EUR/USD Outlook: Trump’s Attacks on Powell Weigh on Dollar

• The EUR/USD outlook suggests further weakness for the dollar.

• The dollar collapsed as Trump continued attacking Powell.

• Traders await the US and Eurozone PMI figures, due on Wednesday.

The EUR/USD outlook suggests further dollar weakness as Trump continues his criticism of Fed Chair Powell. As a result, the euro is holding firm as investors lose confidence in the stability of the US economy. Meanwhile, market participants are awaiting the release of crucial PMI data. 

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The euro remained steady on Tuesday, following new highs reached in the previous session amid dollar weakness. The dollar collapsed after Trump went on to attack Powell, calling him a loser. The US president has been telling the Fed to lower borrowing costs and support the economy.

Trump is now growing concerned about the state of the economy following his aggressive tariff moves. However, Powell has remained calm amid the storm of tariffs. The Fed Chair has maintained that there is no hurry to lower interest rates.

Policymakers are waiting to see whether tariffs have reheated inflation before lowering borrowing costs. The ongoing attack on the Fed Chair has threatened the central bank’s independence. At the same time, investors are losing confidence in the stability of US markets. Consequently, most are shifting to other economies, such as the Eurozone.

Elsewhere, the US and Eurozone PMI figures, due on Wednesday, will indicate the state of both economies, which will impact the EUR/USD price.

EUR/USD key events today

Market participants do not expect any key economic releases from the Eurozone or the US. Therefore, the pair might consolidate. 

EUR/USD technical outlook: Uptrend pauses to revisit the 1.1502 level

On the technical side, the EUR/USD price has pulled back to retest the recently broken 1.1502 key level as support. The price recently reached a new high, further strengthening the bullish bias. Moreover, the price trades far above the 30-SMA, and the RSI is above 50, showing bulls are still in the lead. 

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If the 1.1502 level holds firm as support, the price will bounce higher for a new high. Such an outcome would allow EUR/USD to reach the 1.1602 key level. However, if the price breaks below the support level, it may drop to retest the 30-SMA. 

If the SMA holds firm, bulls will return to seek new highs. On the other hand, a break below the SMA would signal a shift in sentiment, allowing bears to reach the 1.1302 support level.

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