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29/10/25
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EUR/USD Pauses Ahead of Fed Decision as Technical and Economic Factors Coonverge
The EUR/USD currency pair experienced a pause after five consecutive days of gains, losing traction in early European trading and trading below the 1.1650 level. The shift in momentum reflects a cautious market environment ahead of the Federal Reserve’s upcoming monetary policy announcement. The technical outlook for the pair indicates a loss of bullish energy, with traders closely watching key support and resistance levels.
Market sentiment was initially optimistic on Tuesday, fueled by a rally in U.S. stocks and a risk-on environment that diminished demand for the U.S. dollar. However, the outlook remains uncertain as U.S. stock futures hover mixed in early Wednesday trading, signaling cautious market participation. The impending Federal Reserve rate decision, expected to be a 25 basis point cut, has traders speculating on whether Chair Jerome Powell will adopt a dovish stance. A dovish tone could weaken the USD further, especially if Powell references potential economic headwinds such as labor market softening or subdued inflation data. Conversely, any indication that the Fed may postpone further easing could support the dollar and put downward pressure on EUR/USD.
Attention now turns to forthcoming European economic data, including third-quarter GDP figures for Germany and the Eurozone, before the European Central Bank’s policy announcement. These releases could influence euro dynamics and set the tone for subsequent trading.
From a technical perspective, EUR/USD failed to breach resistance at 1.1660, where the 100-day simple moving average lies. The Relative Strength Index on the four-hour chart is slightly below 50, indicating tentative buyer interest. On the downside, support is seen around 1.1580, with further levels at 1.1550 and 1.1500. Resistance points are identified at 1.1690-1.1700, with higher targets near 1.1760 if bullish momentum resumes.
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