EUR/USD Price Analysis – April 21, 2025
Daily Price Outlook
The euro rose to its highest level in over three years on Monday, near $1.1575 against the US dollar as political uncertainty in Washington weighed on the greenback.
This is the latest in a trend reversal for the euro, driven by a broad decline in the US Dollar Index which fell to a three year low near 98.00.
Much of the dollar’s weakness is due to the uncertainty around Federal Reserve leadership. President Donald Trump’s public dissatisfaction with Fed Chair Jerome Powell – including direct suggestions of termination – has raised concerns about the Fed’s independence and the entire US monetary policy framework.
On Friday, Trump criticized Powell for not cutting interest rates despite easing inflationary pressures. “The Fed really owes it to the American people to get interest rates down… If I want him out of there, he’ll be out real fast,” Trump said.
The administration’s economic team, led by adviser Kevin Hassett, has confirmed they are looking into legal ways to remove Powell.
Policy Uncertainty Drives Dollar Down
The market has reacted quickly. Investors are now factoring in the risk of political interference in central banking decisions – a dynamic that undermines one of the key pillars of the dollar’s safe-haven status.
Chicago Fed President Austan Goolsbee warned over the weekend that challenging the Fed’s independence could have long term economic consequences.
In an interview he said: “We should not put ourselves in a situation where monetary independence is in question.” Nations with politically neutral central banks tend to see stronger, more stable economic outcomes.
With eurozone inflation slowing and the ECB being cautious, the big move in EUR/USD is less about the eurozone and more about the decline in US institutions. Traders will now focus on ECB comments and PMI releases this week.
EUR/USD – Technical Analysis
EUR/USD surged above key resistance near 1.1470, but the pair is now facing selling pressure just below 1.1533 — the recent high.
Price has rejected the upper trendline of the rising channel and is forming a potential bearish setup, especially if it closes below 1.1532. A retracement toward 1.1478 could be underway, aligned with the 0.382 Fibonacci support.
The RSI currently stands at 76.04, firmly in overbought territory. This suggests a short-term pullback is likely as bullish momentum cools off.
Meanwhile, the 50-period SMA at 1.1369 continues to trend upward, indicating the medium-term structure remains supportive of dips being bought — though some profit-taking is expected in the near term.
If the pair breaks below 1.1532, bearish confirmation could open the door to a correction toward 1.1478, with deeper support at 1.1459. A move above 1.1559 would invalidate the bearish view and resume the upward breakout toward 1.1598.
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