The EUR/USD pair is trading around 1.0785 as markets digest the implications of Donald Trump’s return as U.S. President. Trump’s economic policies are expected to be protectionist, which could increase inflationary pressure in the U.S., prompting the Federal Reserve to sustain higher interest rates. This outlook is bolstering the dollar’s attractiveness as investors prepare for a more inflation-focused economic landscape.
In line with market expectations, the Federal Reserve recently lowered interest rates by 25 basis points to 4.75%, maintaining its current rate trajectory and signaling further easing at its December meeting. Another 25 basis point cut is anticipated, reflecting the Fed’s gradual easing approach in response to shifting economic dynamics.
Technical Analysis of EUR/USD
EUR/USD recently achieved a bullish advance, hitting 1.0820, though it appears set for a short retracement to around 1.0758 before continuing upward toward the 1.0833 mark. The MACD indicator, although below zero, is showing upward momentum, suggesting continued bullish potential.
On the hourly chart, EUR/USD is entering a corrective phase to 1.0758. Following this retracement, a rise to 1.0833 is expected, with a possible second pullback to 1.0758. The stochastic oscillator further supports a bullish outlook, with the signal line nearing the 80 level, indicating rising momentum.
