EUR/USD has found brief reprieve after Tuesday’s decline that drove the major currency pair back below 1.060. As market participants digest commentary from Fed Chair Powell’s testimony, price action has moved into a tight range, forming around 1.056.
EUR/USD Daily Chart
However, at the end of the two-day meeting, the repricing of the hawkish commentary and the lack of a fundamental catalyst helped ease the bearish momentum.
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While key psychological levels continue to provide support and resistance for the pair, a quiet economic calendar has left prices stagnant.
That being said, tomorrow brings German inflation and US NFP’s into the spotlight, providing an additional catalyst for volatility.
As inflation remains a key concern for central banks, February’s US job data could drive prices in either direction.
For the US central bank, a strong job report will likely increase the likelihood of a 50-basis point rate hike, supporting a stronger Dollar. This could drive EUR/USD lower, opening the door for a probable retest of 1.050.
In contrast, a weaker employment report could reignite the possibility for a 25-basis point rate hike, allowing the Euro to recover toward the 1.060 mark.