Key Points:
- The Fibre (EURUSD) hits a six-month high at 1.09456 before pulling back to 1.08726.
- The euro gained 6% in a couple of weeks, as the dollar gets battered.
- The US dollar weakens amid Trump’s back-and-forth tariff drama and global uncertainty.
- The Federal Reserve’s upcoming rate decision could significantly impact market sentiment.
Fibre Rises to Six-Month High
The Fibre (EURUSD pair) hit a fresh six-month peak at 1.09456 Wednesday morning and immediately experienced a pullback. The euro dropped by more than 50 pips to hit a session low of 1.08726.
Going back to the US Presidential Election on November 5, the euro was climbing steadily before being hit by the dollar’s strength following President Trump’s election victory.
No More Dollar Kingdom?
Fast forward to today, and the euro-dollar has rebounded by more than 6% in just a couple of weeks, as traders shun the dollar amid Trump’s back-and-forth tariff drama, which is adding to global uncertainty.
After the EURUSD pair fell by 7% to 1.0176 in mid-January, all the dollar’s gains post-election are now erased. The euro is once again challenging the upside, with immediate resistance acting as a key level for short-term movements.
Fed Rate Decision Coming Today
However, the focus now shifts to the Federal Reserve, as its rate-setting meeting concludes today. While market expectations are leaning towards no rate cut, Chairman Jay Powell’s commentary during the press conference will be closely scrutinised.
Market participants are particularly interested in whether Powell offers any signals about possible future rate cuts amid inflation concerns stemming from Trump’s trade policies.
Technical Analysis
Picture: EUR/USD drops to 1.09044 as bearish momentum increases, with support at 1.08700, as seen on the VT Markets app
EUR/USD closed at 1.09044, dropping from the opening price of 1.09439, with a high of 1.09456 and a low of 1.08726 during the session.
The pair showed initial bullish movement but reversed sharply after breaching support around 1.09000, signalling potential further weakness. The moving averages (5,10,30) suggest a bearish trend, with the short-term MAs crossing below the longer-term moving average.
The MACD (12,26,9) histogram turned negative, showing further selling pressure, with the signal line moving lower, indicating a continuation of downward momentum.
Key support is at 1.08700, and a break below this level could lead to further declines toward 1.08000. Resistance is found around 1.09500, and a move above this could lead to a temporary reversal.
With market sentiment driven by central bank policies and global risks, breakouts or reversals at these key levels will dictate the next major move
