Heat the olive oil in a large skillet over medium heat. Add the onion and garlic, and cook until softened and fragrant. Whisk in the flour, cumin, chili powder, garlic powder, black pepper, and salt, and cook until golden and bubbly.

Slowly whisk in the chicken broth, stirring constantly to prevent lumps. Whisk in the green chilies. Bring the sauce to a simmer, and simmer 10 minutes, or until thickened slightly.

Puree the sauce using an immersion blender, or a blender or food processor (with the top open to let steam escape), until smooth.