Today’s number one topic is Janet Yellen’s testimony, and traders will try to anticipate what kind of comment the new head of the FED will give; “hawkish” or “dovish”. Recent good macro data from the US (NFP and GDP) increased the speculation that the FED might start tapering sooner than later. Yellen is rather known to be dovish, as well as most of the voters in the FED, so any hawkish comment, despite the data, should come as a surprise.
EUR/USD Hourly Chart" title="EUR/USD Hourly Chart" width="995" height="411">
Ahead of the European session, the price is above the very important support at 1.3450 which recently played as a crucial resistance. An upswing stopped just below the 38.2 Fibonacci level and it will currently be the closest resistance. Other important supports are the 23.6 Fibonacci and the blue line connecting recent higher lows. Breaking the latter one will have a negative impact on this pair and should start another bearish wave. Short term situation is more bullish and will stay that way as along as price stays above the 1.3450.