市場分析

EUR/USD Gains Ground as Trump’s Inauguration Fuels Market Optimism

Amos Simanungkalit · 20 Jan38.8K 閱讀

Image Credit: FXSTREET

EUR/USD surged sharply to near 1.0300 during Monday’s European session, as the US Dollar’s safe-haven appeal weakened ahead of President-elect Donald Trump’s inauguration. The US Dollar Index (DXY), which measures the Greenback’s strength against six major currencies, dropped to around 109.00.

The Greenback faced downward pressure as markets anticipated Trump’s likely declaration of a national emergency soon after taking office. This move would enable him to ramp up domestic energy production and reverse several climate change policies implemented by Joe Biden’s administration, according to Bloomberg. EUR/USD bounced back to near 1.0310 to start the week, with the currency pair moving sideways around 1.0300 over the past four trading days after recovering from a two-year low of 1.175 last week. The rebound is marked by a divergence in momentum and price action, with the 14-day Relative Strength Index (RSI) forming a higher low near 35.00, despite the pair making lower lows.

However, the outlook for the pair remains bearish as all short- to long-term Exponential Moving Averages (EMAs) continue to slope downwards. The key support level for the pair is at the January 13 low of 1.0175, while the January 6 high of 1.0437 represents the key resistance level for the Euro bulls.

A report from Fox News Digital also revealed that Trump plans to sign over 200 orders on his first day, potentially including policies such as immigration controls, tax cuts, and higher import tariffs. These policies are expected to strengthen the US Dollar, as investors anticipate an increase in growth and inflationary pressures, allowing the Federal Reserve (Fed) to maintain current interest rates for a longer period.

According to the CME FedWatch tool, traders expect the Fed to keep borrowing rates within the range of 4.25%-4.50% during the next three policy meetings. In contrast, analysts at Morgan Stanley believe the Fed might lower rates in March, following slower inflation in December. Last week’s Consumer Price Index (CPI) report showed core inflation, excluding volatile food and energy prices, increased at a slower pace of 3.2% year-over-year.