EUR/USD hits 4-year high amid Fed rate cut expectations
EUR/USD surged to a fresh four-year high of 1.1877 on Tuesday, driven by growing expectations of three consecutive interest rate cuts by the Federal Reserve in 2025, beginning today. The weakening US dollar enabled the pair to break out of a short-term upward-sloping channel, reinforcing its long-term bullish trajectory.
From a technical standpoint, the stochastic oscillator has entered overbought territory and continues to trend higher, suggesting persistent bullish momentum. However, the RSI is turning lower, indicating that the market may be overstretched and vulnerable to a near-term pullback.
Should bullish sentiment persist, the next resistance levels to watch are the August 2021 peak at 1.1900, followed by the 200-month simple moving average (SMA) at 1.2000.
On the other hand, a drop below the 1.1790–1.1830 support zone could expose the pair to a retest of the long-term uptrend line and the short-term SMAs near 1.1680.
Overall, EUR/USD maintains a strong bullish outlook, especially after it printed a new high, but traders need to be cautious for any volatility on the Fed decision.