The Euro is trading higher on Wednesday after Federal Reserve Chair Jerome Powell said the central bank will “act as appropriate” to sustain expansion as “crosscurrents” are weighing on the economic outlook. This was enough to reverse Treasury yields to the downside, weakening the U.S. Dollar.
In prepared testimony to the House Financial Services Committee, Powell said business investments across the U.S. have slowed “notably” recently as uncertainties over the economic outlook linger.
The price action indicates that Powell’s prepared testimony struck a decidedly dovish cord.
At 13:12 GMT, the EUR/USD is trading 1.1248, up 0.0040 or +0.35%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on June 25 at 1.1413. A trade through 1.1181 will change the main trend to down. This will put the EUR/USD in a position to eventually test a pair of main bottoms at 1.1116 and 1.1107.
On the downside, support is the major Fibonacci level at 1.1185.
On the upside, retracement level resistance is layered at 1.1270, 1.1278, 1.1297 and 1.1318.
Daily Technical Forecast
Earlier today, the EUR/USD held a support cluster at 1.1193 to 1.1192. This helped trigger the sharp rally. The daily chart indicates there is no resistance until the short-term Fibonacci level at 1.1270. This is followed by a resistance cluster at 1.1278.
Overcoming 1.1278 will indicate the buying is getting stronger with the next upside targets a 50% level at 1.1297 and a downtrending Gann angle at 1.1303.
Crossing to the weak side of the Gann angles at 1.1193 to 1.1192 will put the EUR/USD in a bearish position. The trigger point for an acceleration to the downside is 1.1185. Taking out this level could drive the EUR/USD into the uptrending Gann angle at 1.1150. This is the last potential support angle before the 1.1116 and 1.1107 main bottoms.