Forex: EUR/USD under 1.3160 again ahead of FOMC Powell

Since the European morning drop to 1.3158 low on ECB's LTRO repayments report, the EUR/USD failed to do better than 1.3196 ahead of the US session. Then, a new downward move is extending monthly losses as the week ends. The pair has reached 1.3147 low, so far.

Investors are shorting their positions ahead of Fed governor Jerome Powell that will be speaking in New York. Fed's officials have been attempting to clarify the latest FOMC meeting minutes that alarmed investors of an end to QE sooner than previously thought. Fed's Bernanke will speak next week and might also try to sound dovish to compensate concerns over the minutes.

“The question now is less whether the Fed will be satisfied after all but whether it will reduce its QE3 measures despite – in its own eyes – unsatisfactory economic recovery”, wrote Commerzbank analyst Lutz Karpowitz.

“Loss of 1.3160 is required to confirm bearish breakout and expose the next targets at 1.3130/20, 90 day MA / 05 Dec 2012 peak”, wrote Windsor Brokers analyst Slobodan Drvenica, pointing to initial resistance at 1.3230 and 1.3264, and sidelined bears above 1.3300 barrier.