EUR/USD Consolidates Below Key Resistance Amid Fed-ECB Policy Divergence

The EUR/USD currency pair is consolidating below key resistance levels near 1.0900, according to analysts at Scotiabank. This consolidation reflects a market that is cautiously positioned ahead of upcoming central bank meetings and economic data releases.

The euro's inability to push higher stems largely from the policy outlook divergence between the Federal Reserve and the European Central Bank. While the Fed has signaled a slower pace of rate cuts, the ECB has maintained a more accommodative stance, which tends to weigh on the euro.

Economic data from the eurozone has shown signs of stabilization, but growth remains sluggish compared to the US. This disparity in economic performance further supports the dollar, limiting the euro's upside potential.