EUR/USD: Euro Floats Near 6-Month Low at $1.06 as Powell Says Inflation Still a Threat

Fed boss threw a curveball at forex speculators, cautioning that it might take longer before the central bank moves interest rates lower.

Key Points:

• Euro trades near six-month bottom.
• Fed boss Powell rattles dealmaking.
• Euro under all major SMAs.
• The EURUSD pair extended its decline early Wednesday, briefly floating near a six-month low of $1.0600. Determined bulls helped lift the mood, leading to a rebound in the euro to hit levels around $1.0650. The predominant trend in the volatile pair remains bearish with little major news on deck for the rest of the week.
• Once again, in true Powell fashion, Federal Reserve Chair Jay Powell shook up the investment landscape. On Tuesday, the central bank boss pushed back against expectations for an early interest rate cut. Speaking at a conference, he said that the Fed needed more data pointing to a falling inflation before trimming borrowing costs.
• And with that, the US dollar moved up across the board, causing more pain to short-sellers and trend-reversal seekers. A ray of hope, however, has appeared, with the euro looking to snap a six-day losing streak against King Dollar. In the longer term, the pair is pressured under all major simple moving averages, including the 200-day SMA, standing at $1.0824.