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BoE dove Swati Dhingra warned in a speech that overtightening posses a more material risk now. She called for holding interest rate unchanged.

"Overtightening poses a more material risk at this point, through potential negative impacts from increased borrowing costs and reduced supply capacity going forwards," she explained. "It risks unnecessarily denting output at a time when the economy is weak and deepening the pain for households when budgets are already squeezed through energy and housing costs."

"In my view, a prudent strategy would hold policy steady amidst growing signs external price pressures are easing, and be prepared to respond to developments in price evolution. This would avoid overtightening and return the economy sustainably to our 2% inflation target in the medium-term."

"Overall, the evidence does not point to persistent cost-push inflation becoming embedded in wages and margins," she said. "Even after a year and a half of above-target inflation, there is little evidence for such cost-push inflation beyond what might be expected following an unprecedented terms of trade shock."

"Consumption remains weak and many of the tightening effects of monetary policy are yet to fully take hold," she added.

Full speech here.

Powell sent the USD much higher yesterday and hinted for a potential 50bp increase on next meetings as inflation is still the main issue while the economy is doing well. However, today Powell has another testemony at 15.00GMT when again we may see an important volatiliy. Before that ECB legarde is scheduleted to speak at 10GMT when we cna also expect hawkish comments, so EURUSD may potential try to stabilize for a bit, which would make sense as drop from 1.0695 is in five waves. Trend is down, no doubt so nay boucne in three waves will signal for further weakenss. Resistance is at 1.0570 then 1.0620.

USDJPY jumped into the green territory during the early US trading hours on Tuesday after the Fed chief Jerome Powell told Senate lawmakers that a return to bigger rate hikes is likely.

The pair closed moderately above the 38.2% Fibonacci retracement of the 151.93-127.21 downleg, which had been limiting bullish actions over the past couple of sessions around 136.65. But the bulls will also need to win the battle against the 200-day simple moving average (SMA) and the 138.00 round level in order to speed up to the next Fibonacci level of 139.60. Slightly higher, the 140.30 region may attract some attention before all eyes turn to the 142.20 barrier.

The bullish intersection between the 20- and 50-day SMAs is promoting the rally from January’s seven-month low, while the positive slope in the RSI and the Stochastic oscillator is also endorsing the aforementioned bullish scenario. Yet the indicators are currently only a short distance below their overbought levels, suggesting that upside pressures may fade soon. Should the price pull below 136.65, the 20-day SMA could immediately come to the rescue around 135.00. The 23.6% Fibonacci zone of 133.00 could be the next target, while lower, the pair may attempt to pivot within the frequently tested support area of 131.50-130.50.

In brief, USDJPY is looking cautiously bullish as the pair is trading within a constraining territory. A decisive close above 138.00 could further bolster buying appetite. 

NZDUSD sank to a fresh three-and-half month low of 0.6080, earlier today after the aggressive selling interest on Tuesday. The price is currently holding beneath the 200-day simple moving average (SMA) and the 0.6130 key level as well as below the bearish cross within the 20- and the 50-day SMAs.

According to the technical oscillators, the RSI indicator dived towards the 30 level and is flattening, while the MACD is strengthening its bearish momentum below its trigger and zero lines. Both are confirming the recent negative structure.

Should prices decline, immediate support could be found around the 0.6000 psychological mark before tumbling towards the 0.5840 support, shifting the outlook to strongly bearish.

However, if the market manages to pick up speed, the 0.6130 resistance and the 200-day SMA at 0.6165 could pose as a nearby barrier. A significant close above the latter would break the 20-day SMA at 0.6230 and the 0.6270 line, raising chances for further increases.

Summarizing, the outlook remains negative in the short-term timeframe since prices hold below all the moving average lines and near the recent low.

Daily Pivots: (S1) 161.55; (P) 162.71; (R1) 163.37; More...

Intraday bias in GBP/JPY remains neutral first. Further rally is still expected as long as 161.18 support holds. As noted before, corrective fall from 172.11 should have completed at 155.33 already. Break of 165.99 will target 169.26 resistance first, and then 172.11 high. However, break of 161.18 support will dampen this view and turn bias to the downside for 156.70 support instead.

In the bigger picture, corrective decline from 172.11 medium term should have completed at 155.33. With 38.2% retracement of 123.94 (2020 low) to 172.11 (2022 high) at 153.70 intact, medium term bullishness is retained. That is, larger up trend from 123.94 (2020 low) is still in progress. Break of 172.11 high to resume such up trend is expected at a later stage.

Daily Pivots: (S1) 144.35; (P) 144.90; (R1) 145.23; More....

Intraday bias in EUR/JPY remains neutral as consolidation from 145.55 is extending. Further rally is expected as long as 142.13 support holds. Corrective fall from 148.38 has completed at 137.37 already. Break of 145.55 will resume the rise from 137.37 to 146.71 resistance and then 148.38 high.

In the bigger picture, as long as 55 week EMA (now at 139.42) holds, larger up trend from 114.42 (2020 low) is still in progress for 149.76 long term resistance. However, firm break of 55 week EMA will bring deeper fall to 38.2% retracement of 114.42 to 148.38 at 135.40. Sustained break there will raise the chance of trend reversal, and target 61.8% retracement at 127.39.

Daily Pivots: (S1) 0.8876; (P) 0.8901; (R1) 0.8944; More...

Intraday bias in EUR/GBP remains on the upside at this point. Correction from 0.8977 should have completed with three waves down to 0.8754. Further rally should be seen to retest 0.8977 high next. Firm break there will resume the whole rally from 0.8545. On the downside, break of 0.8825 support will dampen this bullish view again and turn bias neutral.

In the bigger picture, outlook is rather mixed for now, except that price actions from 0.9267 (2022 high) are part of the long term range pattern from 0.9499 (2020 high). With 0.8720 support intact, rise from 0.8545 is in favor to continue through 0.8977. However, firm break of 0.8720 will argue that such rebound has completed, and open up deeper fall through this support level.

Daily Pivots: (S1) 1.5898; (P) 1.5970; (R1) 1.6097; More...

Intraday bias in EUR/AUD stays on the upside at this point. Rise from 1.4281 is resuming and should target 61.8% projection of 1.4281 to 1.5976 from 1.5254 at 1.6302. On the downside, below 1.5882 minor support will turn intraday bias neutral and bring consolidations first, before staging another rise.

In the bigger picture, the strong support from 55 week EMA (now at 1.5396) is raising the chance of bullish trend reversal. On break of 1.5976, focus will be on 1.6434 cluster resistance (38.2% retracement of 1.9799 to 1.4281 at 1.6389). Sustained break there should confirm that whole down trend form 1.9799 (2020 high) has completed. However, rejection by this cluster resistance will make medium term outlook neutral at best.

Daily Pivots: (S1) 0.9921; (P) 0.9943; (R1) 0.9960; More....

Intraday bias in EUR/CHF stays on the downside and outlook is unchanged. Fall from 1.0040 is seen as another falling leg inside the corrective pattern from 1.0095. Deeper decline would be seen back to 0.9844 support. But downside should be contained by 0.9832 to bring rebound. On the upside, above 0.9986 minor resistance will turn bias back to the upside for 1.0040 resistance instead.

In the bigger picture, with 0.9832 support intact, rise from 0.9407 (2022 low) is still expected to continue. Break of 1.0095 and sustained trading above 55 week EMA (now at 1.0021) will be a medium term bullish signal, and bring further rally to 1.0505 cluster resistance (2020 low at 1.0505, 61.8% retracement of 1.1149 to 0.9407 at 1.1484). However, firm break of 0.9832 support will revive medium term bearishness and bring retest of 0.9407 low instead.

Equities tumbled after Powell’s hawkish comments turned markets risk-off. On the daily chart, the FTSE 100 has remained upbeat while grinding along the 30-day SMA, a sign that the bulls are still eager to keep the ride going. Buying pressure has been building up after the price secured a foothold over 7850, but the latest fall below 7895 dented the short-term mood. 7850 is a key level to keep the week-long bounce intact as its breach could trigger a broader sell-off towards the daily support of 7710. 7960 is the closest resistance.