Major currency pairs are showing muted movements as investors await the outcome of today’s Federal Reserve meeting, scheduled for this evening. Market participants are adopting a cautious stance, locking in positions and waiting for the tone of Fed Chair Jerome Powell’s remarks.

Investors are hoping for clearer guidance on the future path of interest rates. Despite inflation remaining above target, signs of slowing economic growth in the US and a cooling labour market are fuelling speculation that a shift in monetary policy could occur in the second half of the year. Markets have already partially priced in a rate cut for September, and any hints from Powell in this direction may put pressure on the dollar and reignite bearish momentum.

EUR/USD has stabilised around 1.1370, showing limited fluctuations ahead of the Fed announcement. GBP/USD is holding above the 1.33400 level, remaining within a narrow range. The pound is consolidating after a volatile start to the week, with future direction likely to be determined by the Fed’s decisions. Today's statement and Powell's press conference may set the tone for currency markets in the weeks ahead. Any indications of a policy shift could trigger higher volatility and increased risk appetite.

EUR/USD

Following a false breakout below the 1.1280 support, EUR/USD buyers managed to push the price back above 1.1300. Technical analysis suggests a possible test of the medium-term range upper boundary near 1.1400. A confident move above this level may lead to further gains towards the 1.1540–1.1500 area. Conversely, a clear break below the recent low at 1.1260 could trigger a deeper bearish correction.

Key events that may affect EUR/USD today (GMT+3):

• 12:00 – German Factory Orders
• 21:00 – Fed Interest Rate Decision
• 21:30 – Fed Open Market Committee Press Conference
  

GBP/USD

GBP/USD buyers are attempting to challenge the recent high near 1.3440. While the 1.3400 resistance level is currently holding back the bulls, a strong news driver could push the price towards key resistance in the 1.3600–1.3500 range. On the other hand, a move below 1.3250 may open the way down to 1.3200–1.3100.

In addition to the Fed meeting, the following UK events could impact GBP/USD (GMT+3):

• 11:30 – UK Construction PMI
• 12:00 – UK 5-Year Gilt Auction
• Tomorrow, 09:00 – UK Halifax House Price Index

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