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The FxPro Analyst Team

EUR/USD Breaks Above Downtrend Resistance Ahead of Yellen’s Speech

The Fed Chair Yellen will make a speech at 18:00 GMT this evening.

Five FOMC members and Fed Chairs will make a speech in turns this afternoon, we can expect that it will cause great volatility to the dollar and the dollar crosses.

The Chicago Fed Chair Evans (FOMC voter), and the Richmond Fed Chair Lacker (FOMC non-voter) will make a speech respectively at 15:15 GMT. It will be followed by the FOMC voting member Powell’s speech, at 17:15 GMT.

Most importantly, the Fed Chair Yellen and the Vice Chair Fischer, will make a speech at 18:00 GMT. As the FOMC March 14-15 meeting is approaching, we will likely get more clues whether the Fed will raise rates, from Yellen’s upcoming speech.

Seven out of ten FOMC members scheduled to make a speech this week. So far, the Dallas Fed Chair Kaplan, and the FOMC permanent voting member Brainard have made a hawkish comment. According to the CME FedWatch tool, the probability of a rate hike in March has jumped to 77.5%.

EUR/USD bears have tested the significant near-term major support line at 1.0500 again in the past two days. The current price still holds above the level, and further breaking out the downtrend line resistance with a bullish attempt.

On the 4 hourly chart, the price has been moving from the lower band to the middle band by the Bollinger Bands indicator, suggesting the bearish momentum has waned.

The resistance level is at 1.0545, followed by 1.0560 and 1.0575.
The support line is at 1.0525, followed by 1.0515 and 1.0500.

This morning we have seen the release of the German and Eurozone Markit Services and Composite PMI figures in Feb, overall in line with expectations.

We will see the release of the US ISM non-manufacturing PMI in Feb, to be released at 15:00 GMT today, it will likely influence the strength of the dollar and the dollar crosses.

Keep a very close eye on the Fed Chair Yellen’s speech at 18:00 this evening.
With a hawkish outlook, it will likely weigh on EUR/USD and test supports.
With a dovish outlook, it will likely push EUR/USD up and test resistances.

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