EUR/USD Presses $1.1650 Resistance as Markets Await Fed’s Updated Dot Plot
EUR/USD is holding near $1.1638 in early European trading, but price action remains choppy as traders avoid large positions...
Quick overview
- EUR/USD is trading around $1.1638 as traders await the Federal Reserve's decision on interest rates.
- Markets predict a nearly 90% chance of a 25-basis-point rate cut, with focus on the Fed's forward guidance and inflation outlook.
- The US Dollar received slight support from rising Treasury yields, but EUR/USD gains remain intact amid mixed Eurozone data.
- Technical indicators show EUR/USD is respecting a rising trendline, with key resistance at $1.1657 and potential downside targets below $1.1617.
EUR/USD is holding near $1.1638 in early European trading, but price action remains choppy as traders avoid large positions ahead of Wednesday’s Federal Reserve decision. Markets currently assign a near-90% probability to a 25-basis-point rate cut, according to the CME FedWatch Tool.
The main focus isn’t just the cut itself but the Fed’s forward guidance, the updated dot plot, and Chair Jerome Powell’s tone. Investors want clarity on how the central bank sees inflation, growth, and the potential path for 2026 easing. Upcoming US ADP Employment and JOLTS job openings data add to the busy calendar.
Dollar Finds Light Support From Yields
The US Dollar drew mild support from firmer Treasury yields and a brief risk-off move after Japan’s 7.5-magnitude earthquake. The reaction, however, wasn’t strong enough to cap EUR/USD gains, as broader markets remain in wait-and-see mode.
Eurozone Data Improves, But Impact Limited
The Euro saw muted reaction to regional figures. The Sentix Investor Confidence Index improved to -6.2, while ECB officials delivered mixed messages. Isabel Schnabel signaled comfort with current expectations, while other policymakers pushed back against near-term moves.
EUR/USD Technical Outlook
EUR/USD continues to respect the rising trendline from late November, keeping the short-term structure constructive. Price is trading near $1.1638, with repeated long wicks forming just under $1.1657, confirming hesitation at resistance.
The pair is hovering around the EMA 20, showing a neutral intraday bias. A break below $1.1617 would weaken the trendline and expose $1.1598, then $1.1583. A deeper drop could open the door toward $1.1560.
RSI sits in the 45–47 range, suggesting slowing momentum. For upside continuation, bulls need a clean move above $1.1657, which would reopen $1.1680, followed by major resistance near $1.1703.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save