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EURUSD is pushing higher today against a backdrop of USD weakness following Powell’s semi-annual testimony at Congress yesterday. Speaking at the Senate Banking Committee, Powell offered little in the way of new information, a disappointment for USD bulls who had been hoping for some fresh hawkish commentary from the Fed chairman. While Powell did note that further rate hikes were “a good guess” if the economy continues along its current trajectory, these comments were merely repeating what had been said at the FOMC and so failed to rove any fresh buying.
 

Hawkish ECB Supporting EUR

EUR remains well supported given the ECB’s firmer outlook on tightening. The bank noted alongside hiking rates last week that further tightening would be necessary as it continues to battle excessive inflation. With traders eyeing a further hike next month, EUR looks likely to continue higher near-term unless we get a fresh hawkish catalyst in the US such as an uptick in inflation or a rise in wage growth and the NFP, for example. Looking ahead today, traders will be monitoring the second half of Powell’s testimony for any other market-moving details as well as eurozone consumer confidence.
 

Technical Views

EURUSD

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The rally in EURUSD has seen the pair breaking back above the 1.0785 level and trading back up to retest the underside of the broken bull channel. This area is causing some pause in the rally for now. However, with momentum studies pushing higher, the focus is on a continuation higher near-term with 1.1126 the next challenge for bulls. 

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