EUR/USD Price Forecast: US President Trump and Federal Reserve keeping markets on their toes

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1976

US President Donald Trump spurred a USD sell-off by saying the Greenback is doing great.
The United States Federal Reserve is expected to keep interest rates on hold.
EUR/USD neared 1.2100, peaking at its highest since June 2021.

The EUR/USD pair peaked at 1.2082 during Asian trading hours on Wednesday, as the Greenback collapsed across the FX board following comments from United States (US) President Donald Trump. When asked about the latest US Dollar (USD) decline, Trump said he was not concerned about its decline, adding, “I think it’s great.”

Other than that, President Trump reiterated that he will announce the next Federal Reserve (Fed) Chair “soon,” noting interest rates will come after with the new Chair. His words had a steeper impact ahead of the Fed’s monetary policy announcement, scheduled for later on Wednesday.

The Fed is widely anticipated to maintain the benchmark interest rate on hold in the range of 3.5%-3.75%, which means the announcement will likely have a limited impact on the USD. Instead, market participants will turn their eyes to Chair Jerome Powell’s words in the press conference that follows the meeting.

Meanwhile, the number of nominees for the next Fed Chair has come down to three: BlackRock's chief bond investment manager, Rick Rieder, Fed Governor Christopher Waller, and former Fed Governor Kevin ‍Warsh. There is a possibility that President Trump decides to announce his nominee within the Fed’s event, to overshadow Powell.

Data-wise, Germany released the GfK Consumer Confidence Survey, which improved in February to -24.1 from the previous -26.9, also beating expectations of -25.8. The American macroeconomic calendar has nothing to offer besides the Fed.

EUR/USD short-term technical outlook

From a technical point of view, the 4-hour chart shows that EUR/USD retreated from its early peak, but retains its bullish bias. The 20-period Simple Moving Average (SMA) heads firmly north above the 100- and 200-period SMAs, in line with the bullish bias. The 20 SMA at 1.1893 provides dynamic support. Meanwhile, the Momentum indicator advances after correcting overbought conditions, while the Relative Strength Index (RSI) indicator turned north at 69, consistent with strong upside momentum.

In the daily chart, EUR/USD trades in the red, but technical readings suggest buyers retain control. The Momentum indicator eases but remains positive, indicating the advance pause but retains traction. The RSI indicator corrected extreme overbought readings, aiming lower yet at around 71, not enough to consider a steeper decline ahead. Finally, the pair develops above all bullish moving averages, with the 20-day SMA at around 1.1730.

(The technical analysis of this story was written with the help of an AI tool.)

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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