Powell’s testimony helps boost the US Dollar

The dollar rallied yesterday after Chairman Powell said the Fed will continue to slowly raise interest rates for now . Powell stated, the reason was to keep inflation near its target amid robust conditions in the U.S. labour market. Comments like the job market has strengthened and inflation has increased mostly due to gasoline and energy prices stood out. He also added unemployment was at it’s the lowest and that the US economy grew in a solid pace the first half of the year. With basically a revision of the positive economic outlook in the US the USD bulls were set free during the American session.

EUR/USD dropped during Powell testimony and landed very near our 1.1640 support level. Today, in the European morning the pair could follow up on sideways movement as the financial data to be released from the Euro-zone could be neutral for the common currency. However, in the American session the pair may prove to be sensitive to the US financial data to be released or Fed Chairman Powell testimony later on. Should the pair find extensive buying orders along its path we could see it rising and breaking the 1.17150 resistance line. Should it come under selling interest by the market, we could see the pair aiming for the 1.1640 support barrier.

At this point, a small comment must be made on Crude Oil, as the commodity has dropped approximately $5 in the past 7 days. The Trump Putin meeting plunged Oil prices as comments made from both presidents indicated a joint attempt to regulate Oil prices. Also the US considerations on waivers on countries importing Oil from Iran helped drop prices.