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  • Powell reiterates to act as appropriate to sustain economic growth.
  • Dovish comments revive hopes for aggressive policy easing by the Fed.
  • The USD weakens across the board and exerts some downward pressure.

The USD/JPY pair finally broke down of its daily consolidative trading range and dropped to fresh session lows, around the 108.70-65 region in the last hour.

The US Dollar extended its intraday pullback from multi-week lows in reaction to the Fed Chair Jerome Powell’s prepared remarks for the congressional testimony, reiterating that the central bank will act as appropriate to sustain US economic growth.

Powell further added that uncertainties since June FOMC have continued to dim the outlook and there is a risk that weaker inflation will be even more persistent than the central bank currently anticipates, reviving hopes for an aggressive rate cut move.

The downside, however, remained limited, at least for the time being as investors look forward to the question and answer session, where Powell’s comments could further infuse volatility and produce some meaningful trading opportunities.

Technical levels to watch