There hasn’t been a clear reason for the sudden decline of the US dollar, but this situation could present a significant chance for dollar bulls. It’s worth noting that the short dollar positions are somewhat crowded, and it’s reasonable to anticipate an increase in Treasury yields in the upcoming weeks.
We’re starting to have our doubts about the likelihood of multiple rate cuts this year; it seems the market is leaning toward the idea that stronger economic indicators or more assertive comments from the Fed will be necessary.
Fed’s Waller is scheduled to speak shortly. It’ll be interesting to see if he makes any hawkish remarks, though he might not address monetary policy during this event at all.
The EUR/USD pair is nearing a crucial resistance area around the 1.1275 level on the 4-hour chart. This zone marks where old support and downtrend lines converge. If the price hits this mark, sellers may aim to push it down toward the 1.10 level, with the risk managed just above the trend line. Conversely, buyers will be looking to invalidate the bearish setup and push the price up, targeting the 1.15 level.
