is slightly lower on Wednesday, trading with a minimum move around 1.1708. The market is preparing for a Federal Reserve meeting, which could be Jerome Powell's last before his term ends in May.
The regulator is expected to keep rates unchanged. However, investors will closely monitor their assessment of how the Middle East conflict is affecting the economy.
Other major central banks, including the ECB, the Bank of England and the Bank of Canada, will also announce policy decisions this week. The Bank of Japan has already given a more aggressive signal by keeping rates unchanged.
Geopolitics continue to support the US dollar. Talks between the United States and Iran have stalled, the Strait of Hormuz remains closed and inflation risks are rising.
According to media reports, Donald Trump was dissatisfied with Iran's latest proposal and insisted that the nuclear issue must be included in the negotiations from the beginning.
Technical analysis
On the EUR/USD H4 chart, the pair is trading within a consolidation range around 1.1688, which currently extends to 1.1675. A move lower is likely below this level, with a possible drop towards 1.1656 and possibly 1.1616. Technically, this scenario is confirmed by the MACD indicator, with its signal line below zero and pointing firmly downwards, reflecting continued bearish momentum.
On the H1 chart, EUR/USD is developing a downward movement towards 1.1685. There could be a corrective bounce to 1.1705, before a further decline towards 1.1650 and potentially 1.1616. Technically, this scenario is confirmed by the stochastic oscillator, with its signal line below 80 and pointing firmly towards 20.
Conclusion
EUR/USD is trading sideways ahead of the Federal Reserve meeting, with markets focused on how authorities assess the economic impact of the Middle East conflict. While the Federal Reserve is expected to keep rates steady, this meeting is particularly significant as it may be Jerome Powell's last before his term ends in May. Geopolitical pressures remain strong:
Talks between the United States and Iran have stalled, the Strait of Hormuz is closed and inflation risks are rising, all of which continue to support the US dollar. Additional central bank decisions from the ECB, BoE and BoC this week contribute to the cautious market tone. Technically, the euro looks vulnerable, with indicators pointing to a further decline towards 1.1650-1.1616 in the near term. The direction will likely depend on the Fed's tone regarding both rates and geopolitical risks.
