All eyes are on Fed Chair Powell’s congressional testimony

All eyes are on Fed Chair Powell’s congressional testimony

02.03.2022

U.S. currencies traded relatively firmly yesterday, with GBP/USD falling approximately 130 pips from 1.343 to 1.330.On the daily chart, GBP/USD has clearly broken below its previous high and is falling with momentum toward this year’s low of 1.316, so we should keep a close eye on whether it breaks that low just to be safe. Meanwhile, the U.S. ISM Manufacturing Index for February, released yesterday, came in at 58.6, up 1 point from the previous reading and exceeding the market forecast of 58.0.

European currencies are trading weakly as the situation in Ukraine continues to deteriorate; the euro has fallen by approximately 150 pips against the U.S. dollar, from 1.123 to 1.108. The euro/dollar pair has already hit a new low for the year, and if it breaks below 1.108 with a closing price below that level, there will be no significant support until around 1.088, so we need to keep a close eye on the market direction.

Today’s schedule includes the UK Nationwide House Price Index at 16:00 CET, the German unemployment rate at 17:55 CET, the Eurozone Consumer Price Index at 19:00 CET, and the US MBA Mortgage Applications Index at 21:00 CET, followed by the US ADP National Employment Report at 22:15 ET and remarks by Chicago Fed President Evans at 23:00 ET:Chicago Fed President remarks, at 11:30 PM US time:St. Louis Fed President remarks, at 00:00 the Canadian BOC policy rate and statement, U.S. Fed Chair Powell’s congressional testimony, at 00:30 U.S. weekly crude oil inventories, at 03:30 MPC member Tenreyro’s remarks, and at 04:00 the U.S. Federal Reserve Beige Book are scheduled to be released.I plan to keep a close eye on the direction of the US dollar while paying close attention to Fed Chair Powell’s remarks today.