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Powell is not in a hurry, the price comes first, how far can the euro/dollar go?
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Hello everyone, today XM Forex will bring you "[XM Forex]: Powell is not in a hurry, the price is ahead, how far can the euro/dollar go?". Hope it will be helpful to you! The original content is as follows:
During the European session on Thursday (September 18), the euro stabilized and rebounded against the US dollar, re-standing above 1.1830, and a tug-of-war around the 1.1840 line during the session. After the Federal Reserve cut interest rates by 25 basis points as scheduled, the US dollar rebounded in the statement and press conference "relatively less dovish" tone, but momentum quickly cooled down; the risk appetite was moderately repaired, allowing the exchange rate to be supported.
Finance:
The Federal Reserve lowered the target range of federal funds rate by 25 basis points to 4.00%-4.25%. The dot matrix diagram shows that the paths within the year show a tendency to be "risk management-oriented" loose: expected to drop twice in 2025 and once in 2026, but the members have significant differences and the uncertainty of the terminal path has increased. After the meeting, Jerome Powell emphasized that this time the rate cut was "risk management" and warned that inflation will remain sticky until the rest of this year 2026, and he "is not in a hurry" to further cut interest rates. This statement raised the nominal and actual interest rate spread support of the US dollar in the short term, but did not reverse the pace of decline since the night trading.
Looking forward to the recent data, tonight's U.S. initial jobless claims and the Philadelphia Fed Manufacturing Index will provide marginal clues to the US dollar. If no significant surprise occurs, the market's pricing of the xm-forex.combination of "slow growth + moderate inflation" is likely to continue, thereby suppressing the rebound height of the US dollar. The latest macro readings also tend toward this narrative: US retail sales in August increased by 0.6% month-on-month and 5.0% year-on-year, both higher than the market expectations +0.2% and +4.1%, and the July data was revised up to +0.6% month-on-month and 4.1% year-on-year, indicating that consumption resilience is still there, but it cannot change the background of the marginal weakness of the labor market. The Federal Reserve's economic forecast shows that GDP growth rate will rise to 1.6% this year and 1 next year.8%; PCE was 3.0% at the end of the year and slowed to 2.6% by 2026, higher than the June forecast; the unemployment rate remained unchanged at 4.5% at the end of the year, and slightly dropped to 4.4% in 2026. Interest rate path differences widened: the most hawkish situation points to about 4.4% at the end of the year, while the lowest situation (interpreted by the market as the preference of new member Stephen Miran) points to 2.9%, which also reduces the referenceability of the "median" itself.
On the euro, ECB Deputy Governor De Kindos said the current monetary policy was "appropriate" and allowed a slight deviation from inflation targets; economic growth is expected to remain sluggish in the second half of the year, but risks are "more balanced." At the same time, the euro zone's HICP in August increased by 0.1% month-on-month and 2.0% year-on-year, both lower than expected (+0.2%, +2.1%); core inflation increased by 0.3% month-on-month and 3.1% year-on-year, the same as in July. The meaning of the above xm-forex.combination to the euro is: the decline in inflation pressure is to maintain loose open space, but the policy xm-forex.communication of "not too dove" is superimposed on the rebound in risk preferences, and the short-term tendency is to support the exchange rate rather than suppress it. Overall, the narrative of the "neutral and slightly warmer" of the euro fundamentals jointly pushes the euro against the dollar to return to the strong oscillation structure above 1.1830.
Technical aspect:
From the daily chart, the current Bollinger middle track is 1.1699, the upper track is 1.1833, and the lower track is 1.1565. The exchange rate has crossed the upper track and the shrinkage volume is digested horizontally above it. The short-term form constitutes a "higher along the upper track" pattern, indicating that the upward trend continues and volatility expansion appear simultaneously.
At the indicator level, MACD shows that DIFF=0.0044, DEA=0.0030, and the bar chart is about +0.0030. The "golden cross" above the zero axis continues, but the cylinder has not yet amplified significantly, and the kinetic energy has not been overheated; RSI (14) is located near 61.45, and is located in the bullish market sentiment zone in the 50-70 range, and has not yet reached the overbought threshold.
xm-forex.combined with the K-line entity and upper shadow feature, it is currently more reflected in the backtest after the breakthrough - consolidation: If the upper rails are backward, the upper rails 1.1833 and 1.1860 will form a back-and-forth confirmation of "resistance to support/support to resistance"; if the downward falls back into the band, the Bollinger middle rail 1.1699 is the first support, and the lower down 1.1565 is the first support below. Overall, the trend maintains an upward channel, and pay attention to the risk of rhythm switching of "false breakthrough-true backtest" in the short term.
Future Outlook:
Upbound scenario (bold tendency): If the exchange rate continues to stabilize above Bollinger's upper track of 1.1833 and displays the "volume leading" feature in the backtest, it is expected to test the high point of 1.1918 again; by then, if the United States initially requests weak, the Philadelphia Fed weakens, and the subsequent monthly inflation rate and wage growth rate continue to cool down, the space for the US dollar to rebound is limited, and the euro against the US dollar will continue to "slow bull along the upper track". In terms of strategy, pay attention to the typical rhythm of "trend-retracement-up" along the upper track, and avoid chasing highs when the indicator is close to the overbought range, so as to avoid being squeezed in the short term.
Downward situation (short tendency): If the exchange rate falls back and falls back below 1.1833, and 1.1860 fails to convert into effective support, it means that the "overhead rail operation" has xm-forex.come to an end, and the price will return to the intraband average. First, observe whether the intraday retracement trace of 1.1780 can provide a buffer; if it falls below, the Bollinger middle rail of 1.1699 is a more critical long-short watershed. When further weakening, 1.1565 is structural support. After the loss, the market will retest the low level in the 1.1391 area. The catalysis that triggers this scenario mostly xm-forex.comes from the "reverse xm-forex.combination of data-policy": U.S. employment or inflation reappears resilience and the Fed's caliber is tougher, then the safe-haven and interest rate spread attributes of the US dollar will return in stages.
The above content is all about "[XM Forex]: Powell is not in a hurry, the price is ahead, how far can the euro/dollar go?", which was carefully xm-forex.compiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for the support!
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