EUR/USD hits weekly highs near 1.1450 ahead of Fed’s decision

EUR/USD extends gains and reaches the highest level since December 10.
While the US dollar is moving mixed across the board, the euro remains strong on the back of the Italian budget agreement.

Matías Salord FXStreet

The EUR/USD pair rose further and climbed to 1.1438, hitting a fresh weekly high. It is trading near the top with the bullish tone intact but still under the key resistance seen around 1.1445/50.

The move to the upside took place as market participants await the outcome of the 2-day FOMC meeting. A rate hike is priced in, but lately, speculations about a “dovish” tone from the Fed weakened the demand for the US dollar. The statement will be released at 19:00 GMT.

Analysts at ING, also expect a rate hike today and they point out the economy is booming, inflation is at or above the 2% target and the jobs market is finally generating wage pressures. However, they warn that the outlook for policy in 2019 is more uncertain. “Back in September the Federal Reserve ‘dot diagram’, which shows the individual predictions of FOMC members, pointed to a median expectation of three 25bp rate rises next year with a further 25bp hike in 2020. Market participants are increasingly sceptical of this with Fed funds futures contracts no longer even fully pricing in one hike in 2019.”

The euro is among the top performers today, supported by the possible agreement between the Italian government and the European Commission that triggered a rally in Italian bonds. While EUR/USD is up almost more than 50 pips, EUR/CHF trades at 2-week highs near 1.1350 and EUR/GBP above 0.9030 at the highest since December 12.

EUR/USD Levels to watch

To the upside, the critical resistance level is seen at 1.1445/50, followed by 1.1470/75 (Nov 20 high) and 1.1495/1.1500 (Nov 7 high). On the flip side, support might now be seen at 1.1400, 1.1355/60 (Dec 17 high) and 1.1330 (Dec 13 low).

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

AUD/USD bulls seem hesitant below 0.7050 ahead of RBA on Tuesday

AUD/USD reverses an Asian session dip on Monday as renewed optimism over Iran diplomacy boosts investor confidence, keeping a lid on the safe-haven US Dollar and supporting the risk-sensitive Aussie. Spot prices, however, remain below the one-month high, touched last Thursday, as bulls wait for the crucial RBA decision before taking fresh positions.

USD/JPY climbs to 158.00 neighborhood as BoJ uncertainty weighs on the JPY

The USD/JPY pair gains some positive traction at the start of a new week, recovering further from Friday's post-Bank of Japan (BoJ) swing low to sub-157.00 levels. The momentum lifts spot prices to the 158.00 neighborhood during the Asian session and seems unaffected by fresh intervention warning from Japan's Finance Minister Satsuki Katayama.

Gold rebounds to near $3,900 as Fed hike bets cap upside

Gold price edges at the start of a new week, reclaiming $3,900 during the Asian session and reversing a part of Friday's heavy losses to its lowest level since October 2025. The upside potential, however, seems limited as elevated oil prices and inflation concerns keep Fed rate hike bets firmly on the table.

Zcash rebounds as ZODL founder now supports ending community grants

Zcash (ZEC) shows signs of recovery on Monday, extending gains above $1,250 as the Zcash Open Development Lab (ZODL) founder, Josh Swihart, now supports the compromise proposal to end the 8% block reward share directed to Zcash Community Grants (ZCG).

Middle East War updates: Iran warns of expanded strikes against US despite progress in talks

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.