has room to extend recent gains but bulls will tread cautiously ahead of Fed Chair Powell's testimony to Congress on Tuesday and Wednesday and also euro
data. The U.S. decision to delay additional tariffs on China and news on Friday that Fitch Ratings affirmed Italy's BBB
rating have underpinned the current EUR/USD
lift. Bulls are particularly careful because euro
zone growth remains precarious at best, adding weight to Powell as a dollar driver and upcoming data. Traders expect Powell to reiterate the Fed's patient stance and data dependence and will listen for comments hinting at how long Fed balance sheet
reduction will last. Euro
zone February HICP is an important ECB data point. A downside surprise could see lead the central bank
take steps towards altering its forward guidance or move closer to new TLTROs.