**A Comprehensive Analysis of the Forex Market Post-Powell Speech: Technical Levels and Market Sentiment**
*(Adapted and expanded from the original article by Kenny Fisher on MarketPulse)*
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The global foreign exchange (FX) market is known for its dynamic nature, reacting promptly to macroeconomic indicators, central bank communications, and shifting investor sentiment. One of the most influential factors driving currency moves is the monetary stance of the U.S. Federal Reserve, specifically comments and policy signals from the Fed Chair. Recently, remarks delivered by Federal Reserve Chair Jerome Powell have had a notable impact on currency pairs, especially USD-based crosses and broader risk sentiment across FX markets.
This expanded analysis delves into the repercussions of Chair Powell’s latest speech, providing a thorough technical and fundamental overview of the major currency pairs, while integrating insights from other reliable FX commentary and research, notably including real-time analytics from sources like DailyFX.
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**Key Takeaways from Jerome Powell’s Speech**
Federal Reserve Chair Jerome Powell’s recent remarks provided clarity on the central bank’s monetary policy outlook, leading to extensive movement across FX pairs. Below are the main highlights:
– Powell indicated that policy decisions will remain data-dependent, emphasizing the importance of upcoming inflation and employment figures.
– He refrained from giving a definitive timeline for potential interest rate cuts, which the market had anticipated.
– Powell acknowledged progress in reducing inflationary pressures but suggested maintaining a cautious approach.
– The central bank’s neutral stance prompted a recalibration of market expectations, with fewer participants now expecting imminent easing.
These statements have reinforced the U.S. dollar’s position as the underlying backdrop in global currency markets.
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**Market Impact and Sentiment Shift**
The immediate aftermath of Powell’s comments witnessed broad U.S. dollar strength, as traders scaled back expectations for rapid rate decreases. The recalibration led to notable shifts in technical levels across the major FX pairs, with risk-sensitive and yield-driven currencies encountering renewed volatility.
**Primary Drivers Behind Market Reaction:**
– Ongoing resilience of the U.S. economy, reflected in recent labor and inflation statistics, bolstered the dollar.
– Cautious statements from Powell signaled that the Fed is in no rush to lower interest rates, giving the USD a yield advantage.
– Subdued risk appetite weighed on higher-yielding and commodity-linked currencies such as AUD, NZD, and CAD.
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**Technical Analysis: Major Currency Pairs Post-Speech**
Understanding the key technical levels and trends in currency pairs is essential for effective trading decisions. Below is an expanded overview of major FX pairs following Powell’s remarks:
### EUR/USD
– The pair retreated as the dollar gained, closing below significant support levels.
– Technical signals:
– Resistance sits at 1.0850 to 1.0880. Any move higher would likely test these levels.
– Immediate support is found at 1.0730, followed by 1.0700, which represents a psychologically important round number.
– RSI readings on
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