EUR/USD: The two-day spike in the wake of Fed meeting may will be under challenge

Vasilis Tsaprounis Independent Analyst

The single European currency is trading slightly below 1,1750 level in the early hours of Friday morning in a calm trading tone as the two-day rally due to the Fed meeting shows signs of fatigue.

The decision was completely expected and there was no surprise in the subsequent statements that followed the decision to reduce interest rates by 25 basis points, with scenarios remaining open that a cycle of interest rate cuts by Fed will continue, but possibly at a lower intensity than what the market has been expecting so far.

Right now, most bets are on the possibility that there will be another rate cut in 2026.

Despite the expected decision, the European currency found the opportunity to speculate as an environment of interest rate cuts always affects the currency to which it refers, resulting in the pair escaping from recent trading levels between 1.15 - 1.16 and currently moving at the highs of recent weeks.

Despite the temporary rise of the European currency, as long as the exchange rate remains below the critical level of 1.20, the general picture of the market remains the same. Prices well above the 1.20 level at the moment, although they gather some possibilities, may not be the main scenario for the near future.

Today's agenda is quite interesting with several statements by Fed officials standing out as it will be interesting to see what their position will be after the recent Fed meeting.

The further distance from the critical level of 1.1450 once again confirmed my references in previous articles and my desire to buy the European currency on a further dip, but I failed to find the right entry point as I expected levels much lower.

As we are more than 300 points away from a 1,1450 these thoughts have been removed from the agenda and I prefer to remain in a waiting position.

I will consider the possibility of buying the US currency in case the recent uptrend continues and further approach the critical level of 1,20.

Author

Vasilis Tsaprounis

Independent Analyst

Vassilis Tsaprounis possesses over 25 years of professional experience in Capital Markets and especially in the foreign exchange market.

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