EUR/USD Hits Three-Year High as US White House Policy Concerns Mount :: InvestMacro

By RoboForex Analytical Department 

The EUR/USD pair surged to a fresh three-year peak on Monday, holding steady at 1.1518 amid growing unease over US economic policy.

Key Drivers Behind the EUR/USD Rally

Investors returning from the Easter break were met with renewed concerns over the US White House’s stance on the Federal Reserve and its Chair, Jerome Powell. Questions surrounding the Fed’s independence have unsettled markets, particularly after Donald Trump ramped up his criticism of Powell.

While the US President has previously threatened to dismiss Powell, legal and institutional barriers make such a move difficult. Nevertheless, Trump’s rhetoric has grown increasingly aggressive, as he pushes for swifter interest rate cuts and greater monetary policy flexibility. The Fed, however, remains caught between taming inflation and navigating a robust labour market—a delicate balancing act that has only heightened market anxiety.

These tensions compound existing worries over escalating trade conflicts and broader uncertainty surrounding the Trump administration’s economic policies. Over the weekend, Chicago Fed President Austan Goolsbee added to the unease, warning that US tariffs could dampen economic activity by summer.

Technical Analysis: EUR/USD

H4 Chart Outlook

• The pair previously consolidated around 1.1333 before breaking upward.
• After finding support at 1.1390, it formed a bullish wave towards 1.1530.
• A downward correction towards 1.1390 is now anticipated. A break below this level could extend losses to 1.1245.
• The MACD indicator supports this view, with its signal line above zero but pointing sharply downward.

H1 Chart Outlook

• The market briefly consolidated near 1.1390 before rallying to 1.1530.
• A pullback towards 1.1390 is now in focus, with a breakdown potentially opening the door to 1.1245.
• The Stochastic oscillator aligns with this scenario, hovering above 80 and poised for a decline towards 20.

Conclusion

The EUR/USD rally reflects mounting scepticism towards US policy stability, with technical indicators now hinting at a potential retracement. Traders will be watching closely for further Fed commentary and political developments that could sway the pair’s trajectory.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.