EUR/USD flat lined below 1.06 as Yellen does balancing act

The EUR/USD has recovered from the session low of 1.0558 and is now trading in the sideways manner around 1.06 handle as the Fed chair Yellen reiterated the policy is not on preset course.

Yellen downplays dot plot adjustment

Dollar jumped across the board after the Fed dot chart showed potential for 3 rate hikes in 2017 as opposed to the previous 2 rate hikes. 

However, Fed chair Yellen, during her press conference, said the adjustment in the dot plot is ‘very modest’ and the policymakers favor a gradual rate hike path. That seems to have taken a wind out of the Dollar bulls. 

The spot was last seen trading around 1.0590 levels. 

EUR/USD Technical Levels

A break below the session low of 1.0558 could yield a drop to 1.05 (zero figure + latest cyclical low), under which the March 2015 low of 1.0463 stands exposed. On the higher side, only a convincing move back above 1.06 would open doors to 1.0660 (hourly 200-MA), beyond which gains could be capped around 1.07 (zero figure).