EUR/USD has gone into a consolidation phase following Tuesday's decline. The pair is unlikely to gain traction as investors wait for European Central Bank (ECB) President and FOMC Chairman Jerome Powell to speak on the policy outlook, FXStreet’s Eren Sengezer reports.

Bulls lose interest before Lagarde and Powell speak on policy

“ECB President Lagarde will speak on policy alongside Bank of England Governor Andrew Bailey and Fed's Powell. In case investors are reminded of the widening policy divergence between the Fed and other major central banks, the dollar could continue to outperform its rivals. In case Powell adopts a cautious tone by acknowledging heightened recession risks, the greenback could have a tough time finding demand.”

“In case the pair confirms 1.0520 (Fibonacci 38.2% retracement of the latest downtrend) as resistance, it could target 1.0470 (Fibonacci 23.6% retracement) and 1.0400 (psychological level) next on the downside.” 

“With a four-hour close above 1.0520, EUR/USD could face immediate resistance at 1.0540 (50-period SMA, 100-period SMA) and 1.0560 (Fibonacci 50% retracement).”