EUR/USD Price Forecast: Wait and see about to end

EUR/USD Current price: 1.1642

• The Federal Reserve will announce its decision on monetary policy in the American afternoon.
• ECB President Christine Lagarde repeated they are “in a good place,” hinting at no changes on monetary policy.
• EUR/USD is technically neutral, bulls can take over after Fed’s announcement.

The EUR/USD pair remains stuck within familiar levels on Wednesday, as investors await the Federal Reserve (Fed) monetary policy meeting outcome. The pair has seen little action ever since the month started, as market players await a clearer picture of the United States (US) economic health and definitions from the Fed.

The central bank decided to trim the benchmark interest rate by 25 basis points (bps) when it met in October, while Chair Jerome Powell clarified at the time that a December cut should not be taken for granted. The reasoning behind the statement was that the government was experiencing a shutdown due to a lack of funding, and therefore, no official data was released.

As the shutdown ended and delayed data began to emerge, speculative interest grew more confident that the Fed would deliver this time amid a worsening labor market. Employment-related data have shown that the labor market has loosened beyond policymakers’ comfort zone. Employment has surpassed inflation as a concern. As a result, an interest rate cut has been fully priced in for today.

Other than that, the Fed will publish a fresh Summary of Economic Projections (SEP), a document in which policymakers share their perspectives on economic developments and monetary policy. In this case, the document will gain relevance, as Chair Jerome Powell’s mandate is set to end in May 2026 and is likely to be replaced by someone who favors steeper cuts. Officials may anticipate such a scenario.

Meanwhile, no relevant data came from Europe, although European Central Bank (ECB) President Christine Lagarde said in an interview at the Financial Times Global Boardroom Conference in London that the central bank may upgrade their projections when it meets next week, adding the Eurozone economy is quite close to its potential. Finally, she repeated that the ECB “remains in a good place,” hinting at no changes to the current monetary policy.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD 4-hour chart shows it remains little changed once again. The 20-period Simple Moving Average (SMA) has flattened around 1.1641, while the 100- and 200-period SMAs trend modestly higher at 1.1596 and 1.1587, respectively, underscoring a still-positive underlying bias. Price holds above the longer SMAs while hovering near the 20 SMA. At the same time, technical indicators are developing right below their midlines, with uneven directional strength, in line with the ongoing consolidative stage.

In the daily chart, EUR/USD trades above the 20-day SMA, which is advancing above the rising 200-day SMA. At the same time, the pair battled around a flat 100-day SMA, still unable to clear ground beyond it. Meanwhile, the Momentum indicator edges higher above its midline, suggesting strengthening buying pressure. The Relative Strength Index (RSI) stands at 57, further supporting a bullish extension. The recent peak at 1.1682 provides relevant resistance, as gains beyond the level should keep the pair on the upward path in the upcoming sessions.

(The technical analysis of this story was written with the help of an AI tool)