The EUR/USD has been moving in a tight range around 1.1600 on Tuesday’s European session, buoyed by a risk appetite, despite accusations of ceasefire violations in the Middle East. The pair had jumped about 1.30% from the previous day’s lows following the announcement of a truce in the Middle East and holds gains with all eyes on the Federal Reserve’s (Fed) Chairman Jerome Powell’s testimony to Congress.
Israel accused Iran of launching missiles into their territory in violation of the ceasefire and threatened a strong response to the Islamic Republic. Tehran has denied the accusations. Risk appetite has faltered somewhat, Oil prices have trimmed some losses, but the US Dollar remains depressed.
Crude prices are dropping nearly 3% so far on Tuesday, following a nearly 13% sell-off on Monday, with the barrel of WTI returning to $63.00 from above $77.00. The decline in Oil prices gives some respite to the Eurozone, as Europe is a net Crude importer, and expensive Oil would add inflationary pressures on a weakening economy.
With geopolitical tensions easing, Fed‘s Powell’s Semiannual Monetary Policy Report to Congress, at 14:00 GMT, will attract the focus. Investors are eager to see whether the Fed chief maintains his wait-and-see stance in the face of the increasing voices calling for a rate cut among the central bank officials.
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.30% | -0.74% | -0.84% | -0.15% | -0.84% | -1.00% | -0.30% | |
| EUR | 0.30% | -0.48% | -0.54% | 0.14% | -0.55% | -1.13% | 0.00% | |
| GBP | 0.74% | 0.48% | -0.08% | 0.62% | -0.06% | -0.65% | 0.34% | |
| JPY | 0.84% | 0.54% | 0.08% | 0.69% | -0.05% | -0.21% | 0.40% | |
| CAD | 0.15% | -0.14% | -0.62% | -0.69% | -0.70% | -1.27% | -0.29% | |
| AUD | 0.84% | 0.55% | 0.06% | 0.05% | 0.70% | -0.59% | 0.39% | |
| NZD | 1.00% | 1.13% | 0.65% | 0.21% | 1.27% | 0.59% | 1.00% | |
| CHF | 0.30% | -0.00% | -0.34% | -0.40% | 0.29% | -0.39% | -1.00% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
EUR/USD has broken above the top of the last few weeks’ corrective channel, boosted by a favourable market sentiment with bulls focusing on the June 12 high at 1.1630.
The breach of the trendline resistance at 1.1540 highlights a bullish flag formation, whose measured target is located at the 1.1700 area, where the 127.2% Fibonacci extension of the June 10-12 rally lies.
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On the downside, a bearish reaction from these levels might seek support at the reverse trendline, now around 1.1535, before rallying further. A confirmation below that level would cancel the bullish view and bring the June 19 and June 22 low at 1.1445 back to the focus.
Federal Reserve Chair Jerome Powell testifies before Congress, providing a broad overview of the economy and monetary policy. Powell’s prepared remarks are published ahead of the appearance on Capitol Hill.
Next release: Tue Jun 24, 2025 14:00
Frequency: Irregular
Consensus: –
Previous: –
Source: Federal Reserve
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
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