EUR/USD Price Forecast: Bulls quiet ahead of Federal Reserve announcement
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UPGRADEEUR/USD Current price: 1.0915
- German Bundestag voted in favor of a major fiscal package on Tuesday.
- The Federal Reserve is widely anticipated to keep the benchmark interest rate on hold.
- EUR/USD corrects overbought conditions, but buyers are still willing to buy on dips
The EUR/USD pair retreated from its 2025 peak at 1.0954 on Wednesday, as the US Dollar (USD) found some footing ahead of the Federal Reserve (Fed) monetary policy decision. Stock markets, on the other hand, edged lower as caution rules.
There were some encouraging news for the Euro (EUR) as the German Bundestag voted in favor of a major fiscal package on Tuesday, with 513 votes in favor and 207 votes against. The reform includes changes to the long-standing debt brake rule and a €500 billion infrastructure and climate fund.
Across the pond, United States (US) President Donald Trump spoke with his Russian counterpart Vladimir Putin. i Putin agreed to stop attacking Ukrainian energy facilities temporarily but declined to endorse a full 30-day ceasefire that Trump hoped would be the first step toward a permanent peace deal. Russia later proceeded to attack Ukraine with kamikaze drones and S-300 surface-to-air missiles. The Kremlin latter noted that the unwillingness of Ukrainian leadership to agree a deal is obvious and a cause for concern.
Other than that, both presidents agreed to normalize their countries’ relationship step by step, referring to the potential of joint commercial projects.
Data-wise, the Eurozone (EU) confirmed that the Harmonized Index of Consumer Prices (HICP) rose by 2.3% on a yearly basis in February, slightly below the 2.4% previously estimated. The US published MBA Mortgages Applications, which declined by 6.2%.
The focus is now on the Fed, largely expected to maintain the benchmark interest rate on hold at 4.25%-4.50% amid the trade war uncertainty. At the same time, the central bank will also release the Summary of Economic Projections (SEP) or dot-plot, a document providing a fresh view of the overall state of the American economy alongside officials' aims regarding interest rate moves. Finally, Chairman Jerome Powell will deliver a press conference in which he could shed light on future action.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows it may correct further south in the upcoming sessions, but a steeper decline is not yet visible. The pair develops above all its moving averages, with a firmly bullish 20 Simple Moving Average (SMA) extending its run above a flat 100 SMA and aiming to cross above a flat 200 SMA. In the same chart, the Momentum indicator keeps heading north at extreme levels, while the Relative Strength Index (RSI) indicator eases within overbought levels.
In the near term, and according to the 4-hour chart, EUR/USD downside seems limited. The pair is currently hovering around a mildly bullish 20 SMA, quickly recovering after falling below it. The 100 and 200 SMAs maintain their bullish slopes well below the current level. Finally, technical indicators bounced modestly after testing their midlines, suggesting the market’s willingness to buy on dips.
Support levels: 1.0895 1.0830 1.0790
Resistance levels: 1.0925 1.0960 1.1000
EUR/USD Current price: 1.0915
- German Bundestag voted in favor of a major fiscal package on Tuesday.
- The Federal Reserve is widely anticipated to keep the benchmark interest rate on hold.
- EUR/USD corrects overbought conditions, but buyers are still willing to buy on dips
The EUR/USD pair retreated from its 2025 peak at 1.0954 on Wednesday, as the US Dollar (USD) found some footing ahead of the Federal Reserve (Fed) monetary policy decision. Stock markets, on the other hand, edged lower as caution rules.
There were some encouraging news for the Euro (EUR) as the German Bundestag voted in favor of a major fiscal package on Tuesday, with 513 votes in favor and 207 votes against. The reform includes changes to the long-standing debt brake rule and a €500 billion infrastructure and climate fund.
Across the pond, United States (US) President Donald Trump spoke with his Russian counterpart Vladimir Putin. i Putin agreed to stop attacking Ukrainian energy facilities temporarily but declined to endorse a full 30-day ceasefire that Trump hoped would be the first step toward a permanent peace deal. Russia later proceeded to attack Ukraine with kamikaze drones and S-300 surface-to-air missiles. The Kremlin latter noted that the unwillingness of Ukrainian leadership to agree a deal is obvious and a cause for concern.
Other than that, both presidents agreed to normalize their countries’ relationship step by step, referring to the potential of joint commercial projects.
Data-wise, the Eurozone (EU) confirmed that the Harmonized Index of Consumer Prices (HICP) rose by 2.3% on a yearly basis in February, slightly below the 2.4% previously estimated. The US published MBA Mortgages Applications, which declined by 6.2%.
The focus is now on the Fed, largely expected to maintain the benchmark interest rate on hold at 4.25%-4.50% amid the trade war uncertainty. At the same time, the central bank will also release the Summary of Economic Projections (SEP) or dot-plot, a document providing a fresh view of the overall state of the American economy alongside officials' aims regarding interest rate moves. Finally, Chairman Jerome Powell will deliver a press conference in which he could shed light on future action.
EUR/USD short-term technical outlook
The daily chart for the EUR/USD pair shows it may correct further south in the upcoming sessions, but a steeper decline is not yet visible. The pair develops above all its moving averages, with a firmly bullish 20 Simple Moving Average (SMA) extending its run above a flat 100 SMA and aiming to cross above a flat 200 SMA. In the same chart, the Momentum indicator keeps heading north at extreme levels, while the Relative Strength Index (RSI) indicator eases within overbought levels.
In the near term, and according to the 4-hour chart, EUR/USD downside seems limited. The pair is currently hovering around a mildly bullish 20 SMA, quickly recovering after falling below it. The 100 and 200 SMAs maintain their bullish slopes well below the current level. Finally, technical indicators bounced modestly after testing their midlines, suggesting the market’s willingness to buy on dips.
Support levels: 1.0895 1.0830 1.0790
Resistance levels: 1.0925 1.0960 1.1000
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