Market Overview
- The EUR/USD surged over 150 pips to 1.1721 following reports that President Trump questioned House Republicans about the possibility of firing Fed Chair Powell due to high renovation costs at the Fed's headquarters.
- The US Dollar Index dropped from 98.91 to 97.90 after the news, causing a sharp sell-off in the US Dollar and pushing the Euro to its highest level in over a week.
- Gold prices rebounded after reports surfaced that President Trump may remove Fed Powell from office, causing the US Dollar to retreat amid trade talks and political uncertainty.
- The US Dollar weakened after reports of Trump considering firing Fed Chair Jerome Powell, despite earlier gains from soft PPI data.
Fundamental Analysis
- Major economic events include President Trump's criticism of Fed Chair Powell and potential implications for the Federal Reserve's independence and upcoming policy decisions.
- The US Producer Price Index (PPI) slowed to 2.3% YoY, sparking speculation of a Fed rate cut in July, while reports of Trump considering firing Fed Chair Powell add to market volatility.
- In the UK, CPI rises to 3.6% YoY, the highest since January 2024, reducing the likelihood of a Bank of England rate cut.
Technical Analysis
- EUR/USD is trading near 1.1670 with support at 1.1600 and resistance at 1.1700. The Relative Strength Index (RSI) indicates neutral momentum.
- Gold technical analysis shows a bullish signal as prices climb above key trend indicators, with resistance at $3,371 and $3,400.
- The USD was strongest against the New Zealand Dollar. The heat map shows percentage changes of major currencies against each other.
Conclusion
- Market volatility is expected to continue due to potential political interference in the Federal Reserve's independence and upcoming policy decisions.
- Key trading opportunities may arise from the technical analysis of major currency pairs and Gold, with a focus on support, resistance levels, and moving average trends.
- Investors should closely monitor major economic events, data releases, and central bank statements for potential market impacts.
