Research Team at Lloyds Bank, do not expect Fed Chair Yellen’s testimony (text to be released at 13:30 GMT) to be particularly helpful for the USD today. Key Quotes “While the Chair will likely attempt to maintain some leeway to continue tightening policy in March, she will also need to acknowledge the recent tightening in financial conditions and mixed data, providing markets with little impulse to reconsider Fed pricing. Moreover, even if Chair Yellen does sound more hawkish than we expect, it is appears unlikely that the risk environment would recover from front-end yields moving higher. For this reason, risk-reward remains poor for positioning long USD vs. funding currencies. In contrast, USD longs vs. commodity exporter currencies remain attractive, with BNP Paribas STEER™ suggesting AUD and CAD are trading rich given recent declines in global equity markets and oil prices (see here). Amongst the majors, a theme of current account surplus currencies (EUR and JPY) gaining against the deficit currencies (USD and GBP) appears set to continue if risk remains underpressure. For EURUSD this means we may soon see a challenge of the resistance level at 1.1385, a break of which opens the way for a move to the 1.1450/1.1500 resistance area. Meanwhile, the technical supports for USDJPY are becoming thin. Support currently stands at 114.02/10 but below this the next key support is not until the Jun 13-Jul 14 uptrend at 111.30.” For more information, read our latest forex news.