The US JOLTS Job Openings data is anticipated to provide insights into the labour market prior to the Federal Reserve’s meeting. The EUR/USD rate has dropped on the daily chart, now trading at 1.1635 after it failed to surpass 1.1650.
Market participants are hesitant as they await the Fed’s monetary policy decision, with futures markets predicting a nearly 90% likelihood of a 25-basis-point rate cut. The focus will be on the policy statement’s tone, interest rate projections, and Chairman Jerome Powell’s press conference.
Labor Market Insights
Before the Fed’s announcement, the US ADP Employment Change report and JOLTS Job Openings will offer a glimpse into the US labour market status. Meanwhile, the Euro was at its strongest against the Japanese Yen recently.
The US Dollar holds onto Monday’s gains amid higher US Treasury yields and risk aversion due to Japan’s recent earthquake. President Donald Trump has criticised Chairman Powell for not reducing borrowing costs more rapidly.
JOLTS Job Openings, expected to remain steady at 7.2 million, are the day’s key focus. In the Eurozone, Bundesbank President Joachim Nagel will likely maintain the current monetary policy stance. Technical analysis indicates potential EUR/USD pressure towards recent lows unless it can break above 1.1650.
With the Federal Reserve’s decision approaching, the market has almost fully priced in a 25 basis point rate cut. This high probability, currently near 90%, means the cut itself is unlikely to cause a major shock. We should therefore focus on Chairman Powell’s forward guidance and the interest rate projections for future moves.
Expectations And Economic Indicators
The expectation for a rate cut is supported by a consistently cooling labor market. Job openings data from JOLTS, expected around 7.2 million, would continue a long-term decline from the peak of over 12 million we saw back in 2022. This steady fall in openings gives the Fed cover to ease policy as hiring conditions soften.
Recent labor statistics reinforce this view of a slowing economy. For instance, the ADP employment report for November 2025 showed private payrolls increasing by only 103,000, which missed analyst expectations and pointed to a hiring slowdown. We will be watching the next ADP release closely for confirmation of this trend ahead of the Fed meeting.
Despite the near certainty of a rate cut, which is typically negative for a currency, the US Dollar is holding firm. This strength is being driven by short-term risk aversion and a rise in US Treasury yields. This explains why EUR/USD has struggled to break above the 1.1650 resistance level and is currently trading lower.
Our focus should be on the policy divergence between the US and Europe. While we anticipate a Fed cut, European officials like Joachim Nagel are signaling an intention to keep rates unchanged for now. This contrast will be the primary driver of the EUR/USD pair once the Fed’s announcement is made.
For derivative traders, this setup suggests positioning for volatility around the Fed’s statement. The key EUR/USD level to watch is 1.1650; a dovish tone from Powell could fuel a break above it, targeting the 1.1680 highs. Conversely, any hint that this cut is a one-off event could see the pair fall toward recent lows, as the dollar would rally on a less-dovish-than-expected outlook.
