EUR/USD Gains Further Above 1.0150, Fed Policy in View

The EUR/USD currency pair is moving stronger ahead in the Asian session. The US Dollar index, on the other hand, is showing a pressed-down performance. This is in the lead-off to the US Federal Reserve’s decision on interest rates.

Bullish Momentum Continues Despite Obstacles

The currency pair has been showing a bullish impulse since Wednesday. This was as soon as it drove higher from the session’s first tick. Euro bulls seem likely to extend their gains if the pair surpasses the 1.0150 hurdles by any means.

EUR/USD price chart. Source TradingView

The Dollar index is usually extremely bullish when a Fed policy is set to be announced. Especially when the interest rate increase has been a long way coming this year. The goal is to curb the continuously escalating inflation rate.

Without a doubt, an interest rate increase of about 75 bps is in the pipeline. But the Dollar index is strangely showing a weak outing this period.

It looks like the reason behind the US Dollar index’s weakness is the increasing possibility of a recession. Employment is currently threatened since tech giants are planning to lay off large numbers of staff. 

Retail demands have also been cut down drastically. It was so estimated after it was observed that Walmart has poor earnings, and there was a sharp fall in Consumer Confidence. 

Europe’s Energy Crisis

In Europe, the increasing concerns over energy supply continue. Russia has shut down the major pipeline that supplies energy to Europe. The investment community has consequently got spooked. 

Germany will face most of the heat as it is heavily dependent on oil and energy from the Russian Federation. The next winter might as well escalate the effect of the energy crisis. But the Euro bulls are staging a good performance against the Dollar despite all.

Analytically, the pair’s sustained recovery from a three-week horizontal level is keeping its sellers hopeful. So does the decisive break from the initial support line on the 14th of July. Another factor that suggests the pair’s downside is the decreased relative strength index.

 That said, the pair’s most recent recovery might aim for 1.0200 before it challenges 1.0215. the horizontal level made up of many tops could pose a challenge to EUR/USD pair bulls. The 200-period simple moving average also acts as an upside filter.

It should be noted that the buyers of the pair are cautious until they see the horizontal resistance break. It was established close to 1.0350 to 65 in the early days of May.