FX News - Feb 28 2014: Yellen Statement Weakens USD

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Fed Chairperson Janet Yellen’s dovish testimony led to a weaker greenback late in yesterday’s session. She emphasised the need for the Fed’s constant monitoring of the economy in order for them to decide their next move with their QE tapering.

The statement had a significant impact on a number of pairs, including the AUD/USD. In yesterday’s Asian session, the pair suffered a blow after Australia posted poor Capex data. The news dragged the pair to a session low of 0.8904. However, it showed some resilience as it bounced back later in the day with Ms Yellen’s statement. It opened today’s Asian session at 0.8960, and has so far peaked near the 0.8990 area. It is currently trading at 0.8964, with initial resistance seen at 0.8966, followed by 0.8988. Meanwhile, initial support is at 0.8896, followed by 0.8874.

The EUR/USD, meanwhile, suffered heavy losses yesterday, partly due to the continuing political unrest in Ukraine. This led the pair to its weakest performance this week as it bottomed out at 1.3643 around the time of yesterday’s European session. It received a massive boost, however, after Ms Yellen’s speech as the pair made a quick spike above the 1.3700 area. It remained steady at the 1.3710 zone at the end of the US session, which persisted until today’s Asian session. It is currently trading at 1.3707, with initial resistance seen at 1.3762, followed by 1.3796. Meanwhile, initial support is at 1.3676, followed by 1.3642.

The pound received a similar boost yesterday after the GBP/USD pair sank to a session low of 1.6619. It then peaked at 1.6698, after which it hovered within the 1.6680-1.6690 range. It is currently trading at 1.6680, with initial resistance at 1.6734, followed by 1.6776. Meanwhile, initial support is at 1.6650, followed by 1.6608.

By FX Strategy Team, Published on 28th of February 2014
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