FX.co ★ Fixy | EUR/USD

The euro rose against the dollar to around 1.1627, after the dollar experienced a sharp decline in the previous session and continued to face downward pressure. The dollar weakened broadly following comments from Federal Reserve Chairman Christopher Waller, which signaled an accommodative outlook. Financial markets significantly lowered their expectations for an interest rate hike at the Federal Open Market Committee (FOMC) meeting scheduled for September. Waller indicated that he would prefer to keep interest rates unchanged if underlying inflationary pressures continue to ease, and stressed that the Fed's next monetary policy decision would depend heavily on the August inflation data due next week. As a result, the market's expectation of a September rate hike fell to around 50%, a sharp drop from 63% the previous day. Furthermore, investors are closely watching the release of the US non-farm payrolls report for August on Friday, which is widely expected to be another key catalyst influencing monetary policy expectations and bolstering market sentiment. The dollar's weakness was exacerbated by a sharp rise in the value of the yen, which also added to the dollar's downward pressure. Market participants are closely monitoring the potential risks of official currency intervention, while speculation grows that the Bank of Japan may implement a more aggressive monetary tightening before the end of the year.

Technically, on the four-hour (H4) chart, the EUR/USD pair is trending slightly lower towards around 1.1611, currently forming a localized range around this short-term level. A minor bounce to the upper resistance level at 1.1657 is still possible in the near term, but the broader technical outlook suggests that the EUR/USD will continue its decline towards the downside target of 1.1555. The Moving Average Convergence Divergence (MACD) indicator confirms this bearish trend, with its signal line remaining below the zero line and continuing to decline, reinforcing the current bearish momentum and indicating that the EUR/USD still has significant downside potential.