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⭐ EUR/USD Surges Past 1.17 as Fed’s Dovish Pivot Shakes Global Forex Markets

A deep dive into the euro’s breakout, the dollar’s stumble, and what traders must watch next.

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📌 Overview The Euro Breaks Higher Amid U.S. Dollar Weakness

The EUR/USD pair jumped beyond the 1.1700 level, marking one of its strongest weekly performances in months. The surge came directly after the Federal Reserve issued a dovish monetary policy statement, signaling that rate cuts may begin sooner than expected.

At the same time, the U.S. Dollar faced broad-based pressure:

• US economic data is cooling
• Jobless Claims are in focus
• Risk appetite is shaky due to fears of a growing AI-driven bubble
• Fed speakers continue to reinforce dovish messaging

The combination created ideal conditions for a euro rally.

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📈 Why EUR/USD Climbed Key Drivers

1. Fed Dovish Shift → Dollar Tumbles

The Federal Reserve’s latest statement leaned significantly dovish:

• No future hikes expected
• Increased probability of September and December rate cuts
• Softer economic tone

This hammered the USD and lifted EUR/USD sharply above 1.17.

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2. Market Bracing for U.S. Jobless Claims

Thursday’s Jobless Claims report is critical.
Traders expect:

• Slight increase in claims
• Further confirmation of labor market cooling

A weaker labor report will push EUR/USD even higher.

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3. Euro Support from ECB Signals

The ECB is still cautious but no longer aggressively dovish.
With inflation easing but not collapsing, the euro has found stability.

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4. Market Fear Is an AI Bubble Forming?

Investors worldwide are debating whether tech valuations especially AI are becoming irrational.

• Equity markets show fragility
• Risk appetite has moderated
• Dollar stays under pressure
• Euro gains a safe-haven-like benefit in Forex positioning

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🌍 War Effects & Geopolitical Pressures

Recent geopolitical tensions including Middle East disruptions and Eastern European uncertainty are impacting global capital flows.

Effects on EUR/USD:

• Flight-to-quality moves weaken USD less than usual
• Euro benefits from increased EU fiscal coordination
• Energy market volatility creates short-term euro swings

However, none of these outweighed the Fed-driven dollar weakness this week.

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📅 Weekly Forecast What’s Next for EUR/USD?

🔵 Bullish Scenario (Most Likely)

If US Jobless Claims rise and Fed speakers stay dovish:
→ EUR/USD targets 1.1780 – 1.1850

🔴 Bearish Scenario

If US data surprises strong or Powell hints at policy caution:
→ Pullback toward 1.1620 – 1.1550

⚪ Neutral / Consolidation

Sideways trading between 1.1660 – 1.1730 until Friday’s data.

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🎤 Jerome Powell Speech Effects

Powell’s latest appearance emphasized:

• Slower growth
• Labor softness
• Comfort with inflation path
• High probability of policy easing

This message accelerated USD declines and reinforced euro strength.

Markets now expect two cuts in the next 6 months.
EUR/USD tends to rally when Fed expectations shift dovish.

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ltas Opinion 📊 (Expert Eyes)

From a strategic viewpoint, EUR/USD’s momentum is not temporary.
Here’s my take:

👍 Positive Signals

• Fed is clearly entering an easing cycle
• Euro has regained medium-term strength
• USD faces multi-week correction
• Market structure favors more upside
• AI bubble fear reduces demand for USD as a defensive asset

👎 Negative Risks

• EUR/USD has moved too fast too quickly
• ECB may turn dovish sooner than markets expect
• Any strong U.S. economic surprise could reverse the move
• Geopolitical shocks could revive dollar demand

Altas Verdict:
EUR/USD likely moves higher, but with volatility.
Buying dips toward 1.1650 remains a smart strategy short-term only.

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❓ FAQs

1. Why is EUR/USD above 1.17 now?

Because the Fed turned dovish, weakening the USD sharply.

2. Will EUR/USD keep rising?

Yes, if U.S. data stays soft and Fed speakers remain dovish.

3. What can reverse the euro’s rally?

Stronger U.S. labor data or a sudden hawkish Powell shift.

4. Does war or global tensions affect the euro?

Yes, but this week’s impact was minor compared to Fed policy.

5. What is the EUR/USD forecast for this week?

1.1720–1.1850 range if bullish momentum continues.

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