The return of Donald Trump to the US political scene has triggered market volatility, impacting the EUR/USD exchange rate. Trump’s potential return to protectionist policies could fuel inflation, potentially leading to higher interest rates and a stronger US dollar. Meanwhile, the Federal Reserve’s recent rate cut has reinforced the greenback’s appeal. Technical analysis suggests a bullish outlook for EUR/USD, with a potential retracement to 1.0758 before resuming its ascent towards 1.0833.
The EUR/USD pair is navigating a week of heightened uncertainty, influenced by global economic concerns, the US dollar’s safe-haven appeal, and upcoming US economic data. The pair is expected to be volatile as investors await key employment figures that could impact the Federal Reserve’s interest rate decisions and the currency’s direction.
The Euro fell against the US dollar as the market adjusts to expectations of a Fed rate cut in November. Germany’s current account surplus shrank, indicating potential vulnerabilities in Europe’s largest economy. Consumer confidence in the US also dipped, signaling concerns about high prices.
The EUR/USD currency pair is hovering near a seven-week low as investors adjust their expectations for future Federal Reserve interest rate cuts. While the market initially anticipated more aggressive easing, the recent strong employment report has shifted the focus towards a more gradual approach. This has strengthened the US dollar, providing support for the USD.
The EUR/USD pair ended the week trading near 1.1170, remaining relatively stable despite early dollar strength. Although the dollar initially saw a surge due to anticipation of Fed policy insights, no concrete data emerged to significantly impact its trajectory. The mixed signals from Fed officials indicate a lack of consensus on future monetary policy actions. Despite initial gains, the US dollar experienced a downturn towards the week’s end, marking its third consecutive day of declines. Technical analysis suggests a potential continuation of the upward trend in the EUR/USD pair.
The EUR/USD pair traded sideways on Thursday morning, with investors awaiting crucial US employment data. The ADP private sector jobs report, followed by weekly unemployment claims, are expected to influence market sentiment ahead of Friday’s highly anticipated Nonfarm Payroll (NFP) report. The Fed’s focus on employment indicators makes these releases especially important, potentially impacting the likelihood of a rate cut in September.
Goldman Sachs analysts have expressed skepticism about the GBP/USD’s ability to break through the 1.23 level without significant movement in the EUR/USD. Positive economic data from Europe has influenced trader expectations and added complexity to the currency dynamics. Goldman Sachs advises caution in anticipating significant movements in the GBP/USD without corresponding shifts in the EUR/USD.
EUR/USD has pulled back to retest the 1.07 zone, where the 38.2% level and the red 21 EMA meet. Sellers may step in with a defined risk above the resistance to position for a drop into new lows. Alternatively, buyers will want to see a break above the 1.08 handle to place bullish bets. On the 4-hour chart, a potential bearish pattern has formed, but it needs confirmation by breaking below the lower trendline. This would strengthen the resistance zone along with the upper trendline. Sellers aim for a break below the lower trendline, while buyers seek a breakout to invalidate the bearish setup and rally to 1.08. The 1-hour chart reveals another critical zone around 1.0690, where the price has faced resistance and support. The red 21 EMA provides additional dynamic support. Buyers may step in below this level to target a breakout and rally to 1.08, while sellers seek a break below to increase bearish bets towards 1.0640.
The EUR/USD currency pair has encountered resistance around the 38.2 Fib retracement level of its recent swing lower, located at 1.0709. This technical level, coupled with upcoming option expiries, could contribute to price action becoming more range-bound in the short term.
EUR/USD has retreated from its earlier high of 1.0695, dropping to 1.0655 as market participants digest mixed economic data. While the data doesn’t alter the European Central Bank’s (ECB) plans for a rate hike in June, it suggests they may be keeping their options open for the future.
