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EUR/USD virtually unchanged after Yellen’s remarks

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• EUR/USD traded virtually unchanged after Fed Chair Yellen suggested that the Fed will not rush into hiking rates and that they will consider such a move on a “meeting-by-meeting” basis after they change the guidance. The rate continues to oscillate between the key support line of 1.1260 (S1) and the resistance of 1.1540 (R2), thus I still consider the short-term path of the pair to be to the sideways. Today Yellen testifies again, this time to the House of Representatives. Her speech will be the same as yesterday, so the market will focus on what questions she receives. If we get no new information, the rate is unlikely to exit the sideways range. With regards to the broader trend I believe that the pair is still in a downtrend. EURUSD is printing lower peaks and lower troughs below both the 50- and the 200-day moving averages. Nevertheless, I will maintain the view that only a break below 1.1260 (S1) could turn the bias back to the downside and perhaps open the way for another test at 1.1100 (S2), defined by the low of the 26th of January.

• Support: 1.1260 (S1), 1.1100 (S2), 1.1025 (S3)

• Resistance: 1.1450 (R1), 1.1540 (R2), 1.1650 (R3)

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