Forex - EUR/USD lower on Bernanke testimony

Investing.com - The euro fell against the U.S. dollar Wednesday, after Federal Reserve Chairman Ben Bernanke stated that the U.S. was prepared to adjust the balance sheet “as appropriate” to support the economy spurring strength in the greenback.

EUR/USD pulled back from 1.3486 to trade at 1.355 down 0.77% on the session,

The pair was likely to find support at 1.3388,  Tuesday’s  low and technical resistance at 1.3486, the sessions  and  12-week high.

The greenback gained strength as Federal Reserve Chairman Ben Bernanke failed to signal further monetary easing in the world’s largest economy.

Bernanke stated that keeping monetary stimulus steady was warranted despite falling jobless claims and rising oil prices potentially increasing inflation. 

The Fed Chief added, policy makers believe that “sustaining a highly accommodative stance for monetary policy is consistent with promoting both objectives” of the Fed for stable prices and maximum employment.

The European Central Bank said it will lend 800 financial institutions EUR529.5 billion for 1092 days. This is higher than the estimated loan level of EUR470 billion easing systematic risk fears.

In additional euro zone news, European Union Competition Commissioner, Joaquin Almunia stated that EU leaders may consider relaxing budget deficit targets to take into consideration economic growth.

However, government data showed that euro zone consumer price inflation eased in January to 2.6%  instead of the forecasted 2.7%

In Greek news, Finland’s parliament endorsed Greece’s second bailout helping euro zone sentiment.

Meanwhile, in the U.S., the economy expanded 3% beating forecasts.

The euro was lower against the pound and the yen, with EUR/GBP plunging 0.97% to hit 0.8382 and EUR/JPY slipping 0.05% to hit 108.23.