18 July 2018 ( Lagos ) : Dollar bulls were instilled with a renewed sense of confidence after Federal Reserve Chairman Jerome Powell struck an upbeat tone on the US economy during his first Congressional testimony.

Powell’s optimistic views on economic growth, the US jobs market and inflation simply reinforced the bullish sentiment towards the US economy. When queried about global trade tensions, the central bank head picked his words carefully by stating that it would be difficult to predict the consequences these could have on the economy. A key takeaway from the first day of Powell’s testimony was his comments on how it was best “to keep gradually” raising interest rates. The Dollar is likely to continue extending gains as market expectations mount over the Fed hiking interest rates two more times this year.

Currency spotlight – EURUSD

An appreciating Dollar has sent the EURUSD lower today with prices trading around 1.1620 as of writing.

The outlook remains bearish on the daily charts with 1.1600 acting as the first point of interest. A solid breakdown below this level could encourage a decline towards 1.1550. Alternatively, a move back above 1.1660 could trigger a move towards 1.1745.

Source: Lukman Otunuga, Research Analyst at FXTM

Reporting for EasyKobo on Wednesday, 18 July 2018 in Lagos, Nigeria