The EUR/USD pair is consolidating near 1.1360, poised at a critical point within a symmetrical triangle. Current price action is close to potentially breaching the triangle’s pattern, marking an important juncture for the currency pair’s trend direction.

European data shows a mixed economic landscape, with Germany’s factory orders increasing by 3.6% in March, surpassing the projected 1.3%. Despite this positive note from Germany and a favourable current account from France, weak retail sales in Italy and the Eurozone have constrained the Euro’s momentum.

Federal Reserve Decision Anticipation

In the US, attention is fixed on the upcoming Federal Reserve decision. While no change in policy is expected, the tone of Fed Chair Powell’s statement could influence US Dollar movements, affecting EUR/USD’s immediate course.

The EUR/USD is currently trading just below its 20-day Simple Moving Average. The Relative Strength Index suggests neutral momentum, with a breakout above 1.1400 indicating a potential rise, and a drop below 1.1240 suggesting a possible decline.

Monitoring the 1.1400-1.1240 range is key as Fed Chair Powell’s remarks could drive increased market volatility. Price movements in this range can offer clues to the EUR/USD’s next directional move.

Market Volatility and Triangle Formation

The EUR/USD pair, hovering near the apex of its symmetrical triangle formation around 1.1360, suggests markets are gearing up for a directional shift. This pattern tends to compress until a breakout becomes more likely than not, and with volatility appearing somewhat muted for now, the likelihood of a sharper move coming soon increases. Movements above 1.1400 or below 1.1240 may indicate that the period of choppy consolidation has come to an end.

Germany’s factory figures, outpacing expectations, provided a brief tailwind. A 3.6% rise in orders hints at underlying industrial stability, though it stands in contrast to softer demand indicators emerging from Italy’s retail channels and broader Eurozone consumption. The mixed batch of numbers, while offering certain pockets of strength, does little to generate any consistent Euro buying pressure. The contrast between robust German orders and weak consumer activity elsewhere has left us short of conviction on the Euro’s near-term direction.

As Europe balances between economic bright spots and soft patches, focus shifts heavily toward the US. With the Federal Reserve’s upcoming meeting unlikely to announce new policy measures, the spotlight turns to Powell’s tone. Over recent months, markets have become increasingly sensitive to nuances in forward-looking language, and even subtle shifts in emphasis can push traders decisively into one trade or out of another. Powell’s remarks will be dissected not only for what is said but what is implied in the omissions or hesitations.

We are currently seeing levels below the 20-day SMA, which has flattened. This reflects indecision and a balance in buying and selling pressures. The RSI not diverging in any direction underscores the lack of strong conviction in this market, reinforcing that we remain stuck in a range with limited directional cues.

The 1.1400 and 1.1240 boundaries are now our guideposts. Moves beyond either range edge may not only mark a shift in daily bias but may trigger algorithmic or option-related flows, adding fuel to any breakout. That makes Powell’s messaging highly relevant—not as a trigger for actual policy shifts, but as a catalyst for market positioning and sentiment recalibration.

Momentum-based strategies should be held at the ready but remain on the sidelines for now. In these conditions, a reactive approach based on confirmed moves rather than anticipation provides more clarity. Watching the triangle’s support and resistance edges closely, particularly in conjunction with Powell’s speaking schedule, offers the cleanest view of what may drive positioning in the days ahead.

Volumes have remained stable, neither depressed nor exuberant, implying liquidity exists for directional positions should a breakout occur. However, patience remains a virtue in this context.

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