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>>Euro‑dollar pair slides beneath 1.1800 after the Fed’s hawkish tone unsettles markets.

Euro‑dollar pair slides beneath 1.1800 after the Fed’s hawkish tone unsettles markets.

crypthub

about 4 hours ago

Market Move

The EUR/USD pair slipped under the 1.1800 psychological barrier, sparking a sharp decline. Fed officials delivered unexpectedly hawkish remarks, boosting the U.S. dollar against the euro. The move highlights forex sensitivity to central‑bank communication and a widening transatlantic policy gap.

Technical Breakdown

The 1.1800 floor was breached, and the pair hit a session low of 1.1765 before stabilising. Trading volume rose roughly 40% above the 30‑day average during the Euro‑NY overlap. A death‑cross on the 50‑day and 200‑day moving averages and an RSI below 30 signal bearish momentum, though a short‑term bounce remains possible.

Fed Hawkish Pivot

Federal Reserve speakers stressed persistent core‑service inflation and a tight labour market, hinting at prolonged quantitative tightening. Futures now price a much lower chance of a July rate cut, and the 2‑year Treasury yield jumped 12 bps. This stance deepens the policy divergence with the ECB, which is already easing amid Eurozone growth slowdown.

Broader Implications

A stronger dollar pressures commodities, emerging‑market debt and raises euro‑denominated import costs. Weak euro growth, fiscal constraints from the Stability and Growth Pact, and geopolitical risks limit the ECB’s response options. Market focus shifts to upcoming U.S. CPI, payroll data and the ECB press conference for further direction.