EUR/USD Stuck in Monthly Range Ahead of FOMC Decision
The EUR/USD currency pair has been stuck in a well-defined monthly range, just above support levels. Despite this week's ECB rate hike and hawkish guidance from President Lagarde, the Euro has struggled to gain traction. The monetary policy outlook remains front and center for EUR/USD as markets weigh the evolving policy outlook between the Fed and ECB.
Next week's FOMC decision will be crucial in shaping the broader outlook into the second half of September. Expectations for a hike have surged following Friday's U.S. CPI release, with market pricing now indicating an 87% probability of a rate increase next week. The relative trajectory of Fed and ECB policy expectations will be critical for EUR/USD in the days ahead.
The 52-week and 200-day moving averages converge just overhead at 1.1629/33, highlighting the first major technical hurdle for the Euro. Key resistance is eyed at 1.1745/75, while key support rests with the 38.2% retracement of the June advance and the January swing low at 1.1534/78.