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EURUSD Trend Reversal Stalls after Powell Remarks

EURUSD Trend Reversal Stalls After Powell Remarks
EURUSD Trend Reversal Stalls after Powell Remarks
The EURUSD has been under pressure lately as markets are expecting the Federal Reserve to continue its tapering policy and the ECB is not ready to cut rates at this time. But as Federal Reserve chair Jerome Powell pointed out on his press conference last week, these expectations are based on the Fed’s perception that inflation has been successfully controlled and this is not likely to happen soon.

This is especially true as the non-farm payrolls report released on Friday revealed that there were no additional job losses in February, suggesting that the labor market was not ready for higher rates. And although Powell did not provide any further comment on the issue, his comments were not bullish for the EURUSD as traders are looking to shift positions accordingly.

EURUSD is one of the most popular pairs in Forex because it has the highest liquidity and is widely viewed as a safe haven currency. The price action of this pair is heavily influenced by economic events that occur around the world, including the release of monthly eurozone data.

These events have a tremendous impact on the currency exchange and include a variety of important statistics, such as unemployment numbers in Europe and United States. These events are often released at the same time as other major global economic releases, so it is essential for any trader to carefully plan ahead for these upcoming events.

In addition to the release of the two central bank interest rates, the Federal Reserve and the European Central Bank also issue rate statements that can offer some insight into their future monetary policies. Traders should monitor these announcements for the direction that they might take the currency and apply technical analysis to help them make decisions on the best strategies to use in trading this pair.

The EURUSD is one of the most popular forex pairs because it has the highest liquidity and is widely traded throughout the day. The pair is also the most volatile in Forex because of the differences in interest rates between the ECB and the Federal Reserve.

Besides interest rates, the other major factors that influence the prices of the currency pairs are economic indicators and news. The CPI, which is the main component of the inflation rate in the US and EU, is an important economic indicator that is often used to predict the trend in the currency exchanges.

This is why it is imperative for every trader to closely watch the ECB and Fed rate statements as well as the US Nonfarm Payrolls report. In addition to these, any major economic or political event can have an enormous effect on the prices of the EURUSD and other currencies.

The Federal Reserve will be hosting a meeting on Wednesday. In his speech, Jerome Powell is expected to highlight the central bank’s commitment to getting inflation under control. This is an opportunity for him to strike a more hawkish tone than was seen in December’s speech where he said that the Federal Reserve would start to reduce its stimulus program as soon as it thought it had won the inflation war.