EUR/USD soars above 1.1350 as US dollar tumbles on Powell’s comments

• US dollar drops sharply across the board after Fed Chairman says policy rate is just below neutral. 
• EUR/USD jumps almost a hundred pips and signals to a potential bottom. 

The EUR/USD pair broke dramatically to the upside boosted by a sharp slide of the US dollar across the board. The pair climbed from 1.1285 to 1.1367 in a few minutes. It erased weekly losses and reached the strongest level in two days. 

The rally could signal that a short-term bottom is in place at 1.1265 (Nov 28 low). The sharp recovery pushed the price above key technical levels and also on top of short-term moving averages. Currently is trading at 1.1355/65, around the 20-day SMA. 

Powell defended the gradual interest rate hike policy and said the current level is still low by historical standards, “and they remain just below the broad range of estimates of the level that would be neutral for the economy, that is, neither speeding up nor slowing down growth.” The greenback dropped on Powell’s indication that rates are near neutral. 

EUR/USD Technical levels 

If the euro continues to rise, it could face resistance at 1.1345 (Nov 27 high), and then at 1.1360 and 1.1380 and 1.1415. On the flip side, support levels now could be seen at 1.1305, 1.1265 (weekly low) and 1.1235.