With the monetary policy shift expected in the coming months, which could even start this year, as Jerome Powell said at the Jackson Hole meeting on Friday, the movement of the US dollar is now in a pivotal phase, both in fundamental analysis. as in technical analysis. In the fundamental part, the currency will have in the next few months reasons to appreciate against other main ones, namely against the Euro, as the policy of the US and EU central banks will start to diverge, albeit slightly, it is true but they are opposite directions since the ECB will still be in an expansionary movement of its stimulus program, which tends to weaken the Euro.
This divergence between the two major world currencies was something that occurred in early 2014 and led to the EUR/USD weakness from $1.39 to $1.05 in the space of approximately eighteen months, so it is important to be aware of the next developments in this theme, confirm from the outset that the FED is actually setting the stage for reducing the amount of monthly asset purchases. From a technical point of view, the EUR/USD is also at an important stage, since in the daily timeframe there is a struggle of strength over a possible Head&Shoulders breakdown, which can push the asset to parity, or even below it, however, the outcome of this “war” of feelings has not yet been defined, so it is advisable to pay attention to see which way the cut will go, as it may be the remaining indication to gauge what will be the next big move in the EUR/USD.
