Should we focus on the downside potential of the U.S. dollar, which fell following comments from the FOMC last month indicating a willingness to cut rates?

Should we focus on the downside potential of the U.S. dollar, which fell following comments from the FOMC last month indicating a willingness to cut rates?

25.08.2025

Last weekend, the U.S. dollar hit a sharp low after Federal Reserve Chair Powell, speaking at the Jackson Hole Symposium on the 22nd, acknowledged the threat of inflation but left the door open for a rate cut at the next FOMC meeting.The EUR/USD pair rose from 1.1583 to 1.1742. On the hourly chart, the price surged from the -2σ to the +3σ Bollinger Bands. On the 4-hour chart, the RSI soared from 30 to 65. On the daily chart, the pair broke through this month’s high, negating the triple top pattern.

Among European currencies, the Swiss franc fell against the yen. The CHF/JPY pair dropped from 184.014 to 183.003. It fell from the +3σ to the -2σ levels of the hourly Bollinger Bands and dropped to just below the 200 EMA.On the 4-hour chart, the 200SMA is acting as a resistance level, causing the price to pull back. On the daily chart, although the price attempted to move above the 20MA, it was rejected and has since retreated back toward the 20MA.

Today’s economic indicators include New Zealand retail sales at 7:45, Japan’s Economic Sentiment Index at 14:00, and Germany’sIFO Business Climate Index at 17:00, U.S. New Home Sales at 23:00, the U.S. Dallas Fed Manufacturing Activity Index at 23:30, and remarks by Logan, President of the Dallas Fed, at 28:15.We will be watching for further downside potential in the U.S. dollar, which fell following comments from next month’s FOMC suggesting a rate cut.