EUR/USD bears move in to test bull's commitments below 1.0600

• EUR/USD eases back from the 1.06 mile stone and overnight highs. 
• US Fed Chair Powell testified to Congress and emphasised the Fed’s determination to bring inflation back to target (2.0%). 

At 1.0570, EUR/USD is flat on the day with the market giving back a little ground that was made overnight in the absence of a bid in the US dollar and a bias towards the euro.

The European Central Bank's monetary policy committee meets next on July 21 when it is expected to begin its tightening cycle and the euro looked cheaper on the back of a less hawkish outcome from Wednesday's testimony from the Federal Reserve's chairman.

The greenback slipped up as US Treasury yields slid on worries that the US economy could slide into recession. Fed Chair, Jerome Powell said at a hearing of the US Senate Banking Committee that higher rates are painful but are the means the US central bank has to slow inflation.

Powell said that the Fed is not trying to engineer a recession to heel inflation but is fully committed to bringing prices under control. He was adamant that this was more important that the risks of an economic downturn.

During his testimony in the Senate on Wednesday, Powell made no mention of the size of future hikes, but he did admit that the Fed had failed to do its job and that it would be difficult to engineer a soft landing. ''The Fed will not take any rate action off the table and will do what it needs to do, Powell said. Powell noted that the magnitude of future rate rises will depend on the incoming data and outlook for the economy. He said achieving a soft landing will be difficult, but it remains their expectation,'' analysts at ANZ Bank said,

Meanwhile, the US 10-year yield dropped like a stone by 14.7 basis points to 3.16%, extending a decline from 3.49% last week that followed the move by the Fed when the central bank lifted its target rate range by the most in three decades in a 75 basis points hike. 

The US dollar index, DXY, fell 0.31% off the bat, with the single currency up 0.47% at 1.0574 before climaxing around 1.06 the figure. The high of the day was 1.0605. 

Nevertheless, stocks on Wall Street turned lower in volatile trade as investors weighed Federal Reserve Chair Jerome Powell's commentary. The Dow Jones Industrial Average lost 0.2% to 30,483.13, the S&P 500 was 0.1% worse off at 3,759.89, and the Nasdaq Composite was losing some 0.2% to 11,053.08.