US stocks rally accelerated on Tuesday as investors reacted to the dovish tone of Federal Reserve’s Jerome Powell. The S&P 500 index rose by 0.5% as Microsoft’s valuation surged to more than $2 trillion for the first time ever. In testimony to Congress, Jerome Powell said that the Fed will take a patient approach to eventually scale down pandemic response tools. He also said that the bank will do anything it can to support the economy’s recovery. Investors have been on alert for clues on when the bank will start scaling down its $120 billion per month quantitative easing program.

The US dollar held steady after relatively strong housing data in the United States. Data published yesterday showed that the number of existing homes sold in May declined to 5.80 million from the previous 5.85 million. This decline was better than the median estimate of 5.72 million. Some analysts believe that the drop in monthly sales is a sign that the industry has peaked. Further data showed that house prices continued to rise as demand increased. The median price for US existing houses rose to a record 23.6% year-on-year to $350,300. Later today, the US dollar will react to the latest new home sales data and flash manufacturing and services data by Markit.

The crude oil rally continued after the supportive inventories data from the US. According to the American Petroleum Institute (API), the weekly inventories declined by more than 7.1 million last week. This decline was bigger than the median estimate of more than 3.6 million. The EIA will publish its estimate on inventories later today. Analysts expect the data to show that inventories fell by more than 3.9 million. Oil traders are now shifting their focus to next week’s OPEC+ meeting in which members will deliberate on whether to increase production.

EURUSD

The EURUSD pair declined slightly to 1.1925 as the Fed Chair testified. On the four-hour chart, the pair is trading at the 61.8% Fibonacci retracement level. It has also dropped below the 25-day and 15-day exponential moving averages (EMA). Also, the signal line of the MACD has crossed over the histogram while the Relative Strength Index (RSI) has started moving higher. Therefore, the pair will likely keep rising as bulls target the 50% retracement level at 1.1987.

GBPUSD

The GBPUSD pair rose to a high of 1.3913, which was higher than this week’s low of 1.3785. On the four-hour chart, this price is between the 38.2% and 50% Fibonacci retracement level. It is also slightly below the short and longer-term moving averages. Also, the MACD and the RSI kept rising. The pair will likely maintain the upward momentum ahead of Thursday’s BOE decision.

BTCUSD

The BTCUSD pair declined sharply on Tuesday. It moved below the support at 30,000 for the first time in months. The pair then bounced back as traders rushed to buy the dip. It remains below the 25-day and 15-day moving averages and the 23.6% retracement. It also seems like it has formed a double-bottom pattern. Therefore, the bearish trend will be validated if the pair moves below yesterday’s low of 28,296.