(MENAFN- Daily Forex) Bullish view

• Buy the EUR/USD pair and set a take-profit at 1.2000.
• Add a stop-loss at 1.1750.
• Timeline: 1-2 days.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.1750.
• Add a stop-loss at 1.2000.

The EUR/USD exchange rate finally broke out, reaching its highest level since June 2021. It has jumped by over 13% from its lowest level this year as the US Dollar Index (DXY) plunged to 70 Reserve Interest Rate Decision

The EUR/USD exchange rate continued soaring this week as investors focused on the upcoming Federal Reserve interest rate decision, will see the bank slash rates for the first time since last year.

The decision comes a day after the Senate confirmed Stephen Miran as the new Federal Reserve governor. It also comes after a US court affirmed a lower court's ruling the Lisa Cook can continue working while her lawsuit challenging Trump's move to fire her proceeds.

Most economists expect the Federal Reserve to cut interest rates by 0.25% in this meeting as it reacts to the recent weak jobs numbers in the UK. A report showed that the economy created just 22,000 jobs in August as the unemployment rate rose to 4.3%, the highest level in years.

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While the Fed cut will be important, traders will watch what the Fed will say about the next phase of interest rate cuts. Jerome Powell is expected to maintain the view that inflation remained elevated and that the bank would maintain its data-dependence when making its interest rate decisions.

Economists predict that the Fed will cut interest rates two more times this year, followed by more times in 2026, especially when Trump replaces Jerome Powell as the Chair.

The next important catalyst for the EUR/USD pair will be the upcoming European consumer inflation report. Based on the first estimate, the data is expected to show that inflation rose slightly from 2.0% in July to 2.1% in August. Core inflation is expected to remain at 2.3%

EURUSD Chart by TradingViewEUR/USD Technical Analysis

The daily timeframe chart shows that the EUR/USD exchange rate has made a strong rebound in the past few days. It finally crossed the important resistance level at 1.1835, its highest level in July and the previous YTD high.

Moving above that level is a sign that bulls have prevailed. The pair has remained above the 50-day Exponential Moving Average (EMA), while the Relative Strength Index has jumped above the neutral point at 50.

Therefore, the pair will likely keep rising as buyers target the next key important psychological level at 1.2000.

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