ForexSpace.com - As market watchers witnessed the 1-month EUR/USD volume at 13-day low in the lead up to Bernanke’s testimony to lawmakers on the Hill, investors pushed upwards in early trading on hopes that the Fed boss might hint at new steps to boost the U.S. economy. Thus, the Dow Jones popped up 0.74 percent, the S&P 500 gained 0.73 percent and Nasdaq managed a 0.97 percent rise. There was also a marked market uptick in reaction to the unexpected Chinese interest rate cut - even though the latter could be taken as a sign that the enormous Chinese economy is weaker than previously thought.

In the (non-) event, Reuters market analyst Neal Kimberley sums up the sentiment in Bernanke’s prepared statement… “move along there,” Kimberley quips, nothing to see here!"

Consequently, lot of stops said to have been done in gold on break of 1608, flushing out a lot of intraday longs.  “I’m not sure we can say same yet on eurusd,” adds Kimberley. “I think some longs are hanging in there. If you can hear that noise of cloth hitting the ground, that’s the sound of a lot of intraday eurusd longs throwing in the towel on the touch of 1.2570!”

Headlines pertaining to the Fed boss’s statement have been tricking onto the newswires, with one of the most tantalizing being that he is "prepared to take action to protect the financial system, US economy, in event stresses escalate".

EUR/USD intraday: the upside prevails

Bernanke was at pains to reiterate the Federal Reserve’s readiness to act in order to protect the financial system and the US economy, and no doubt this includes accommodative policy on the domestic front. Yet, given their openly acknowledge 'wait and see' policy, this stance is far from new. However, to buy EUR/USD on this would be perverse to say the least, as the crux of his latest comments centre around the uncertainty over in Europe. EUR/CAD is notably posting session lows, extending losses into the mid 1.2800's on live forex charts, though still plenty of downside left here with 1.2720-25 the initial target from here.

Drew Hillier. Editor, ForexSpace.com