Wall Street closes at a record for the first time since end of January
EUR/USD is consolidating near 1.1532 on Wednesday, with markets adopting a wait-and-see stance ahead of the Federal Reserve’s decision.
The Fed is widely expected to keep rates unchanged. Investor attention will focus on Jerome Powell’s comments, particularly on how oil market volatility may influence the policy outlook.
Rising energy prices are increasing inflation risks, while labour market signals remain mixed and offer little guidance on rates. Markets do not expect policy easing before September or October and are currently pricing in just one rate cut before year-end.
Geopolitical tensions continue to weigh on sentiment. Iran is intensifying attacks on the region’s energy infrastructure, while US allies have not supported Donald Trump’s call to ensure shipping security through the Strait of Hormuz.
Technical Analysis
On the H4 chart, EUR/USD is forming a consolidation range around 1.1536. A move higher towards 1.1600 is expected as a near-term target, followed by a potential pullback to 1.1539. Technically, the MACD supports this scenario: its signal line remains below zero but is pointing firmly upwards, indicating building bullish momentum.
On the H1 chart, the pair is developing the next upward leg towards 1.1596. After reaching this level, a decline to 1.1530 is expected, followed by a renewed advance towards 1.1650. The Stochastic oscillator confirms this structure, with its signal line above 50 and rising towards 80.
Conclusion
EUR/USD remains in a holding pattern ahead of the Federal Reserve’s decision, with markets awaiting Powell’s assessment of how oil market volatility may shape the policy path. With only one rate cut now priced in before year-end and Middle East tensions showing no signs of easing, US dollar’s near-term direction will depend on whether the Fed signals patience or heightened concern over inflation.
Technical indicators point to scope for a short-term rebound, though the broader trend will be determined by the tone of Wednesday’s announcement.
Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.