The FOMC gave dollar a boost, but hardly for long

Expert market comment from Alex Kuptsikevich of the FxPro Analyst Team: The FOMC gave dollar a boost, but hardly for long
FxPro | 1019 dias atrás

The FOMC gave dollar a boost, but hardly for long

The market reaction to Powell's comments on Wednesday has shattered the nice technical picture that has been forming in EURUSD for a month since late September. In this environment, the question of whether the dollar could renew the highs made at the end of September is becoming more relevant.

Having lost over 22% since May 2021, EURUSD climbed from 0.9530 in late September to 1.0080 a month later. The current rate was above the previous local highs and the 50-day moving average, giving a double signal to end the downtrend.

During this one-month bounce, local support was formed, and the 50 SMA has been in place for three consecutive days. 

However, the market reaction to Powell's comments after the FOMC meeting broke this nice technical picture. With a strong move, EURUSD went under its 50-day average and broke the support. The frustration of the speculators was so intense that the downside movement in the pair continued yesterday, dropping it to the area of 0.9730.

Strictly speaking, the recovery of the dollar momentum of the last ten days created the technical prerequisites for the EURUSD pair to renew multi-year lows, suggesting that by mid-November, it could fall under 0.9500.

At the same time, it would be wrong not to point out the fundamental resistance to dollar growth. ECB officials are becoming increasingly outspoken about their willingness and need to sacrifice economic growth to fight inflation, which means they intend to raise rates despite falling GDP.

Other important actions are the continuing and increasing interventions by Asian countries, which are fighting the fall of their currencies through the sale of USD reserves, thus increasing the supply of USD on the markets.

History also teaches us that while the Fed often leads the monetary cycle, others quickly catch up. The USD, meanwhile, on average, begins its rally six months before the reversal to tightening and six months after it begins. In this context, the current rally looks very ageist.

On the balance sheet, we anticipate great difficulty with the dollar's rise and assume more chances for a sideways formation than a sustained retreat to new EURUSD lows. Moreover, we would not be surprised if EUR buying already strengthens at 0.9700 with a more measured reversal than in October, but still an upside in the pair will follow.

 

By the FxPro Analyst Team

 

Regulamento: FCA (UK), SCB (The Bahamas)
read more
ATFX Market Outlook 20th August 2025

ATFX Market Outlook 20th August 2025

The U.S. increased tariffs on 407 products, with steel and aluminium duties reaching as high as 50%. U.S. equities declined on Tuesday, with the Nasdaq and S&P 500 pushed lower by technology shares, while investors looked ahead to Fed Chair Jerome Powell’s speech later this week at the central bank’s annual symposium. 
ATFX | 3h 28min atrás
ATFX ​Market Outlook 19th August 2025

ATFX ​Market Outlook 19th August 2025

U.S. equities ended Monday little changed as investors struggled for direction, awaiting earnings reports from major retailers for further clues on the economic outlook, while also focusing on the upcoming Federal Reserve symposium in Jackson Hole. The Dow Jones slipped 0.08%, the S&P 500 edged down 0.03%, and the Nasdaq inched up 0.01%.
ATFX | 1 dia atrás
ATFX Market Outlook 18th August 2025

ATFX Market Outlook 18th August 2025

U. S. July retail sales showed strong growth, though the chance of a 25 bps September Fed cut slipped from 94% to 89%. Preliminary Michigan data signaled weaker consumer sentiment, while Trump called his first meeting with Putin in six years “productive.” 
ATFX | 2 dias atrás
ATFX Market Outlook 15th August 2025

ATFX Market Outlook 15th August 2025

In July, the US PPI rose 0.9% month-on-month, marking the largest gain in three years and far exceeding economists’ expectations, potentially adding uncertainty to the Fed’s rate cut path. US stocks closed mixed on Thursday, with the S&P 500 reaching a record closing high, while the Dow Jones Industrial Average and Nasdaq ended flat. The Dow fell 0.02%, the S&P 500 rose 0.03%, Nasdaq slipped 0.01%
ATFX | 5 dias atrás
ATFX Market Outlook 14th August 2025

ATFX Market Outlook 14th August 2025

Markets now view a September Fed rate cut as almost certain, with the U.S. Treasury Secretary hinting at a possible larger 50-basis-point move. U.S. equities extended their rally, with the S&P 500 and Nasdaq closing at record highs for a second straight day, fueled by expectations of a new monetary easing cycle. The Dow Jones rose 1.04%, the S&P 500 gained 0.32%, and the Nasdaq added 0.14%.
ATFX | 6 dias atrás
EUR/USD Under Pressure All Eyes on US Inflation Data

EUR/USD Under Pressure All Eyes on US Inflation Data

The EUR/USD pair dipped to 1.1620 on Tuesday following sharp swings in the previous session. Investors are bracing for the release of US inflation data, which could reshape expectations for the Federal Reserve’s interest rate policy.
RoboForex | 7 dias atrás
ATFX Market Outlook 12th August 2025

ATFX Market Outlook 12th August 2025

A White House official said that President Trump has signed an executive order to extend the U.S.-China tariff truce for another 90 days. U.S. stock markets closed lower on Monday as investors awaited this week’s U.S. inflation data to assess the interest rate outlook. The Dow Jones fell 0.45%, the S&P 500 lost 0.25%, and the Nasdaq declined 0.3%.
ATFX | 7 dias atrás