EUR/USD breaks its seven-day losing streak as the Greenback faces widespread pressure. Concerns regarding the independence of the Federal Reserve are impacting the value of the US Dollar. The pair is exhibiting diminishing bearish momentum; however, it does not demonstrate strong bullish conviction beneath the 1.1700 psychological threshold. The Euro is showing signs of recovery against the US Dollar at the beginning of the week, as a fresh decline in the Greenback helps EUR/USD move up from one-month lows. Currently, the pair is trading at approximately 1.1676, reflecting an increase of nearly 0.36% for the day, thereby breaking a seven-day losing streak.
The US Dollar experienced significant selling pressure following reports that the US Department of Justice had issued subpoenas and warned of a potential criminal indictment against Federal Reserve Chair Jerome Powell, in connection with his congressional testimony regarding the Fed’s headquarters renovation project. The recent development has sparked new worries regarding the Fed’s autonomy, leading investors to reduce their exposure to the Greenback and shift towards other major currencies, thereby boosting several G10 FX pairs at the beginning of the week.
From a technical perspective, EUR/USD is exhibiting initial indications of stabilization following last week’s decline to one-month lows, although the short-term outlook continues to appear mixed. On the daily chart, the pair is maintaining its position above the 50-day and 100-day Simple Moving Averages, which are both stabilizing around the 1.1670-1.1650 range, while the 1.1700 psychological level is limiting immediate upward movements. A decisive break above 1.1700 would alter the near-term technical landscape to a bullish stance and pave the way for a movement toward the 21-day SMA around 1.1730, with potential for an additional rise toward the 1.1800 area, where sellers have previously appeared.
On the downside, a failure to maintain levels above the 1.1650 region would sustain a near-term bias leaning towards the downside, potentially revealing the 1.1600 psychological support. A more significant retracement may subsequently highlight the 1.1550 region once again. Momentum indicators reflect the absence of a definitive directional bias. The Moving Average Convergence Divergence is currently positioned beneath its signal line and the zero threshold, yet the narrowing negative histogram indicates a potential waning of bearish momentum. Currently, the Relative Strength Index stands at approximately 47, situated in neutral territory. This suggests a lack of strong directional conviction unless the indicator surpasses the 50 level.