The EURUSD currency pair was trading flat for the day amid a lack of fundamental triggers for the single currency as the Eurozone docket remained mostly empty. The pair gas pulled back over the past three days, but the daily movements are too tiny to write about.
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The lack of significant news releases from the European docket meant that the pair was highly susceptible to investor sentiment, which was largely neutral, as evidenced by the lack of price movements in the most traded currency pair.
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Even institutions are hesitant to commit to buying or selling the currency pair and may have taken a break from the pair following the latest rally. Looking at the American session, we can see that Fed Chairman Jerome Powell is expected to testify before Congress.
Most investors are waiting for the Fed Chair’s testimony, which is expected to signal whether the Federal Reserve is still hawkish and exactly how hawkish it is or if the Fed is bearish and how bearish it is.
Jerome Powwll’s testimony could significantly impact the EURUSD currency pair since the euro is the main currency it traded against the US dollar. The Fed’s recent pausing of rate hikes is a key concern, and many will be waiting to hear whether the pause will last much longer.
Most analysts and investors expect one more tiny rate hike from the Fed this year before a much longer pause or even a rate cut. While many still do not believe the Fed will cut rates this year, the situation could change based on the economic data released over time.
On the other hand, the European Central Bank is not expected to stop hiking rates any time soon as inflation remains high. However, the ECB has implemented measures to continue supporting the banks and financial system to avoid the same banking crises witnessed in the United States.
Therefore, there is a good chance that the euro will continue performing better than the US dollar if the Fed Chair’s testimony is bearish.
*This is not investment advice.
The EURUSD price chart.
The EURUSD currency pair was trading up 2.7 pips (0.02%), almost flat for the day amid a lack of news drivers.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.