The EUR/USD pair extended its steady climb on Monday, staying aligned with the broader uptrend that has been unfolding in recent weeks. The rise wasn’t spectacular, but it was consistent with the market’s current rhythm. The real question why the dollar is slipping again even without fresh triggers isn’t much of a puzzle. Traders are laser-focused on Wednesday’s Fed decision, where a rate cut looks almost guaranteed. For the market, that prospect acts like fuel for the euro’s advance.
Fed Policy and Trump’s Pressure
The idea of Fed easing has been in the air since inflation began cooling, but conditions in 2025 have shifted. Now, it takes little more than a hint of dovish policy for the dollar to lose ground. And a rate cut is no mere formality it’s a major reason for renewed weakness.
The bigger uncertainty lies in what comes after. Markets are convinced the Fed will deliver at least two cuts, but the longer-term policy path is blurred. That’s partly because Donald Trump has inserted himself aggressively into the discussion. Over the weekend, he once again demanded deeper cuts, dismissing a quarter-point move as “too small.” His push has gone beyond rhetoric: Trump has openly threatened FOMC members, attempted to remove Jerome Powell multiple times, and even tried unsuccessfully to oust Governor Lisa Cook, only to be blocked by the Supreme Court.
This ongoing political interference is shaking market confidence. With Powell set to leave in May 2026, Trump may only need to replace a few more officials to tip the Fed decisively in favour of dovish policy. If that happens, traders know the Fed’s independence could vanish, turning it into little more than a political tool. The implication is clear: the dollar could collapse much faster if markets believe rate policy is at the mercy of Trump’s will rather than economic data.
Technical Picture
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Volatility: The pair’s average range over the past five days is 63 pips, a typical level. Tuesday’s expected range: 1.1706 – 1.1832.
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Trend: The upper band of the linear regression channel continues to slope upward, reinforcing the bullish trend.
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Indicators: The CCI has dipped into oversold territory three times, signaling that fresh upward momentum may be forming. A bullish divergence adds weight to this outlook.
Support Levels
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1.1719
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1.1658
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1.1597
Resistance Levels
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1.1780
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1.1841
Trading Outlook
The euro’s uptrend remains intact, with dollar pressure tied directly to Trump’s aggressive stance on the Fed. If the pair stays above the moving average, long positions targeting 1.1780 and 1.1832 look favourable. If price dips below the moving average, small corrective shorts toward 1.1658 can be considered, though the broader picture still favours euro strength.
