-
The Euro regains ground as attention turns to upcoming US Durable Goods and Consumer Confidence data.
-
President Trump intensifies pressure on the Federal Reserve by removing Governor Cook.
-
Gains for the Euro remain limited amid lingering concerns over tariffs and political instability in France.
The EUR/USD pair pushes higher on Tuesday, nearing the 1.1660 intraday peak ahead of the US session as the US Dollar softens amid rising tensions between President Trump and the Federal Reserve. Markets are bracing for potentially weak US Durable Goods Orders and declining Consumer Confidence data.
President Trump rattled markets on Monday by ordering the dismissal of Fed Governor Lisa Cook over alleged mortgage fraud in Georgia. Cook has rejected the move, asserting that the president lacks the authority to fire her. The attempt is widely viewed as a political maneuver to install a dovish loyalist and pressure the Fed into accelerating rate cuts.
Despite USD weakness, the Euro’s upside remains capped. Political uncertainty in France weighs on sentiment, with opposition parties refusing to back Prime Minister François Bayrou in a confidence vote tied to proposed austerity measures. This could trigger government collapse and fuel eurosceptic sentiment within the EU.
Meanwhile, Trump has also reignited trade tensions, threatening “substantial” new tariffs on countries enforcing digital taxes — a direct challenge to the EU's Digital Services Act, which he claims unfairly targets US tech giants.
Daily Market Movers Digest: US Dollar Weakens as Political Pressure Mounts on the Fed; EUR/USD Loses Steam
- The US Dollar Index slipped into a moderately bearish stance on Tuesday, weighed down by mounting political interference. President Trump’s escalating attacks on the Federal Reserve have undermined the central bank’s credibility, limiting any sustainable bullish momentum for the Greenback. Despite increasing market speculation about potential rate cuts, the Dollar’s recovery attempts are facing stiff resistance. Meanwhile, the risk-off sentiment triggered by political tension in the US and persistent uncertainties in the Eurozone is preventing the Euro from capitalizing fully.
- Fed Governor Lisa Cook has publicly rejected Trump’s directive to remove her from office, asserting that the president lacks the authority to do so. This bold response highlights the institutional friction and adds to market anxiety about the Fed’s independence.
- Adding to the cautious sentiment, New York Fed President John Williams said Monday that the era of low real interest rates is “far from over,” implying that demographic and productivity trends still constrain the central bank’s room to ease further.
- Tuesday's US economic data is in focus, with July’s Durable Goods Orders projected to fall 4%, following a 9.3% drop in June — mainly driven by declining aircraft orders. However, the core Nondefense Capital Goods Orders excluding aircraft is forecast to edge up 0.3%, offering a glimmer of resilience.
- Later in the session, Consumer Confidence for August is expected to dip to 96.2 from July’s 97.2, reflecting growing concerns about employment prospects and dampening consumer sentiment.
EUR/USD Technical Analysis: Momentum Fades, Eyes on 1.1585 Support
The EUR/USD pair continues to struggle below the descending trendline from the July 1 high after being rejected at 1.1660 on Monday. The pair lost 0.85% and is currently lacking clear direction. On the 4-hour chart, the Relative Strength Index (RSI) remains below the 50 mark, reinforcing a bearish bias and keeping the lower bound of the recent trading range — around 1.1585 — in focus.
A breakdown below the 1.1585 support zone, which has held firm on both August 11 and 22, could trigger a further decline toward the 50% Fibonacci retracement of the early August rally near 1.1560. However, the August 5 low around 1.1520, just above the 61.8% Fibonacci level, presents a stronger support target.
On the upside, immediate resistance lies at Monday’s intraday high of 1.1660. A breakout beyond that would face significant hurdles at the 1.1730–1.1735 area, where previous highs from August 13 and 22 intersect with the descending trendline — a key technical barrier for bulls to overcome.
