The currency market got off to a cautious start before the testimony from Federal Reserve's Janet Yellen. The U.S. dollar was little changed against the euro and pound on Monday and while the euro took a dip below the 1.06-level, we still cannot speak of a significant downside breakout. The pound sterling tested the 1.2440-support after U.K. Consumer Prices fell short of expectations. Whether the recent downtrend will last remains to be seen.
The euro was hovering around the 1.06-mark earlier this morning and we still wait for a sustained break below the 1.0580-support. Once that level is breached we expect further losses toward 1.0550 and 1.0520. On the upside, the 1.0650-level may limit potential gains but today's price action will hinge on Yellen's testimony. The German ZEW Survey and Eurozone GDP figures had however no major impact on the euro.
The Fed chair will start testimony in Congress in Washington at 15:00 UTC. While Yellen is not expected to give any clear hints as to the timing of the next rate hike, her comments on monetary policy could trigger larger market moves.
Here are our daily signal alerts:
Long at 1.0630 SL 25 TP 20, 40
Short at 1.0580 SL 25 TP 20, 40
Long at 1.2560 SL 25 TP 30, 90
Short at 1.2490 SL 25 TP 30, 60
We wish you good trades and many pips!
Disclaimer: Any and all liability of the author is excluded.
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