Forex: EUR/USD higher while the dollar drops following Bernanke speech

The EUR and commodities rose following a speech by Fed chairman, Ben Bernanke. The pair posted an intraday high of 1.4968 before settling to current levels around 1.4960. The pair is considered bearish and finds support at 1.4930 and resistance at 1.5016.

In New York, Ben Bernanke maintained that the US central bank was commited to both job growth and price stability while monitoring the declining dollar closely. However, he pointed to a weak economy for continuing to keep interests at historic lows for an “extended period.” He added: “we are attentive to implications of changes in the value of the dollar and will continue to formulate policy to guard against risks to our dual mandate to foster both maximum employment and price stability.”

Mr Bernanke also acknowledged that the weak dollar benefited commodity prices with investors looking for safe havens. Hence the dollar has “retraced its gains.” The dollar has dropped around 14% against a number of currencies since March.