The pair has been in an uptrend for over six weeks, and more broadly, since the start of the year. This strength is unusual, especially given that the has not cut during this period. In fact, the Fed has maintained a cautious, hawkish stance, and may continue to do so through the rest of the year.
This cautious approach has drawn strong criticism from President Donald Trump, who continues to attack Fed Chair Jerome Powell, sometimes using harsh language.
The Fed’s hesitation to cut rates is largely driven by concerns over the ongoing trade war. Tariffs have increased the risk of a dangerous economic scenario — stagflation — where inflation rises while growth slows. This is one of the central bank’s biggest fears.
Looking ahead, fresh US labor market data due Friday could play a key role in shaping the Fed’s policy decisions in the coming months.
Is Trump Ready to Reveal the Next Fed Chair?
Despite growing pressure from Donald Trump, the current Fed Chairman has stood firm and continues to stick with the central bank’s current policy. His term ends in 11 months, but Trump may announce a potential replacement well before that.
Several names are being considered, and they all have one thing in common — support for faster interest rate cuts. This is seen as a key requirement, since Trump wants rates closer to 1% and is unlikely to support anyone with a hawkish stance.
Among the frontrunners are Fed Governor Christopher Waller, Treasury Secretary Scott Bessent, and Kevin Hassett from the White House’s National Economic Council. Based on their recent comments, all three appear open to quicker rate cuts, making them likely candidates.
Even before a new chair is chosen, the announcement itself would put added pressure on Jerome Powell, especially if Trump’s nominee joins the growing group of Fed officials calling for a more dovish approach.
Fresh Set of Economic Indicators from the US
This week, US markets will see reduced trading due to the July 4th Independence Day holiday. Stock exchanges will be closed on Thursday, and trading will be shortened.
Because of this, the monthly — usually released on Friday — will be published a day earlier, on Thursday. Forecasts suggest a slight weakening in the labor market. Economists expect the smallest increase in non-farm jobs since last November and a rise in the to 4.3%.
If the data turns out to be much weaker than expected, the could fall further. This would reflect growing market expectations of quicker interest rate cuts and concerns about a slowing economy.
Technical Analysis of EUR/USD
The strong uptrend, which has picked up pace in recent days, has now reached the key level of 1.18. However, it is unlikely that buyers will easily push the price much higher from here.
The base case remains a continued move upward. However, if the steep upward trend line is broken, a pullback could follow. In that case, the correction may head toward a clear support zone around 1.1640. For the medium term, the main trend line will serve as the key support level that bulls will aim to defend.
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