EUR/USD is leaping to resistance at 1.1250 as Janet Yellen’s speech is released. She talks about caution when raising the rates. Given risks to the outlook, the Fed should proceed “cautiously” with rate hikes. The inflation outlook has become more uncertain according to the Fed Chair.

EUR/USD is extending its gains and similar moves are seen across the board. This is a “sell the rumor, sell the fact even more” reaction.

Yellen also talks about the Fed having considerable scope for more stimulus. Are negative rates still on the table in the US? And while she does warn about the global economy and is cautious also on oil prices, at least for now, the impact of the global turmoil will likely be low., thanks to the Fed’s low rates.

Currency reactions

Janet Yellen speaks in New York about monetary policy. She has a chance to clarify the stance of the Federal Reserve: extremely dovish as in the FOMC statement and her accompanying press conference or more upbeat as we’ve recently heard from her colleagues.

The latest Fed official to speak up was John Williams with whom she worked in the San Francisco Fed. He talked about two rate hikes in 2016. Bullard, which is a known hawk and other members, even mentioned April not only as a live meeting but also as a real chance to act. Howeve, markets are certainly skeptical about this.

Here is how the initial rise looks on the EUR/USD chart.