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The EUR/USD pair has shown a modest rebound to 1.1370 amid heightened expectations of a U.S. interest rate hike by September, driven by Kevin Warsh's hawkish remarks as the new Federal Reserve (Fed) chair. Warsh's comments, emphasizing tighter monetary policy, have reinforced the dollar's strength against the euro. Key resistance remains at 1.1400, with a breakdown below 1.1350 likely to extend the bearish trend.
This development is critical for forex traders as Fed policy directly impacts the USD's trajectory. A September rate hike would amplify the dollar's appeal, pressuring the euro and potentially triggering broader market volatility. Traders are closely monitoring Fed communication and economic data for confirmation of the anticipated tightening cycle.
For the MENA region, a stronger USD could affect Gulf investors holding EUR/USD positions, particularly those with exposure to European markets. The next key levels to watch are 1.1400 (resistance) and 1.1300 (support). A sustained move above 1.1400 might reverse the bearish bias, while a drop below 1.1300 could accelerate the decline toward 1.1250.
