The EUR/USD currency pair remains close to the 1.1550 level amid a cautious trading environment in the European session. Market participants are awaiting key economic indicators from the United States and the Federal Reserve’s policy decision, which are likely to influence the near-term direction of the pair.
Following a decline of over 1.5% across two consecutive sessions, the EURO has stabilized as traders adopt a wait-and-see approach ahead of important economic releases and the Fed’s upcoming policy statement. The US dollar maintained its strength on Tuesday, which kept the currency pair under pressure. However, a series of mixed macroeconomic data from the US helped limit further gains in the dollar. Consumer confidence improved in July, rising to a reading of 97.2, providing a positive sign for consumer sentiment. Conversely, the JOLTS job openings data fell short of expectations, indicating a potential slowdown in the labor market.
Attention now turns to the upcoming US economic reports, including the ADP employment change and second-quarter GDP figures. Markets anticipate private-sector payrolls to increase by approximately 78,000, a notable recovery from June’s decline. The GDP data is expected to show a modest growth of 0.2% annually, contrasting the previous quarter’s contraction. A significant deviation from expectations — particularly a weaker-than-anticipated GDP — could weigh on the US dollar, influencing the overall trading tone.
Later in the day, the Federal Reserve is expected to keep interest rates steady within a range of 4.25% to 4.5%. Market participants will be scrutinizing the policy statement for hints of future easing, especially recent signals from some officials suggesting a possible rate cut in September. The market currently prices in around a 63% probability of a rate reduction during that period, implying ongoing uncertainty about the dollar’s short-term trajectory.
Meanwhile, economic data from Germany showed a better-than-expected GDP growth rate of 0.4% in the second quarter, providing some Eurozone optimism. Nonetheless, technical analysis indicates that the EURO remains in a primarily bearish phase, with the RSI below key thresholds and support levels identified around 1.1540 and 1.1500. Resistance is noted near 1.1600, with potential for further upward movement limited unless stronger bullish momentum emerges.
