The 24-year-old American, who holds an Italian passport, has reportedly been given a chance to earn a permanent move to the Madjeski Stadium.
Reading already have one American midfielder on their books in Danny Williams, but they could be set to add another in the near future.
The reports comes less than 24 hours after Rapids vice president of soccer operations Paul Bravo admitted that the club are “open-minded” about allowing their star man to leave, telling the Denver Post this weekend: "He's a very sharp young man, he has everything thought through.
"It would be very difficult for us [to sell him], but we have to remain open-minded with anything and everything that we feel can help us get the results we need next year."
Powers, 24, enjoyed a four-year career at Notre Dame before being drafted by the Rapids with the 11th overall pick in the 2013 MLS SuperDraft, and has since established himself as one of the league’s most exciting prospects.
Considered more of a defensive midfielder coming out of college, the former US Under-20 international has since transformed into an all-round talisman, recording 13 goals and 21 assists in 92 regular season appearances, as well as winning the 2013 Rookie of the Year award ahead of now Tottenham Hotspur defender DeAndre Yedlin.
The youngest player ever to captain Colorado, the Texan playmaker was one of the few bright spots for Pablo Mastroeni’s men in 2015, as a lacklustre campaign saw them finish bottom of the Western Conference with just 37 points from their 34 games.
Now believed to be exploring his options for 2016, his Italian passport means he would not run into the usual problems that Americans face when attempting to move to Europe, and if The Sun’s report is to be believed, Reading could be set to take advantage.
Powers is not the only MLS player to be linked with the Royals of late either, as LA Galaxy striker Gyasi Zardes was also a reported target for manager Steve Clarke during the summer transfer window [h/t MLSSoccer.com].
The club have plenty of history with American players, too, having had Bobby Convey and Marcus Hahnemann on their books in the past, while teenage striker Andrija Novakovich looks set to join US international Williams in the first-team before long.
Powers may still be searching for his first senior call-up but he most certainly has the talent to succeed at the Championship level, and should he seal a move to England in the near future, that would do his chances of breaking into Jurgen Klinsmann’s plans a world of good.