<p style=““ class=“text-align-justify“>In the article, Timiraos says that „Powell is likely to caution on Capitol Hill that strong economic activity this year could lead U.S. central bank officials to raise interest rates more than they expected to combat high inflation“. Besides that, the rest is just some backdrop reading and you can check it out <a target=“_blank“ href=“https://www.wsj.com/articles/jerome-powell-to-testify-to-congress-on-outlook-for-rates-inflation-e4e7f1e3?mod=latest_headlines“ target=“_blank“ rel=“nofollow“>here</a> (may be gated).</p><p style=““ class=“text-align-justify“>As a reminder, we might be getting the text to Powell’s testimony a little earlier than his scheduled appearance. Keep an eye out for something between 1200 GMT to 1400 GMT.</p>

This article was written by Justin Low at www.forexlive.com.

<p>On the daily chart below, we can
see that the price is trending downwards in a clean way. The blue short period <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
average</a> has been acting as resistance which is a sign of a strong selling
momentum. The sellers will have the red long period moving average and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/“>trendline</a> as resistance in case the price
pulls back. </p><p>As of now, the sellers are in
control and it looks like we will have a test of the 0.6629 <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> soon. The RBA today delivered a <a target=“_blank“ href=“https://www.forexlive.com/news/aussie-lower-after-rba-offers-subtle-change-to-policy-guidance-20230307/“>dovish
hike</a> which should give the US Dollar another tailwind as the market looks
for a higher terminal rate for the Fed. In case key US <a target=“_blank“ href=“https://www.forexlive.com/EconomicCalendar“>economic data</a> like NFP and CPI comes out soft
though, we should see AUD/USD rallying as the market would reprice lower future
interest rate expectations. </p><p>On the 4 hour chart below, we can
see that the price has been ranging for about a week but today’s RBA monetary
policy announcement gave the sellers the catalyst to break out of the range. </p><p>The sellers may not be out of the
woods yet though as today we will have <a target=“_blank“ href=“https://www.forexlive.com/news/icymi-the-text-of-powells-testimony-may-be-released-ahead-of-his-appearance-20230307/“>Fed
Chair Powell testimony</a> and it’s expected that if he sounds dovish, the US
Dollar will lose some ground so we may see the price getting back into the
range, and in case he sounds hawkish, we should see the US Dollar getting even
stronger. </p><p>On the 1 hour chart below, we can
see more closely the breakout of the range caused by the RBA catalyst. The
buyers will need the price to get back into the range to hope for another run
into the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> at 0.6781 which will need the
support from the fundamentals. </p><p>The sellers may wait for a retest
of the broken support now turned resistance before piling in again or more
probably wait for the Fed Chair Powell testimony later today. </p>

This article was written by ForexLive at www.forexlive.com.

<p>On the daily chart below, we can
see that the price started to consolidate near the neckline of the possible <a target=“_blank“ href=“https://www.forexlive.com/Education/chart-patterns-guide-20220125/“>double
top</a>.
Generally, when there’s a <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/“>divergence</a> between the double top and an
oscillator like the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/“>MACD</a> in this case, the chart pattern
is more reliable. </p><p>To be confirmed, the price needs
to break decisively below the neckline and it looks like the market is awaiting
new <a target=“_blank“ href=“https://www.forexlive.com/EconomicCalendar“>key economic reports</a> like the NFP on Friday or CPI
the next week before getting the conviction and the momentum necessary to break
below such a strong level. </p><p>For now, the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
averages</a> are acting as resistance maintaining the bearish bias, but they have
compressed and are now threatening a cross to the upside. </p><p>On the 4 hour chart below, we can
see that the price couldn’t break the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/“>trendline</a> on the first try, but it’s now
probing again above it. The range is clear with the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> at 1.2143 and the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> at 1.1922. The buyers may now
target the top of the range if the break above the trendline is successful. </p><p>The sellers may want to wait for
the price to return back below the trendline to gain more conviction and pile
in ahead of the break below the support. We have <a target=“_blank“ href=“https://www.forexlive.com/centralbank/we-could-get-the-text-of-powells-opening-remarks-to-congress-later-today-20230306/“>Fed
Chair Powell</a> testimony today, and it’s expected that if he
sounds dovish risk assets will rally and support GBP/USD upside. On the other
hand, a more hawkish Powell should cause risk aversion and support the US
Dollar. </p><p>On the 1 hour chart below, we can
see that the current breakout of the trendline comes with a caveat: there is a
divergence between the price and the MACD. This may signal a fake breakout, but
it would need a fall back below the trendline to be confirmed. We have also an
upward trendline that supports the current uptrend. </p><p>The buyers should lean on it in
case the price pulls back, but the sellers will eye a break below it to pile in
more decisively and start targeting the support. </p>

This article was written by ForexLive at www.forexlive.com.

<ul><li>Concerned about persistence of core inflation</li><li>Weak pound is significant for inflation</li><li>There has been quite a hawkish tone from Fed and ECB</li><li>But the question is how much is priced into sterling</li></ul><p style=““ class=“text-align-justify“>She has been one of the more hawkish voices in the BOE, even saying that last month if they had paused rate hikes then they would risk a „policy boogie“. So, the more aggressive tone here isn’t a surprise but those are interesting remarks at least with regards to the pound. But it is not likely that she will step over the line apart from what has already been said.</p>

This article was written by Justin Low at www.forexlive.com.

<p>On the daily chart below, we can
see that after breaching the key <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> level at 11492 the sellers
couldn’t maintain control and the buyers came in with vengeance pushing the
price back above the level. The price is now at the red long period <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
average</a> which will act as resistance. </p><p>The rally on Friday is seen as a
squeeze as the <a target=“_blank“ href=“https://www.forexlive.com/news/us-february-ism-services-pmi-551-vs-545-expected-20230303/“>ISM
Services PMI</a> beat expectations and should have been bearish for
the market as good news is now seen as bad news due to the repricing of higher
interest rates. </p><p>On the 4 hour chart below, we can
see that the buyers will now fight with a strong level before getting more
conviction for higher highs. The price has rallied into a <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> zone with the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-confluence-20220318/“>confluence</a> of the 50% <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“>Fibonacci
retracement</a> level. </p><p>The strong rally on Friday has
also overextended the price from the blue short period moving average. In such
instances, the price generally consolidates or pulls back before the next move.
</p><p>On the 1 hour chart below, we can
see more closely the near term price action. We can see that while the price
was breaching the support at 11492, it was <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/“>diverging</a> with the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/“>MACD</a>. That is a sign of a loss of
momentum and generally signals a pullback. </p><p>The moving averages on this
timeframe have clearly crossed to the upside and conservative sellers may want
to wait for them to cross back to the downside before considering new
positions. Aggressive sellers may start to pile in here at this strong
resistance zone. A break above should give the buyers control, so the sellers
can fold quickly. </p>

This article was written by ForexLive at www.forexlive.com.

<ul><li>Expects that it will take a very long time for inflation to come down</li></ul>

This article was written by Justin Low at www.forexlive.com.

<p>On the daily chart below, we can
see that the breakout below the key <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>support</a> zone at 1920 has failed. The
buyers managed to break above the 1920 <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/“>resistance</a> after the <a target=“_blank“ href=“https://www.forexlive.com/news/us-february-ism-services-pmi-551-vs-545-expected-20230303/“>ISM
Services PMI</a>. </p><p>This move has got the bears
scratching their heads since hot economic data should be bearish for the market
as it will require a more hawkish response from the Fed. Traders will look at
the technicals now as the picture gets muddier. The red long period <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/“>moving
average</a> will act as resistance now and the sellers will probably lean on it to
fade the Friday’s rally. </p><p>In the 4
hour chart below, we can see that after the ISM Services PMI report the buyers
managed to break both the <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/“>trendline</a> and the resistance zone. Maybe
stops above that zone triggered a squeeze. </p><p>Anyway,
the sellers will need the price to fall below the 1920 level again to gain
conviction and target new lower lows. This will make the 1920 zone also the
last line of defence for the buyers in case the price gets there. As of now,
the buyers are in control and the first target should be the swing resistance
at 1970. </p><p>In the 1 hour chart, we can see
that the moving averages are now acting as support for this bullish trend. We
also have the trendline and <a target=“_blank“ href=“https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/“>Fibonacci
retracement</a> levels in the 1920 support zone. </p><p>In case we see a pullback, the
buyers will be leaning on that trendline to resume the uptrend. The sellers, on
the other hand, will look at a break lower to fade the Friday’s rally and start
targeting the low at 1874. </p>

This article was written by ForexLive at www.forexlive.com.

<p style=““ class=“text-align-justify“>The dollar is sitting a little higher against most of the major currencies bloc today, while keeping a modest advance against the antipodeans in particular. As mentioned earlier, the latter move is a reflection of the dollar’s gains against Chinese yuan today – after having seen China disappoint with their GDP target for the year.</p><p style=““ class=“text-align-justify“>The counter flows seem to be enough to keep the dollar afloat for now, despite the fact that <a target=“_blank“ href=“https://www.forexlive.com/news/bond-yields-continue-to-hold-slightly-lower-on-the-day-20230306/“ target=“_blank“ rel=“follow“>bond yields are pushing lower</a>. 10-year Treasury yields are down 5 bps now to 3.912% but USD/JPY is instead up 0.1% to 136.00 currently. The dollar’s gains are more evident against the aussie and kiwi, with the latter being pressed towards key technical levels again:</p><p style=““ class=“text-align-justify“>NZD/USD is closing in on its 200-day moving average (blue line), which will act as a first line of defense before the 38.2 Fib retracement level of the swing higher since October last year, seen at 0.6145 next.</p><p style=““ class=“text-align-justify“>As much as the dollar is holding up, there’s still plenty of landmines to navigate through on the week with key central bank policy decisions in focus alongside Fed chair Powell’s testimony to Congress (tomorrow and Wednesday). That will keep markets on edge but if anything else, just be wary that often times it is the case that the bond market is always right and the dollar (and equities) will have to play catch up later on.</p>

This article was written by Justin Low at www.forexlive.com.

<ul><li style=““ class=“text-align-justify“>Stronger pressures in inflation are indicated from food-related costs and labour market developments</li><li style=““ class=“text-align-justify“>Weaker pressures instead are arising from energy commodities, economic activity and supply-side bottlenecks</li><li style=““ class=“text-align-justify“>Heatmap suggests inflation pressures are still strong but there are some emerging signs of easing</li></ul><p style=““ class=“text-align-justify“>He adds that they would have to mark the latest wage developments as a high priority. Well, the headline while significant already fits with what markets are expecting i.e. more rate hikes by the ECB to follow. The question now is whether or not policymakers will make any firm „commitment“ after the March meeting.</p>

This article was written by Justin Low at www.forexlive.com.

<p>San Francisco Fed President Mary Daly is out with some candid comments today. She’s plugged into the core of the Fed and was the first to signal a higher path for Fed rates in November 2021. Her latest comments skew hawkishly but it’s conditional on the final round of data before the March 22 FOMC decision.</p><ul><li>I am beginning to think the labor market has a shortage of workers</li><li>Anecdotes from business leaders suggest inflation is slowing more than recent data suggests</li><li>Inflation is still high, have to think about ‚continuous tightening'</li><li>It would be a mistake to say we’ve done all we can do, impact of policy is still ahead</li><li>Further policy tightening, maintained for a longer term, will likely be necessary</li><li>Reshoring and the continued decline in labor force participation could mean more inflationary pressures ahead</li><li>The disinflation momentum we need is far from certain</li></ul><p>Between this and <a target=“_blank“ href=“https://www.forexlive.com/centralbank/fed-waller-fomc-may-need-to-raise-rates-beyond-decembers-51-54-central-tendency-view-20230302/“ target=“_blank“ rel=“follow“>Waller</a>, it looks like the Fed is setting up a shift in the dots to 6% or just below. There is certainly plenty of grey area and it’s contingent on the data between now and March 22 but it’s a fine line. Obviously, the market wasn’t spooked by Waller so I don’t see that changing on Daly but Powell is speaking on Wednesday and if he strikes some of these notes, the market could take notice.</p>

This article was written by Adam Button at www.forexlive.com.