The Euro stands at the front foot in early European trading on Tuesday, as dollar eases ahead of key event today, the testimony of Fed Chairman Powell.
Fresh strength pressures again the top of 1.2260/1.2360 congestion which extends into fifth day, following strong rejection at 1.2355 yesterday.
The resistance is reinforced by 30SMA (currently at 1.2347) and converged 10/20SMA’s (1.2359/67) with sustained break here needed to generate initial bullish signal.
At the downside, range floor at 1.2260 marks initial support which guards pivots at 1.2205/1.2173 (09 Feb low / Fibo 38.2% of 1.1553/1.2555 ascend) loss of which will be bearish.
Powell’s speech today is highly anticipated as traders are looking for fresh signals about the pace of US monetary policy tightening, which could be boosted on more hawkish tone from Powell.
On the other side, a number of market participants expect milder tone from Fed chief, who will be probably optimistic on the economic outlook, but would require more patience on inflation growth which moves with lower than expected pace towards central bank’s projected level.
Overall expectations see balanced view from Powell which wouldn’t provide stronger direction signal for the dollar if that turns to be the case.
Any stronger hawkish steer from Fed today would boost dollar and risk deeper pullback of EURUSD pair from recent double-top at 1.2537/55.
Conversely, dovish stance would depress dollar and risk return to its new three-year low.
The Euro also faces several releases of important economic indicators this week, along with political events, Italian election and decision of leading political parties in Germany about coalition deal which would help Angela Merkel to secure a fourth term as chancellor.

Res: 1.2346; 1.2360; 1.2372; 1.2407
Sup: 1.2308; 1.2277; 1.2260; 1.2205