The EURUSD pair is testing a key resistance zone around the 1.1745 level due to a weaker US dollar, as the FOMC decision approaches. The USD faced pressure after an aligned US CPI report and surprisingly high initial jobless claims, which reached their highest since 2021.<\/p>\n
The jobless claims were affected by a large spike in Texas, but still supported expectations for three rate cuts by year-end. The US dollar has remained rangebound, though increased dovish Fed bets have impacted it, with the bearish positioning possibly being at its peak.<\/p>\n
If future rate cuts lead to stronger economic activity, the 2026 rate cuts could be reconsidered, supporting the dollar. However, the current trend remains downward, needing strong data for a reversal. The ECB maintained its rates, with expectations of only minor easing by 2026.<\/p>\n
On the daily chart, the EURUSD was rejected near 1.1789 and remained in range; a spike could see sellers target a drop to 1.16 support. Buyers aim for a break towards 1.1831. On the shorter-term charts, similar dynamics persist, with sellers positioned near 1.1745 and targeting lower levels, while buyers look to break higher.<\/p>\n
Upcoming events include US Retail Sales data, FOMC policy announcement, and US Jobless Claims figures.<\/p>\n
The EURUSD is pressing against a significant resistance zone near 1.1745 as we await this week’s FOMC decision. The dollar’s weakness was amplified last week after initial jobless claims unexpectedly jumped to 415,000, a level we haven’t seen since the post-pandemic recovery period of late 2021. This data, combined with an in-line CPI report showing inflation at a manageable 2.8%, has solidified bets on further Federal Reserve easing.<\/p>\n
This monetary policy divergence is the core of the current market dynamic. Markets are now fully pricing in a third 25-basis-point cut at this week’s meeting, which would take the Fed Funds Rate to a 4.50-4.75% target range. In contrast, the European Central Bank has held its main rate steady at 3.50% for three consecutive meetings, signaling the end of its easing cycle which began earlier this year.<\/p>\n
For derivative traders, this creates a clear setup around the current range. We see sellers stepping in near the 1.1745-1.1789 resistance, a strategy that has worked during the pair’s climb from the 1.10 levels we saw at the start of 2025. This approach positions for a move back towards the 1.1600 support level, betting that the dollar’s bearish sentiment may be stretched.<\/p>\n
Alternatively, traders should be prepared for a breakout if the upcoming US data or FOMC announcement is more dovish than anticipated. A decisive move above 1.1789 would be a strong signal for buyers to target the next level of resistance around 1.1831. The key trigger for this would be the Fed signaling a faster pace of cuts for the remainder of the year.<\/p>\n
Options can be an effective way to navigate this event risk. Buying EUR\/USD put options with a strike price below 1.1700 offers a defined-risk way to position for a drop back to the 1.1600 support. Conversely, traders anticipating a dovish surprise from the Fed could purchase call options with a strike above 1.1800 to capture potential upside from a breakout.<\/p>\n
All eyes will be on tomorrow’s US Retail Sales figures and, most importantly, the FOMC policy announcement on Wednesday. These events will likely determine whether the pair remains range-bound or the upward trend accelerates. We will also be watching the weekly jobless claims data on Thursday to see if last week’s spike was an anomaly.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EURUSD tests resistance as dollar weakens; traders eye FOMC, jobless claims, and retail sales for direction.<\/p>\n","protected":false},"author":62,"featured_media":16966,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-30773","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/30773","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=30773"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/30773\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16966"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=30773"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=30773"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=30773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}