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Could Powell bring dollar weakness for EUR/USD, GBP/USD and USD/CAD?

EUR/USD consolidates, while dollar weakness could come into play for GBP/USD and USD/CAD.

EUR/USD continues to consolidate, as it hits trendline support

EUR/USD remains within consolidation mode, with the pair trading largely sideways over the course of the past week.

That has shown little sign of changing, yet it may take todays Federal Reserve (Fed) chairman Jerome Powell appearance to kick-start the trend once again. For the short term, we have seen the price fall into trendline support, pointing towards a potential rebound. As such, consolidation looks likely to continue, with a break through either $1.1114 or $1.1065 to bring a more directional move for the pair. However, with the potential for a dovish outlook from Powell, the opportunity to buy at trendline support looks attractive.

GBP/USD rebound brings more bullish sentiment

GBP/USD is losing ground this morning, yet the bullish breakout seen last year signals a potential rise to come.

That comes due to the break through $1.221 and $1.225 swing highs. With that in mind, it makes sense to watch out for a potential bullish move in the near future, with a break below $1.2107 required to bring about a more bearish picture once again.

USD /CAD rebound may not last

USD/CAD has been regaining ground overnight, with the pair regaining ground off the back of the losses seen earlier in the week.

Those declines took the pair back into the $1.3251 support level, signaling a potential impending bearish reversal for the pair. A break below that $1.3251 level would be required to bring about a reversal signal. However, with Canadian retail sales and Powell up ahead, there is a good chance that we could be seeing a retracement before the bears come back into play. With that in mind, the 76.4% Fibonacci resistance level at $1.3324 is worth watching out for as a potential reversal level.

This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.

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