Bears enter EUR/USD to test bulls' commitments below 1.0600
The EUR/USD retreats from the 1.06 level and overnight highs. Powell testified before Congress and emphasized the Fed's resolve to return inflation to its target level (2.0 percent ).

At 1.0570, EUR/USD remains unchanged on the day, with the market giving back some of the overnight gains in the lack of a bid for the US dollar and a preference for the euro.
The European Central Bank's monetary policy committee is set to begin its tightening cycle at its next meeting on July 21, and the euro appeared cheaper following the Federal Reserve chairman's less hawkish comments on Wednesday.
Concerns that the U.S. economy may enter a recession led to a decline in US Treasury rates, which boosted the dollar. At a hearing of the US Senate Banking Committee, Fed Chair Jerome Powell stated that although higher interest rates are uncomfortable, they are the only tool the US central bank has to combat inflation.
Powell stated that the Fed is dedicated to getting inflation under control and is not attempting to fabricate a recession. He was certain that this was more essential than the possibility of a recession.
Powell did not indicate the extent of future rises during his Wednesday Senate hearing, but he did concede that the Fed had failed to do its job and that it would be tough to ensure a gentle landing. Powell stated that the Fed will not rule out any rate action and will do what is necessary. Powell stated that the size of future rate hikes will rely on incoming economic data and the economic outlook. Analysts at ANZ Bank stated that notwithstanding the difficulty of making a gentle landing, this remains the assumption.
In the meantime, the US 10-year yield plummeted by 14.7 basis points to 3.16 percent, extending a loss from 3.49 percent last week that followed the Fed's decision to raise its target rate range by the largest in three decades, 75 basis points.
The US dollar index, DXY, lost 0.31 percent immediately, while the single currency rose 0.47 percent to 1.0574 before peaking at 1.06. The day's peak value was 1.0605.
As investors analyzed the speech of Federal Reserve Chair Jerome Powell, Wall Street equities declined in a tumultuous trading day. The Dow Jones Industrial Average down 0.2% to 30,483.13, while the S&P 500 fell 0.1% to 3,759.89 and the Nasdaq Composite fell 0.2% to 11,0508.
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