💰Gold falls, USD surges on Powell comments❗

Powell: It is time to retire "transitory" for inflation

Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell testify before Congress and their comments cause some movement on the markets. During the Q&A session Powell admitted that it is time to retire the term "transitory" for inflation. FED Chair said that expects high inflation through mid-2022, however the central bank will use tools to stop entrenched higher inflation.

Baseline expectation sees inflation moving back down over the course of 2022. Powell also said that it is appropriate to talk about speeding up taper at the coming meeting, despite ongoing Omicron fears.  When it comes to the labour market, Powell is very surprised that labor force participation has moved sideways and believes that it will take longer to get labor force participation back. The dollar strengthened following his comments, while indices and precious metals took a hit and US yields move higher.

Looking technically at the US100 chart on the H1 interval, we can observe a clear rejection of the resistance at 16,440 pts. The index fell from this level by almost 200 points! Currently, 16,250 pts level, which is market with previous price reactions, may act as key support. Should a break lower occur, downward move may deepen. On the other hand, if buyers manage to halt declines then another upward impulse towards resistance at 16,440 pts may be launched. Source: xStation5

We also observe significant price movements on the main currency pair. EURUSD plunged around 100 pips.EURUSD interval M15. Source: xStatin5