EUR/USD and GBP/USD rally while USD/JPY slumps in wake of Powell testimony
Fed chairman Jerome Powell has cleared the way for a rate cut this month, and his dovish testimony has pulled the rug out from underneath the dollar.
EUR/USD rebounds from $1.12
EUR/USD has rallied from $1.12, finding support in this area as the dollar weakened following Federal Reserve (Fed) chair Jerome Powell’s testimony. Further gains above $1.13 reinforce the bullish view and open the way to $1.14.
A bearish view would argue that the price, having fallen below trendline support at the end of last week, will now run into resistance at the same trendline. A failure to recover $1.128 would suggest more losses to come.
GBP/USD risks creating a lower high
GBP/USD too managed a strong rally from the low at $1.245 but already the price is running out of steam, and may provide a selling opportunity if a lower high is created around $1.253.
A fresh push lower would target $1.245 in the near term. Further gains head towards $1.259, which was both support and then resistance during the early part of July.
USD/JPY gets Powell-d
USD/JPY has also fallen below rising trendline support, and now a rebound to ¥108.40 may provide a selling opportunity. Further declines head towards ¥107.50.
A recovery above ¥108.40 would clear the way to another push to ¥109.00, the high seen yesterday before Powell’s testimony. At present the low seen overnight is a higher low compared to the early-July low, so some bullish momentum may emerge from here.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
