Fed Chair's testimony in the US Senate is a top macro event of the day (2:30 pm BST). Jerome Powell will try to assure US lawmakers that Fed's policy tightening will not wreak havoc on the economy and that the central bank is able to deliver a soft landing. Questions from lawmakers are likely to touch on topics like the possibility of recession, tightening impact on the labor market or whether tightening was effective in bringing down inflation. While explicit comments on the level of rates are unlikely, Powell is likely to reiterate that the tightening cycle is not over yet. Text of speech is usually released around an hour and a half ahead of the hearing and volatility tends to increase during Q&A sessions.
Unsurprisingly, the event is expected to move US dollars. Taking a look at the US dollar index (USDIDX) at D1 interval, we can see that it has been trading in an upward move for some time already. A key support zone, marked with last week's lows as well as 2016 and 2018 highs, is a key to watch in the near term. If bulls manage to defend it, upward move resuming would be the base case scenario. On the other hand, should bears manage to push the price below the 103.80 area, the next target for sellers could be the 101.75 area, where the lower limit of market geometry can be found.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app
Source: xStation5
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
