

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera