A testimony by the Fed Chairwoman before U.S. Congress was in focus this week. She was cautious. Yellen noted that further interest rate hikes will depend on the incoming economic data, adding that there is a risk from developments abroad to the U.S. economy. The Fed chairwoman noted that "financial conditions in the United States have recently become less supportive of growth".
It is likely that the Fed will not raise its interest rate in March if the U.S. economic data will not improve significantly in February and in the first half of March.
Oil prices remained volatile and will likely have an impact on the Fed's monetary policy decision. Market participants hope that oil producers will cut their oil output and stabilise the oil market.
Oil prices will remain volatile until a deal on an oil output cut is reached.
It is likely that the currency pair EURUSD will rise toward the resistance level at $1.1400, if the U.S. economic data will be negative or there will be negative news from China and no negative news from the Eurozone.
If the U.S. economic data will be positive and in case of the negative news from the Eurozone, the currency pair EURUSD may test the support level at 1.1161 or at level at 1.1100.
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