EUR/USD Bears Eye Break Below $1.1574 as US Dollar Strength Accelerates

The EUR/USD currency pair has been trading in a weak and slow downwards trend over the past few months, but things are now accelerating. The US Dollar is maintaining its recent strength, and the price of the EUR/USD is hovering around its two-week low at $1.1574.

This upward momentum is driven more by the US Dollar than the Euro, which is typical for the Forex market. About 75% of its volume comes from exchanges involving the greenback. The US Dollar's recent strength may be due to the Fed's shift towards a more hawkish stance under Jerome Powell's stewardship.

The CME FedWatch tool shows a 68% expectation that the Fed will hike its interest rate by 0.25% at its next policy meeting, up from 60% earlier in the week. The NFP and Average Earnings data this week may also influence the greenback's value.

Markets expect only one interest rate hike from the ECB next week, which is helping to weaken the Euro. The estimated impact of energy-driven inflation within the Eurozone will determine whether the ECB signals further hikes.

The long-term chart shows a slow bearish trend, but the short-term price action has formed a bearish descending channel. There are signs of a potential bullish bottom at $1.1574, but Adam Lemon believes this low may be broken, making it a good opportunity to enter a new short trade.