💲USD weakens after Powell comments

USD fell sharply and stock indexes moved higher after Powell remarks before the Senate dashed markets' expectations for a more hawkish approach. Fed’s chairman said that there will be a long road to normal and that the balance sheet should runoff later this year, while the impacts of the covid-19 on the labor market may be short-lived. Still, inflation worries remain and the Fed will keep adopting the necessary measures to tame the sharp increase in prices.

USDJPY pair moved higher early in the session, however buyers failed to break above the downward trendline which coincides with the upper limit of the 1:1 structure. Moods worsened during FED Chair Powell hearing and the pair broke below the support at 115.45 which is marked with 23.6% Fibonacci retracement of the upward wave launched at the beginning of December 202, 50 SMA (green line) and 200 SMA (red line). If current sentiment prevails, downward move may accelerate towards 114.90 level. Source: xStation5