- EUR/USD is on the offensive ahead of Powell’s speech.
- Technical breakout and gold rally is likely fueling gains in EUR/USD.
- Fed’s Powell may reinforce rate cut expectations.
EUR/USD is extending the four-day winning streak with markets offering US Dollars amid a rally in gold prices.
The currency pair is currently trading at 1.1408, the highest level since March 21, having witnessed a bullish breakout on technical charts earlier this week.
Gold jumped 1 percent in Asia and is now trading at the highest level since early 2013. Notably,
The yellow metal is reporting gains for the sixth straight session and is up more than 9 percent on a month-to-date basis.
The sustained rally in gold is likely leading to broad-based USD weakness. After all, gold is considered by many as a hard currency.
Looking forward, EUR/USD’s impending move toward 1.16, as called by technical charts, will likely gather pace if the US Federal Reserve’s (Fed) Chairman Powell reinforces rate cut expectations with dovish comments later today. The Chairman is scheduled to speak at 17:00 GMT.
It is worth noting that the Fed removed the word “patient” from its forward guidance last week, setting the stage for a rate cut later this year.
Apart from the Fed speak, the EUR traders will also take cues from a speech by the European Central Bank member De Guindos at 08:15 GMT, US housing data and consumer confidence and Fed’s Bostic speech, due at 16:00 GMT.
Pivot levels