EURUSD managed to maintain above 1.0700 after falling on Monday.

After falling below 1.0700 for the first time in over a month early on Tuesday, the Euro (EURUSD) has managed to produce a minor recovery. A technical correction may occur, according to the pair’s near-term technical forecast. Market investors will pay special attention to Chairman of the FOMC Jerome Powell’s address during the American session.

Later on in the day, Jerome Powell, the FOMC chairman, will speak.

The US Dollar gained strength on Monday as a result of the unfavorable change in risk sentiment, which also drove EURUSD to maintain its downward trend. US market index futures are trading slightly lower at the start of Tuesday. EURUSD may struggle to gain traction if safe-haven movements continue to rule the financial markets following Wall Street’s opening bell. Later on in the day, Powell will give a speech at the Economic Club of Washington.

The FOMC Chairman made an attempt at It was better to persuade the markets that they had no intention of cutting the policy rate this month and that they could boost it again in May. However, US Treasury bond rates dropped precipitously as Powell recognized that the process of deflation had begun, and the US Dollar came under intense selling pressure.

However, Friday’s strong January employment report reinforced hawkish Fed wagers and gave the US dollar a lift. Markets are putting in a 71.8% chance of a 25 bps raise in May, per the CME Group Fed Watch Tool. The US Dollar may maintain its strength if Powell repeats that the robust labor market would allow them to maintain a restrictive monetary policy throughout the year.

Technically, situations Euro(EURUSD) are oversold are expected in the near future.

On the other side, a positive perspective on the currency’s rising potential may temporarily be constrained by the inflation forecast. As was already indicated, market positioning indicates that the US Dollar has further opportunity to rise in the event that Powell makes a hawkish statement.

The Fibonacci 61.8% retracement level of the most recent rise for the EUR/USD remains within touching distance, and the Relative Strength Index (RSI) indicator on the four-hour chart maintains an oversold reading below 30.

If the pair is able to make a comeback, it will likely run into significant resistance at 1.0760 (the 200-period SMA, the Fibonacci 50% retracement). A four-hour close above that level may draw buyers and pave the way for a prolonged rebound toward 1.0820 (20-period SMA, Fibonacci 38.2% retracement), 1.0800 (psychological level, static level), and 1.0820.

If the pair declines below 1.0700 and starts utilizing that level as resistance, more losses might be seen toward 1.0645 (a static level) and 1.0600 (a psychological barrier, a static level).