The EUR/USD pair dropped to the lowest level since February,09. The pair fell as the dollar strengthened against the Euro following hawkish statements from the new Fed chair.
In his first testimony to congress, Powell indicated that the Fed would raise the rates about four times. This was unlike how the analyst community thought that the Fed would tighten for three times. This was unexpected.
In his statement, Powell appeared bullish about the economy but steered away from the concerns about the deficit.
Today, Powell will address the senate committee in which he is likely to continue with hawkish statements. As a result, the treasury yields rose with the 10-year rising above 2.9%.
With the currency pair currently at a support level, traders should watch out for a breach. If it goes below 1.2204, there is a likelihood that it might continue to head lower. However, there is a likelihood that the pair could start rising, potentially to above 1.2350.