EURUSD fell during yesterday session, breaking below the upward trend line and the lows from the past couple of weeks amid jitters minutes before the testimony of Fed Chair Yellen before the US Congress.
Yellen pointed to the considerable slack still evident on the US labor market. “Too many Americans remain unemployed,” she stressed adding that in the meantime inflation remained below the 2% target.
She signaled that if the employment situation improved at a quicker pace than currently estimated, rate hikes could come earlier than projected by the FOMC at the moment, but still she saw rates remaining at low levels long after the withdrawal of QE.
However, there is a significant support zone from 1.3525 to 1.3476, market will try to test that area and find buyers.
Expecting downward move to daily support at 1.33525 on a break below the previous day low at 1.3560 (scenario 1) or wait for a pullback to the upward trend line at 1.3612 (scenario 2).