USD Strength Surges After Powell Signals Wait‑and‑See Stance — EUR/USD Faces Key Support at 1.1550

Market snapshot — why the dollar is firmer

Federal Reserve Chair Jerome Powell cautioned that a December rate cut is “not a foregone conclusion,” noting differing views among FOMC members and flagging a wait‑and‑see approach amid the US government shutdown and a lack of official data. Market‑implied odds of another Fed cut have shifted later, pushing traders to price the next likely move toward January 2026. The near‑term result: a stronger US dollar, a rising DXY near recent two‑week highs, and renewed pressure on EUR/USD and GBP/USD.

Key newsflow and catalysts

- Fed commentary: Powell’s reluctance to commit to a December cut and signalling that policy may be at/near neutral tightened easing expectations.

- US data blackout: the ongoing government shutdown leaves markets starved of official economic prints, increasing uncertainty and volatility around FX.

- Upcoming events: high‑volatility German GDP (QoQ/YoY) prints and a scheduled Trump–Xi meeting are immediate cross‑asset catalysts that could quickly alter USD momentum.

EUR/USD technical and tactical outlook

Technical levels to watch

Short‑term technical focus clusters around 1.1600 → 1.1550 → 1.1500, with a secondary support around 1.1390 if sellers accelerate. Intraday resistance sits above 1.1600; reclaiming that level would soften the immediate bearish case.

Trade ideas

- Bear case (probability elevated): short EUR/USD targeting 1.1550 → 1.1500, placing a stop above 1.1600 on failed rebounds. This setup aligns with reduced Fed easing expectations and a stronger USD.

- Alternative / event risk: a surprise hawkish ECB or stronger‑than‑expected German GDP could trigger short covering and invalidate the short bias — traders should keep a clear plan for event windows.

Execution tips

Use tight, event‑aware sizing around the German GDP release and the Trump–Xi meeting. Consider volatility strategies (straddles/strangles) for options traders or small, layered positions for spot/CFD traders to manage sharp moves.

GBP/USD: vulnerable, but event‑sensitive

Renewed USD strength coinciding with weak UK prints or dovish BoE guidance would amplify downside pressure on GBP/USD. Earlier intraday action showed GBP/USD around the mid‑1.31s; an extended USD rally could push cable lower toward technical supports below 1.3000.

Risk and opportunity

- Risks: stronger USD from delayed Fed easing, UK economic softness, or dovish BoE communications could accelerate declines.

- Opportunities: event‑driven rebounds if the US shutdown resolves or if UK data unexpectedly outperforms; traders should wait for clear confirmation before switching to long positions.

Cross‑market context and correlation notes

FX moves are not in isolation. The DXY’s rise has pressured commodity currencies (AUD, CAD) and weighed on gold. USD/JPY momentum could pick up if US yields continue to bounce. Crypto trading is also sensitive to USD strength — a stronger dollar often coincides with softer risk assets and heightened volatility in bitcoin and altcoins.

Risk management and trade execution

Given higher short‑term volatility and event risk, apply disciplined risk controls: predefined stop‑losses, reduced position sizes around major releases, and scenario plans for sudden liquidity gaps during the data blackout. Consider automated execution to enforce rules and reduce emotional errors — for forex traders, a dedicated Forex Trading Bot can help implement pre‑defined strategies and manage entries/exits across time zones.

Technology & strategy

Retail traders can combine discretionary setups with automated tools to manage execution during event windows. For example, using a rules‑based Trade Assistant Bot to scale into positions, monitor correlations, and apply stop management can reduce execution slippage in fast markets. Automated trading and AI-driven signals are particularly useful when macro headlines produce rapid directional changes.

Actionable checklist for EUR/USD and GBP/USD traders

1) Monitor Fed commentary, German GDP releases, and the Trump–Xi meeting timetable. 2) If shorting EUR/USD, target 1.1550 → 1.1500 with a stop above 1.1600; size for potential whipsaws. 3) For GBP/USD, protect longs and look for event‑driven reversals before adding exposure. 4) Use correlation watches (DXY, US yields, AUD/USD) to confirm bias.

Conclusion

Powell’s wait‑and‑see language and the US government shutdown have pushed market pricing for Fed easing further out, supporting the dollar and opening tactical short opportunities in EUR/USD and GBP/USD. However, upcoming high‑impact events — German GDP and the Trump–Xi meeting — can quickly reverse flows, so disciplined risk management is essential.

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