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Last Updated Date: 5 May 2021 @ 6:01 AM (UTC)
*Please note that all the dates are in GMT time zone

The dollar was up on Wednesday morning in Asia as fears over U.S. Treasury Secretary Janet Yellen’s comments about hiking interest rates receded.

Yellen's comments on Tuesday, suggesting that rising interest rates will be necessary to prevent the economy from overheating, also contributed to the dollar’s gains.

Yellen did clarify later that day that the comments were not predicting an imminent rate hike from the U.S. Federal Reserve, but the suggestion of a tightening monetary policy was enough to shake a market over-dependent on monetary stimulus.

Fed Chairman Jerome Powell also stated earlier in the week that the labor market is still far short of where it needs to be to start talking of tapering asset buying. Investors are now looking to the ADP National Employment Report, due later in the day, and the April employment report, including non farm payrolls, due on Friday. The Institute of Supply Management (ISM) Non-Manufacturing Purchasing Managers Index (PMI) is also due later in the day.

One challenge that remains for the dollar is a U.S. trade deficit that widened to a record $74.4 billion in March.

Overall the EURUSD market is bearish with a downside breakout likely sending trade to attack a 1.1970 weekly low. A close under 1.1970 will lead the Euro 1.1930. Current corrective rebounds trapped by 1.2050 will maintain bear forces. A close over 1.2090 (SAR) confirms the start of a reversing upturn.

Resistance 2       1.2050
Resistance 1       1.2032
Support 1            1.1990
Support 2            1.1970

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