EUR/USD – Euro Flat as Yellen Remarks Tempers Markets

EUR/USD is calm on Wednesday, as the pair trades in the mid-1.13 line in the European session. On the release front, there are no economic events out of the Eurozone, but ECB head Mario Draghi will testify about the ECB Annual Report in the European Parliament. In the US, Federal Reserve head Janet Yellen continues a second day of testimony in Congress. The US will release New Home Sales, with the markets expecting a softer reading in the January report.

Janet Yellen testified before a Senate committee on Tuesday, saying that the Fed was “unlikely” to raise interest rates in the next few months, given current economic conditions. Her remarks seemed aimed at quelling rising speculation about a rate hike sometime in mid-2015, which has helped boost the US dollar’s performance against its major rivals. Yellen noted that the continuing growth should lead to the unemployment rate continuing to fall. The Fed Chair will resume testimony before the House Financial Services Committee on Wednesday, but it’s not likely that Yellen will say anything that could shake up the markets.

On the Eurozone front, Greece’s list of economic reforms was accepted by the country’s creditors on Tuesday, paving the way for an extension of the bailout for another four months. The Greek government has promised to continue with privatization plans and to meet budget targets. Still, the extension is a stop-gap measure and with sharp differences remaining between Greece and its creditors, the bailout crisis is far from over.

EUR/USD for Wednesday, February 25, 2015

EUR/USD February 25 at 11:00 GMT

EUR/USD 1.1348 H: 1.1388 L: 1.1339

 

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.1154 1.1231 1.1340 1.1426 1.1525 1.1634

 

  • EUR/USD was flat in the Asian session. The pair posted gains in the European session but has since retracted, putting pressure on support at 1.1340.
  • 1.1340 remains a weak support line. Will the pair break below this line during the day? 1.1231 is stronger.
  • 1.1426 is an immediate resistance line.
  • Current range: 1.1340 to 1.1426

Further levels in both directions:

  • Below: 1.1340, 1.1231, 1.1154, 1.1066 and 1.0909
  • Above: 1.1426, 1.1525, 1.1634 and 1.1754

 

OANDA’s Open Positions Ratio

EUR/USD ratio is pointing to gains in short positions on Wednesday, continuing the direction seen a day earlier. This is not consistent with the lack of movement shown by the pair. The ratio is pointing to short positions, indicative of trader bias towards EUR/USD losing ground.

EUR/USD Fundamentals

  • 15:00 US Federal Reserve Janet Yellen testifies.
  • 15:00 US New Home Sales. Estimate 471K.
  • 15:30 US Crude Oil Inventories. Estimate 3.6M.
  • 16:30 ECB President Mario Draghi Speaks.

*Key releases are highlighted in bold

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.