EUR/USD ready to push below 1.1000 after Fed’s Powell remarks

• The common currency slides some 0.34% as the New York session is about to expire.
• Risk-aversion keeps market players underpinning the greenback as US Treasury yields rise.
• EUR/USD Price Forecast: Downwards and a break below 1.1000 would exacerbate a renewed test of the YTD low around 1.0806.

The shared currency retraces from daily highs around 1.1070s, reflecting the risk-aversion of market players, as peace talks between Russia-Ukraine languish, as Fed and ECB speakers crossed the wires amid an absent economic docket. At 1.1017, the EUR/USD portrays the US dollar strength.

Fed Chair Powell, send 5s above 10s on hawkish remarks

Late in the New York session, the EUR/USD dropped as Federal Reserve Chief Jerome Powell spoke at NABE annual conference. At the same time, the US Dollar Index, a gauge of the greenback’s value vs. a basket of six majors, advances 0.27%, sitting at 98.502, while US Treasury yields rise sharply, with the 5-year sitting at 2.336%, higher than the 10-year T-note yield at 2.319%.

Jerome Powell said that the Fed would take the “necessary steps” to tame inflation towards the bank’s target of 2%, even if it needs to hike rates more than 25 basis points at a meeting or meeting. Furthermore, Powell added that “if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.”

Aside from this, some ECB speakers crossed the wires earlier in the European session. Vice President Luis de Guindos said that inflation is to stay firm longer than seen before. At the same time, ECB’s Klaus Knot noted that a hike this year is “realistic” in the same tone as ECB’s Holzmann, who said that a rate rise could send a clear message that the ECB is committed to tackling inflation, even before ending the QE.

Meanwhile, ECB’s President Madame Lagarde said that bottlenecks, energy, and food were pushing short-term inflation and added that the Ukraine war would have growth consequences in the Euro area.

Read more:

• Fed Chair Powell: Reiterates expectations that at the coming meeting will begin balance sheet reduction
• Fed Chair Powell: I don’t see an elevated likelihood of a recession in the next year

EUR/USD Price Forecast: Technical outlook

The EUR/USD bias is downwards, as shown by the daily chart. Even though in the last week, the common currency recovered some ground, the uptrend stalled at the mid-parallel line between the central and top Pitchfork’s parallel lines, around the 1.1100 mark, retreating to the 1.1000 area, as EUR/USD bears aim to push the pair towards the 1.1000 figure.

The euro’s first support would be 1.1000. A sustained break would expose the confluence of Pitchfork’s central line and the 1.0900  mark, and then the YTD low March 7 low at 1.0806.