EUR/USD hits two-week lows at 1.1860, remains under pressure ahead of Powell and Yellen

• US dollar holds onto daily gains, now supported by US yields.
• EUR/USD eyes the 200-day moving average at the 1.1850 area.

The EUR/USD dropped further after the beginning of the America session and ahead of the presentation of Jerome Powell and Janet Yellen. A stronger US dollar pushed the pair to 1.1860, the lowest since March 9.

USD: Caution then, yields now

Earlier on Tuesday, risk aversion boosted the US dollar and the demand for safe-have assets that send US yields to the downside, and at the same time, the dollar higher. The positive tone around the greenback continued on New York, as US yields rebounded.

Despite falling versus the US dollar, the euro is flat versus the pound and up against the Swiss franc. The DXY peaked at 92.25, the highest level in two weeks. Market sentiment was hit by tensions between China and the US, EU and UK. Also, increasing restrictions in Europe due to COVID weighed.

In a few minutes, US Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell will testify before the House Financial Services Committee. Their perspectives on the US economy, the bond market, and fiscal and monetary policy could impact markets.

Technical levels