EUR/USD Downturn Continues Following Powell's Remarks on Fed Policy and Inflation

The EUR/USD took a decisive downturn after Federal Reserve Chair Jerome Powell's comments, moving toward weekly lows and showing a bearish trend. Although European Central Bank (ECB) officials briefly supported the euro, the market expects unchanged interest rates with debate focusing on the timing of a potential rate cut. This ECB support is likely to weaken as long as the US economy outperforms the Eurozone. US fundamentals favor the dollar, as emphasized by Powell's recent remarks.

Powell expressed the Federal Open Market Committee's (FOMC) lack of confidence in current monetary policy's ability to curb inflation to 2%. He also warned of potential inflation "head fakes," resulting in a stronger US dollar and surging bond yields.

US yields had already been rising before Powell's speech, possibly marking the end of a bond rally. The market will continue to assess Powell's speech, while the University of Michigan Consumer Sentiment survey adds to Friday's economic data.

EUR/USD experienced a sell-off yesterday and is relatively subdued today. The outlook remains uncertain, with a lack of clarity on short-term support levels. However, there is a possibility that the 1.0550 level could provide support, while the next resistance level stands at 1.0750.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1040	1.0930	1.0800	1.0630	1.0550	1.0450