- EUR/USD rose a scant 0.2% on Tuesday, testing 1.0950.
- Markets are tilted risk-on despite a high-impact Fed rate call on the cards.
- An update to the Fed’s own interest rate projections is due on Wednesday.
EUR/USD rose slightly on Tuesday, climbing one-fifth of one percent to continue testing the 1.0950 region. Fiber clipped into a fresh 23-month high as broad-market risk appetite tilts firmly risk-on ahead of the Fed’s upcoming rate call on Wednesday. Final European Harmonized Index of Consumer Prices (HICP) figures are also due on Wednesday, though the final print is expected to show no material change from the preliminary print. European Central Bank (ECB) President Christine Lagarde will be making an appearance on Thursday, as the EU leaders’ summit gets underway during the back half of the trading week.
Forex Today: Fed expected to keep rates unchanged
The Federal Reserve (Fed) is set to announce its latest interest rate decision on Wednesday. The CME’s FedWatch Tool indicates that market participants largely expect the Fed to maintain its current rate for the next two meetings, with a potential quarter-point rate reduction anticipated at the Federal Open Market Committee (FOMC) meeting in June. This week, the FOMC will also release its updated interest rate forecasts, which could significantly alter expectations for rate cuts if the Fed policymakers’ outlook on interest rates diverges significantly from existing market predictions.
EUR/USD price forecast
From a technical viewpoint, the Stochastic Oscillator is currently in overbought territory above 80.00, though it is showing signs of flattening, indicating a reduction in bullish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) displays flat green bars, suggesting a lack of strong trend conviction. Collectively, these indicators imply that the pair may enter a consolidation phase prior to making a definitive move.
Looking ahead, resistance is positioned at the 1.1000 level, which has historically served as a significant barrier. On the downside, initial support can be found around 1.0850, with more substantial support near the 20-day moving average close to 1.0800. A decline below these thresholds could trigger a corrective reaction, while consistent trading above 1.0900 would maintain the overall bullish outlook.
EUR/USD daily chart
Euro FAQs
The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
Gold picks up pace and flirts with $3,330, all-time peaks Premium
Gold now gathers extra steam and advances to the $3,330 region per troy ounce, reaching an all-time high. Ongoing worries over escalating US-China trade tensions and a softer US Dollar continue to underpin demand for the metal ahead of Powell's speech.
EUR/USD remains in a consolidative range below 1.1400
EUR/USD navigates the latter part of Wednesday’s session with marked gains, although another test of the 1.1400 level remained elusive. The strong bounce in spot came on the back of a marked move lower in the US Dollar, which remained apathetic following the neutral stance from Chair Powell.
GBP/USD alternates gains with losses in the low-1.3200s
Even as the dollar retreats, GBP/USD continues to linger in the 1.3220–1.3230 range, forfeiting much of its intraday rally from multi‑month highs near 1.3300. Softer UK inflation data on Wednesday seem to have capped Cable’s upside.
Bitcoin stabilizes around $83,000 as China opens trade talks with President Trump’s administration
Bitcoin price stabilizes around $83,500 on Wednesday after facing multiple rejections around the 200-day EMA. Bloomberg reports that China is open to trade talks with President Trump’s administration.
Future-proofing portfolios: A playbook for tariff and recession risks
It does seem like we will be talking tariffs for a while. And if tariffs stay — in some shape or form — even after negotiations, we’ll likely be talking about recession too. Higher input costs, persistent inflation, and tighter monetary policy are already weighing on global growth.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.