EUR/USD Forecast Pressured as Fed Rate Gap Widens
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With the Fed rate now at 3.75%-4.0%, the policy gap versus the ECB widens further, a structural headwind for euro bulls. Forex forecast desks are watching whether EUR/USD can hold recent support zones or whether rate-driven flows push the pair toward fresh multi-month lows.
Momentum indicators are turning cautious as traders price in the hike's full effect on cross-border capital flows. A decisive break below near-term support would confirm bearish continuation, while any dovish Fed pivot signals could quickly reverse short-term forecasts back toward consolidation.