Expectations of lower Federal Reserve interest rates, recession risks, and the negative fallout from the US stance on Greenland have been among the factors acting as bearish drivers for the dollar in recent weeks.

Additional pressure came from signals that the US may be willing to sell dollars to help Japan strengthen the yen. Yesterday’s comments from Donald Trump then gave the market fresh momentum.

“The dollar is doing great,” Trump replied when asked by a reporter whether he thought it had fallen too sharply recently. Does this mean the president is comfortable with the national currency having lost around 9% during the first year of his term?

Trump’s words triggered a sharp weakening of the US dollar against other currencies. In particular, EUR/USD rose above the psychological 1.2000 level for the first time since 2021.

Technical Analysis of the EUR/USD chart

EUR/USD price action towards the end of January formed an ascending channel, within which the upper boundary is acting as resistance.

→ As shown by the first arrow, a long upper wick appeared on the hourly candle, signalling increased selling pressure.
→ The second arrow highlights a similar candle, providing further evidence of seller activity.

The RSI indicator has remained above the 50 level in recent days, confirming the bullish bias, while at the same time creating conditions for a potential pullback.

Should a correction occur, it would allow the channel’s median line to act as support — a level that previously functioned as resistance before being broken.

Given the rapidly shifting news backdrop and frequent comments from officials, further spikes in volatility across currency markets cannot be ruled out.

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