The EUR/USD currency pair traded relatively calmly throughout Tuesday, but on Monday evening, it managed to collapse by 90 pips. It's still difficult to say what caused this drop. After all, it certainly wasn't Lisa Cook's "firing"! To make sense of this, let's clarify a few points. Firstly, Donald Trump cannot dismiss any member of the Federal Reserve without very serious cause. Secondly, if there are grounds for dismissal, guilt must be proven in a court of law. Thirdly, terminating a government official—particularly from an independent organization—requires more than just a personal social media post.

So, Trump wrote on his own social network, Truth Social, claiming he has sufficient evidence of guilt against FOMC member Lisa Cook. Recall that this story started a couple of weeks ago with routine accusations of document falsification during a mortgage application by Cook. This story is at least four years old, as Cook obtained the loan before she became a Fed governor. However, Cook is a Democrat and was appointed to her post by Democrats. And she doesn't want to vote on the key rate as Trump wishes.

A similar story happened with Jerome Powell—not so long ago. Powell was accused of overspending and providing false testimony before Congress during the Fed's building renovation process. According to the prosecution (i.e., Trump and his loyal supporters), much more taxpayer money was spent on the Fed renovations than was budgeted. Naturally, no one can simply fire Powell without proof, but recall how many times Trump has written about firing Powell on social media.

Now, it's Lisa Cook's turn. There's a comedy film called "Wrongfully Accused" starring the late Leslie Nielsen. Its plot revolves around the main character being accused of every crime without having committed any, and he spends the entire movie trying to prove his innocence. What's happening in the US right now uncannily resembles the plot of this movie.

Trump's actions may be confusing only to those market participants who just installed a trading terminal yesterday. For everyone else, the motive is apparent—Trump wants to reshape the Fed so that the FOMC votes to lower the key rate. Trump needs a low rate, but the Fed is not under his control. Thus, there's no way to force the central bank to vote as Trump wants. Powell couldn't be dismissed, and no one was willing to prove his guilt—probably because there wasn't any, and Congress approved the renovation project back in 2021.

In fact, we've said before that accusations should now be expected for every second FOMC member. Trump's team will look for dirt on each, then exert pressure to get them to resign. However, Cook has already stated she does not intend to leave her post and is ready to go to court with Trump to defend her honor.

The average volatility of EUR/USD over the past five trading days, as of August 27, is 94 pips—characterized as "average." We expect the pair to move between 1.1560 and 1.1748 on Wednesday. The higher linear regression channel is pointing upward, still indicating an uptrend. The CCI indicator has entered oversold territory three times, signaling a likely resumption of the upward movement.

Nearest Support Levels:

S1 – 1.1597

S2 – 1.1536

S3 – 1.1475

Nearest Resistance Levels:

R1 – 1.1658

R2 – 1.1719

R3 – 1.1780

Trading Recommendations:

The EUR/USD pair may resume its uptrend. Trump's policies are strongly influencing the US currency, and he shows no sign of "stopping at what has been achieved." The dollar rose as much as it could, but now it seems we are at the threshold of a new, prolonged decline. If the price is below the moving average, short positions with targets at 1.1597 and 1.1560 may be considered. Above the moving average, long positions with targets at 1.1719 and 1.1748 remain relevant, in continuation of the trend.

Explanation of Illustrations:

Linear Regression Channels help determine the current trend. If both channels are aligned, it indicates a strong trend.

Moving Average Line (settings: 20,0, smoothed) defines the short-term trend and guides the trading direction.

Murray Levels act as target levels for movements and corrections.

Volatility Levels (red lines) represent the likely price range for the pair over the next 24 hours based on current volatility readings.

CCI Indicator: If it enters the oversold region (below -250) or overbought region (above +250), it signals an impending trend reversal in the opposite direction.