**A Comprehensive Analysis of the Forex Market Following Powell’s Speech: Key Technical Levels & Market Reaction**
*Based on the original article by Kenny Fisher for MarketPulse, with supplemental context from additional financial news sources.*
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### Introduction
The forex market has been astir following recent remarks by Federal Reserve Chairman Jerome Powell. His comments regarding inflation trends, interest rate expectations, and the US economic outlook have sent ripples not only through currency markets but also through broader global financial markets. This analysis provides a thorough examination of how Powell’s speech has influenced the major currency pairs, discusses the key technical levels traders should watch, and integrates outside context to offer a holistic view of current forex market dynamics.
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### Overview of Powell’s Remarks
Jerome Powell, addressing the US Senate Banking Committee, provided updated views on the Federal Reserve’s stance toward inflation and its policy trajectory. Markets were eagerly awaiting statements that could signal whether interest rate cuts are drawing closer or if a hawkish hold would persist.
Key takeaways from Powell’s testimony:
– **Acknowledgement of Persistent Inflation**: Despite noting some progress, Powell emphasized that inflation remained higher than the Fed’s target, discouraging premature expectations for early rate cuts.
– **Future Policy Guidance**: The Chairman maintained that the Federal Reserve would act only once it was confident that inflation is steadily moving down toward the 2% target.
– **Balanced Approach**: Powell expressed concerns about both the risks of doing too little and too much—potentially stifling economic growth or failing to contain inflation.
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### Immediate Market Impact
Powell’s comments were closely watched by investors who have been recalibrating their expectations for US monetary policy. Markets had been betting on imminent rate cuts due to weaker economic data and moderating inflation in recent months, but Powell’s measured tone suggested patience rather than urgency.
Market reactions included:
– **US Dollar Index (DXY)**: The dollar held firm in the wake of Powell’s remarks, with the DXY settling near key resistance levels. The lack of a dovish pivot provided support for the greenback.
– **Equities and Bonds**: US stock indices reacted with modest gains, while US Treasury yields showed minor fluctuations as traders digested Powell’s testament to a data-dependent approach.
– **Cross-Asset Correlations**: Other asset classes, such as gold and crude oil, remained rangebound, reflecting the market’s wait-and-see attitude.
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### Technical Analysis: Major Currency Pairs
#### EUR/USD
– **Recent Developments**: The euro has been consolidating versus the dollar due to a mixed bag of eurozone economic releases and Powell’s noncommittal stance. EUR/USD traded near the 1.0810 region at the time of writing.
– **Key Support Levels**:
– 1.0760: A major floor established in recent sessions
– 1.0700: Psychological support and previous swing low
– **Critical Resistance Levels**:
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