EURUSD Technical Analysis – Dovish Powell sends the dollar lower
Fundamental
Overview
The USD sold off across the
board on Friday as Fed Chair Powell tilted more dovish by saying that “with
policy in restrictive territory, the baseline outlook and the shifting balance
of risks may warrant adjusting our policy stance.”
That saw traders firming up
expectations for a rate cut in September which now stands around 85%
probability with a total of 54 bps of easing by year-end. Overall, it’s not the
repricing in interest rates expectations that weighed on the greenback but hedges
being unwound.
Now, the focus turns to the
US NFP report next week which is going to be crucial and will influence greatly
interest rates expectations. Strong data might take the probability for a
September cut towards a 50/50…
