The EUR/USD pair surged to its highest level of the year at 1.1183 after Federal Reserve Chairman Jerome Powell hinted at adjusting policy, sparking expectations of rate cuts. Traders reacted by selling the Greenback, leading to a significant rally in the EUR/USD exchange rate.
Key Points:
- EUR/USD hits yearly high of 1.1183 following Powell’s comments.
- Fed funds futures indicate a 33% chance of 50 basis point rate cut in September.
- US 10-year Treasury yield drops to 3.81% as market anticipates Fed action.
EUR/USD Technical Analysis:
Technical analysis suggests that the EUR/USD pair could test the 1.1200 level, with further upside potential towards 1.1275 and 1.1300. Buyers are gaining momentum, as indicated by the Relative Strength Index (RSI), signaling a bullish trend.
However, failure to break above 1.1200 could lead to a pullback towards 1.1100 and 1.1047 levels in the near term.
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Analysis:
With Powell’s dovish stance and potential rate cuts on the horizon, the EUR/USD pair has seen a significant uptrend. Traders are closely monitoring the Fed’s actions and the impact on the currency markets. It is essential for investors to stay informed about central bank policies and global economic trends to make informed decisions about their finances.