USDJPY
EURUSD
EURUSD
EURUSD back near 1.17 as renewed worries on Fed independence weigh on the US Dollar
Table of Contents
Key Takeaways (30s Read)
The US Dollar weakens due to concerns over the Federal Reserve's independence amid political tensions.
Fundamental Overview
The US Dollar is weakening due to renewed worries about the independence of the Federal Reserve. The US Department of Justice subpoenaing the Fed marks a significant political pressure on Chair Powell, leading to concerns about future inflation risks. However, the probability of losing Fed independence remains low.EUR and Technical Analysis
The ECB maintains a neutral stance, focusing on data dependency for its policy decisions. Following recent news, EURUSD has risen and is approaching the crucial resistance near 1.17. This level coincides with a downward trendline, making it a point where sellers may step in. Conversely, buyers look for a breakout above this level to target 1.18.Short-term Outlook
On the 4-hour chart, a strong rally has emerged following the DOJ news, reversing much of last week's dollar gains. On the 1-hour chart, EURUSD is trading at the upper bound of its average daily range, suggesting possible consolidation or a pullback before the next move. Upcoming economic indicators such as CPI will likely influence the market's direction significantly.AI Analyst
AI Opinion
"The current political pressure on the Federal Reserve poses significant headwinds for the US Dollar, particularly as concerns regarding its independence could lead to greater market instability. A loss of confidence in the central bank's policies could have far-reaching consequences for the Dollar's trajectory, making it crucial for traders to stay vigilant. With the upcoming CPI report, the data's outcome could dramatically alter expectations for the Dollar's performance. For the Euro, maintaining a neutral stance while observing economic indicators remains essential. Overall, in the technical analysis of EURUSD, the 1.17 resistance level becomes pivotal, as a successful breakout could bolster bullish sentiment, while failure to do so may intensify selling pressure."
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