The EUR/USD pair is showing a downside tilt after the Federal Reserve’s cautious statement on interest rates. Fed Chair Powell’s upcoming press conference is eagerly awaited by investors as the central bank’s language cooled rate cut bets for September, albeit slightly.
Despite market expectations, the Fed kept interest rates unchanged at 5.25%-5.5%. However, there is still a 100% probability of a rate cut in September, with key US data playing a crucial role in determining the Fed’s next move. Investors are looking for softer economic data to support a rate cut decision on September 18.
US Nonfarm Payrolls (NFP) data is in focus for Friday, with forecasts indicating a decline in hiring but steady Average Hourly Earnings.
EUR/USD Technical Analysis
The EUR/USD pair is struggling near the 1.0800 handle, with resistance at the 200-hour Exponential Moving Average (EMA) at 1.0844. Despite finding support at the 200-day EMA at 1.0798, bearish momentum persists as the pair moves lower from the recent swing high above 1.0940.
Overall, the Fed’s cautious tone and market expectations of a rate cut in September are driving the EUR/USD pair’s movements. Investors should keep an eye on upcoming US economic data releases to gauge the likelihood of a rate cut next month.