Trump again pressures Powell to cut rates Can EUR/USD maintain its rally?

Tradingkey - The minutes of the Fed meeting last night showed that there were differences among Fed officials on the outlook for interest rates, mainly due to different expectations on how tariffs will affect inflation. On Wednesday, US President Trump once again criticized Fed Chairman Powell, saying that the interest rate set by the Fed was at least 3 percentage points too high, and called for a rate cut to reduce the cost of national debt. The euro has fluctuated and pulled back against the US dollar recently, and lost its 10-day moving average, but it still remains in the rising channel of the daily chart. The market may continue to fluctuate and strengthen in the future, with the upper target at 1.1820.

Fed minutes showed that the disagreement among Fed officials on the interest rate outlook stemmed mainly from their different expectations on how tariffs would affect inflation. They said there was "considerable uncertainty" about the timing, extent and duration of the impact of tariffs on inflation.

The Fed's "dot plot" of interest rate forecasts shows that 10 of the 19 policymakers expect at least two rate cuts this year, and two more expect one. Meanwhile, seven see no change in rates this year.

U.S. President Donald Trump once again criticized Federal Reserve Chairman Jerome Powell, saying the interest rate set by the Fed is at least 3 percentage points too high. He called on the Fed to cut interest rates to help reduce the cost of repaying the national debt. This is the second consecutive day that Trump criticized Powell.

U.S. Treasury Undersecretary Michael Falkind also attacked Powell, saying he would like to see him step down from the Fed's board of governors when his term as chairman ends next May.

Morgan Stanley stated in its latest research report that due to the risk of inflation and tariffs, it is expected that there will be no interest rate cuts in 2025. Citigroup predicted in its research report that the interest rate cut cycle may start in September, and interest rates may be cut at each subsequent meeting until the policy rate drops to 3-3.25%.

ECB officials showed different attitudes towards rate cuts. Joachim Nagel, a member of the ECB's Governing Council, said that in view of the rising economic uncertainty, the ECB must keep all options open and should neither promise nor rule out another rate cut. Boris Vujcic, a member of the ECB's Governing Council, pointed out that the ECB does not need to worry too much about inflation temporarily falling below the 2% target, nor should it rush to further adjust interest rates.

EUR/USD Technical Analysis

Source: Mitrade EUR/USD trend

Technically, the euro has fallen back against the dollar in recent days, but its overall upward trend remains unchanged. The daily K-line chart remains in the upward channel, and the market bulls are dominant. The moving averages of the daily chart have begun to diverge, and the 5-day chart has turned downward, indicating that the bears are actively attacking. In the KD indicator, the two lines continue to move downward, suppressing the trend of the euro against the dollar, but the upward trend has not changed. In the future, the euro against the dollar may continue to rise, and the upper resistance level is at 1.1800.

The initial upward resistance for EUR/USD is at 1.1800, further resistance is at 1.1850, and the key resistance is at 1.1900; the initial downward support for EUR/USD is at 1.1650, further support is at 1.1580, and the more critical support is at 1.1500.