Dollar Down After Yellen’s Testimony

Yesterday, the EUR/USD rose after Janet Yellen’s testimony. Despite noting that the Fed would try to end bond purchases by the fall, Yellen mentioned that there was an unusually high number of unemployed people and that interest rates may remain low – 2 things that made traders less optimistic about the dollar. At the moment, the pair seems to be climbing again due to better than expected German retail sales data. This movement could continue until the Eurozone CPI and unemployment data comes out at 10:00 GMT. Also keep an eye out for US GDP and pending homes sales data at 13:30 GMT. Look for support at 1.3697 and resistance at 1.3707.

In light of Yellen’s testimony yesterday, the USD/JPY has gone down a bit as investors were bearing on the dollar. A little earlier, the pair retraced some of its losses but now appears poised to continue moving downward. Also note that the recent strength of the yen due to better than expected Japanese Industrial Production, Household Spending, and Retail Sales data is a significant source of downward movement. Consequently, the downward activity may continue for a little bit longer. Look for support at 101.65 and resistance at 101.74.