The EUR/USD currency pair is starting the week on a slightly weaker note, surrounded by a modest gain for the US Dollar (USD). However, the absence of substantial selling pressure suggests that bearish traders should proceed with caution. At the beginning of the Asian session, the pair is trading with a slight downward bias, remaining just below the mid-1.1500s. This comes after reaching its highest level since October 2021, around 1.1630, last week. Traders are now closely watching the upcoming Federal Open Market Committee (FOMC) policy decision on Wednesday, which might influence their next moves.
Ahead of this pivotal central bank meeting, market sentiment is muted as the Federal Reserve is anticipated to resume its cycle of rate cuts. This expectation may restrain USD bulls from making aggressive bets. Additionally, signals from the European Central Bank (ECB) indicating that the end to its own rate-cutting cycle is on the horizon could support the EURO and bolster the EUR/USD pair.
From a technical standpoint, the upward movement observed over the past month has established a short-term uptrend within an ascending channel. Indicators show that oscillators remain in positive territory, implying a tendency towards further gains for the EUR/USD pair. Any potential declines might be interpreted as buying opportunities by investors seeking to capitalize on this trend.
The 1.1500 psychological level appears to provide immediate support, with further key levels lying around 1.1450-1.1445 and the trend-channel support near 1.1435-1.1430. A decisive breach below these points could push the currency pair towards the 1.1400 range, including crucial support levels around 1.1370-1.1365. On the other hand, resistance is expected at the 1.1570 level, along with the round figure of 1.1600 and the recent peak at 1.1630. A breakout above the 1.1655-1.1660 range could signal renewed momentum for bullish traders, with aspirations to reach the 1.1700 threshold.
