The EUR/USD price crashed in the overnight session as investors focused on a speech by Jerome Powell, the Fed chair. The pair declined to 1.1958, which is 2.32% below last week’s high of 1.2240.
What happened: In a statement yesterday, Jerome Powell insisted that the bank would maintain interest rates low as part of its pandemic response. He also said that the asset purchases would continue in its bid to push inflation to 2%. In response to the speech, US equities declined while bond yields and the US dollar rose.
Looking ahead: Today, the top focus among EUR/USD traders will be the latest nonfarm payrolls (NFP) data. Economists believe that the American economy added more jobs in February than it did in January. Furthermore, this week’s manufacturing and services PMI numbers were better than expected. Precisely, they expect that the economy added more than 182,000 jobs in January. They also expect that the overall unemployment rate declined to 6.0% in February.
EUR/USD forecast
The EUR/USD pair declined sharply in the overnight session. It landed to a low of 1.1951, which was also the lowest level on February 5. The pair seems to have formed an inverted cup and handle pattern. Also, it has moved below the 25-day and 50-day weighted moving averages (WMA).
Therefore, in my view, the price will rebound or consolidate before the NFP data and then resume the downward trend in line with the cup and handle pattern.
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EURUSD chart
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