EUR/USD: Political Crosscurrents and Technical Levels Set the Stage

EUR/USD pared some of its gains due to profit-booking. It hit an intraday low of 1.17469 and is currently trading around 1.17492.

Political pressure on the Federal Reserve has increased as President Donald Trump openly supports immediate interest rate reductions, criticizing Fed Chair Jerome Powell and connecting cheaper rates to lower government borrowing expenses and economic growth, particularly with new tariffs. Powell and the Fed assert their political neutrality despite these attacks, based on monetary policy on economic data and waiting assessment of the inflationary effect of the tariffs before considering rate cuts, keeping the benchmark rate at 4. 25%-4. 50% since December 2024. Renewed trade tensions and the uncertainty around their economic impact complicate the Fed's perspective, therefore contributing to downward pressure on the US dollar as worries about the erosion of Fed independence and mixed signals from the administration generate market instability.

Markets eye ADP employment for further direction.

The pair is holding below 55 EMA,200 EMA, and below 365 EMA in the 15-minute chart. Near-term resistance is seen at 1.1835; a break above this may push the pair to targets of  1.19090/1.1956/1.200.  Major bullish momentum is likely only if prices can break above the 1.200 target 1.2100. On the downside, support is seen at 1.17479 (365 15 min EMA), any violation below will drag the pair to 1.1700/1.1660/1.1600.

Market Indicators and Trading Strategy

Commodity Channel Index (CCI)-  Bearish

Average Directional Movement Index (ADX) - Bearish

 It is good to sell below around 1.17475 with a stop-loss at 1.7800 for a target price of 1.1600.