**U.S. Dollar Pulls Back as Trump Urges Fed Chair’s Resignation: Analysis for EUR/USD, GBP/USD, USD/CAD, USD/JPY**
*Based on the reporting by Vladimir Zernov for FX Empire*
The U.S. dollar faced renewed selling pressure following noteworthy comments from former President Donald Trump, who called for the resignation of Federal Reserve Chair Jerome Powell and Fed President Lisa Cook. This political development injected additional volatility into the currency markets, amplifying the focus on key economic data and central bank dynamics. In this article, we analyze the recent performance and technical outlook for the leading currency pairs: EUR/USD, GBP/USD, USD/CAD, and USD/JPY, while providing a deeper perspective on the U.S. dollar’s evolving landscape.
## The Trump Effect: Political Rhetoric Adds Uncertainty
The U.S. dollar index, a widely watched basket measuring the greenback against major currencies, retreated as markets digested Trump’s statement targeting Federal Reserve leadership. Such comments underscore the extent to which political influences, alongside traditional economic fundamentals, can sway currency sentiment. Market participants often react quickly to high-level criticisms of central bank policy, concerned that political pressure may affect future policy direction, or at the very least, introduce increased market volatility.
### Key Drivers Behind the Dollar’s Movement
Several factors have contributed to recent U.S. dollar moves beyond the Trump commentary:
– **Monetary Policy Outlook**: Uncertainty regarding the Federal Reserve’s next steps has kept traders guessing. While inflation remains above target, recent data has been mixed, complicating the near-term rate path.
– **Economic Indicators**: Employment, inflation, and manufacturing numbers continue to be closely monitored, with each release providing fuel for dollar bulls or bears.
– **Global Risk Sentiment**: Shifts in investor appetite for risk play a significant role. Geopolitical tensions and disparate economic recoveries shape cross-border capital flows.
– **Political Commentary**: As seen with Trump’s remarks, political statements can quickly become near-term catalysts for significant currency moves.
## EUR/USD: Testing Higher Ground
The euro has taken advantage of dollar softness, gaining momentum and testing higher price levels. Recent trading sessions saw EUR/USD break through notable resistance points, suggesting that buyers are in control—at least for now.
### Technical Overview
– **Resistance Level**: The pair has overcome the 1.0750 region, which previously acted as a significant barrier to further gains.
– **Support Level**: Immediate support is found near the 1.0725 zone. Sustained trading above this mark could reinforce the bullish narrative.
– **Trend Confirmation**: Short- and medium-term trend indicators, including moving averages, display a bullish crossover, indicating potential for further upside if momentum holds.
– **Volume and Volatility**: Increased trading volume during the breakout phase points to authentic buying interest, rather than a simple short-covering rally.
### Factors Supporting the Euro
– **ECB’s Relative Policy**: Although the European Central Bank remains cautious, expectations that the Fed may be closer to easing than the ECB has lent some support to the euro.
– **Improved Risk Sentiment**: Stabilization in euro area economic data has provided a tailwind, making the euro an attractive alternative to the dollar during episodes of greenback weakness.
### Potential Scenarios
– **Bullish Case**: A consolidation above 1.0750 could pave the way for a test of the 1.0800 area.
– **Bearish Case**: Failure to maintain the 1.0725 support could see EUR/USD retrace towards previous lows near 1.0650.
## GBP/USD: Sterling Benefits from Dollar Retreat
The British pound is another beneficiary of the dollar’s retracement. GBP/USD has advanced, bolstered further by relatively resilient U.K. economic data and diminishing expectations for near-term Bank of England rate cuts compared to the Fed.
### Technical Insights
– **
Read more on GBP/USD trading.