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21/04/25
34
EUR/USD Breaks 1.1500: Bullish Momentum Amidst US Dollar Weakness
The EUR/USD currency pair has surpassed the 1.1500 level for the first time since November 2021, reflecting a significant bullish trend. On Monday, the pair experienced over a 1% daily increase, indicating strong momentum. However, technical indicators are signaling that the pair may be overbought in the near term. This price movement comes amidst sustained selling pressure on the US Dollar, which has faced challenges as the week begins.
Concerns about the potential impact of U.S. trade policies on the economy and growing worries about the Federal Reserve’s independence are contributing to the dollar’s weakness. Recent discussions among White House economic advisers suggest the administration is contemplating whether to take drastic measures against the Federal Reserve, such as dismissing its chairman. Furthermore, tensions are rising as China’s Commerce Ministry announced plans for countermeasures against any nations that compromise their interests in dealings with the US.
The declining strength of the dollar is evident in the USD Index, which fell more than 1% to below 98.20. While many major markets in Europe are closed for the Easter Monday holiday, US stock and bond markets are operating as usual, albeit facing a decline of about 1% in stock index futures during European trading hours. The ongoing weakness of the Dollar appears to indicate that it won’t gain any significant support from traditional risk aversion during a market downturn.
In terms of technical analysis, the 4-hour Relative Strength Index (RSI) has climbed above 70, denoting overbought territory for the EUR/USD pair. If the price experiences a pullback, key support levels are identified at 1.1500, followed by 1.1450 and 1.1400. Conversely, potential resistance can be found at 1.1600 and 1.1670, as the market continues to react to fluctuating sentiment.
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