{"id":122336,"date":"2018-02-27T08:05:18","date_gmt":"2018-02-27T13:05:18","guid":{"rendered":"http:\/\/countingpips.com\/?p=122336"},"modified":"2018-06-01T15:42:18","modified_gmt":"2018-06-01T15:42:18","slug":"anticipation-builds-ahead-of-powell-testimony","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/02\/anticipation-builds-ahead-of-powell-testimony\/","title":{"rendered":"Anticipation builds ahead of Powell testimony"},"content":{"rendered":"
February 27, 2018<\/div>
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Article by ForexTime<\/a><\/p>\n

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There is a huge sense of anticipation across financial markets today, as investors brace for Federal Reserve Chairman Jerome Powell\u2019s first congressional testimony later in the day.<\/p>\n

Powell\u2019s debut appearance is a big deal and could offer investors a rare opportunity to carefully assess the Federal Reserve\u2019s monetary policy approach under the new chair. Markets will scrutinize Powell\u2019s every word, especially his views on inflation and where he sees interest rates this year. Expectations are that he will express optimism over the economic outlook and as such, this could support the Dollar.<\/p>\n

With global equity markets still highly sensitive to fears of rising inflationary pressures and higher interest rates, there is a strong suspicion that Powell will choose his words very carefully. If he succeeds in striking an overall balanced view to Congress, market players, who were expecting fireworks, may be left empty-handed. There still remains a possibility of equity bears making an unwelcome appearance if the testimony results in stimulating expectations of four US interest rates hikes this year.<\/p>\n

Taking a look at the technical picture, the Dollar Index struggled for direction during Tuesday\u2019s trading session with prices steady around 89.80 as of writing. The Index still remains pressured below the 90.55 lower high. Sustained weakness below 90.20 could encourage a decline back towards 89.60 and 89.00, respectively. Alternatively, a breakout above 90.20 may invite an incline higher towards the 90.55 level.<\/p>\n

Currency spotlight \u2013 GBPUSD<\/strong><\/p>\n

Sterling\u2019s explosively volatile price action continues to highlight how increasingly sensitive the currency has become to monetary policy speculation.<\/p>\n

It\u2019s remarkable how Pound bulls initially entered the trading week with a renewed sense of confidence to attack, following hawkish comments from Bank of England (BOE) deputy governor Sir Dave Ramsden. The lack of inspiration to push prices higher on Monday afternoon was an invitation for bears to re-enter the scene. With the Dollar finding support from expectations of higher US interest rates, the GBPUSD could be exposed to downside losses. From a technical standpoint, the GBPUSD remains pressured below the 1.4000 resistance level. A failure for prices to break above 1.4000 could result in a decline back towards 1.3900 and 1.3850, respectively.<\/p>\n

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Commodity spotlight \u2013 Gold<\/strong><\/p>\n

Gold was on standby during Tuesday\u2019s trading session with prices trading around $1333 ahead of Jerome Powell\u2019s debut address to Congress.<\/p>\n

It seems that the heightened expectations of higher US interest rates have left the yellow metal vulnerable to heavy to losses. Investors should keep in mind that Gold is a zero-yielding asset, and is likely to remain depressed and unloved in a high interest rate environment. Bears could drag Gold prices lower today, if markets interpret Jerome Powell\u2019s first congressional testimony as hawkish. From a technical standpoint, technical traders will continue closely observing how prices react around the pivotal $1340 level. Repeated weakness below $1340 could encourage a decline back towards $1324.15. A situation where bulls are able to push Gold above $1340 may invite an incline higher towards $1360.<\/p>\n

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Disclaimer:\u00a0<\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime There is a huge sense of anticipation across financial markets today, as investors brace for Federal Reserve Chairman Jerome Powell\u2019s first congressional testimony later in the day. Powell\u2019s debut appearance is a big deal and could offer investors a rare opportunity to carefully assess the Federal Reserve\u2019s monetary policy approach under the […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-122336","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/122336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=122336"}],"version-history":[{"count":3,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/122336\/revisions"}],"predecessor-version":[{"id":122339,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/122336\/revisions\/122339"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=122336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=122336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=122336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}