EUR/USD holds near $1.165 as traders await Fed decision and U.S. data

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EUR/USD price update

Highlights

- EUR/USD hovers near $1.165 as traders brace for the Fed’s rate decision and Powell’s guidance

- Dollar supported by firmer Treasury yields and safe-haven interest after the Japan earthquake

- Key resistance at $1.1664 remains unbroken, leaving the pair inside a tight mid-week range

Dollar steady as markets brace for Powell guidance

The euro spent much of the session drifting inside a narrow corridor as traders waited for ADP jobs data, the JOLTS report, and Jerome Powell’s press conference. U.S. yields stayed firm, giving the dollar a mild advantage. Safe-haven flows also supported the greenback following the earthquake off Japan’s northeast coast.

The dollar index held near six-week lows at 98.75 but avoided deeper losses. Futures markets price a 90 percent chance of a 25-basis-point cut. The tone of the Fed’s forward guidance remains the key driver. Any adjustment to the dot plot or hints about Powell’s potential successor in May will influence near-term volatility.

Euro-side developments offered little contrast. The Sentix survey improved slightly, but not enough to shift sentiment. ECB officials continued to send mixed signals. Isabel Schnabel acknowledged market expectations for higher rates, while other policymakers resisted tightening. Tuesday’s heatmap showed the euro stronger only against the yen, with softer performance against most majors.

Technical picture shows recovery, but resistance still dominates

EUR/USD is stabilizing after recovering from the $1.15–$1.153 support zone. That bounce allowed the pair to reclaim the lower boundary of its earlier descending channel, lifting price toward the 0.618 Fibonacci retracement at $1.1664. This remains the decisive level.

EUR/USD price analysis (Source: TradingView)

Every attempt to sustain gains above $1.1664 has failed. Tuesday’s intraday rejection near $1.16518 confirmed that buyers still lack momentum.

A second resistance cluster at $1.1728 caps the medium-term range and rejected multiple bullish attempts in summer.Short-term indicators show mild improvement. The Parabolic SAR flipped bullish, placing dots under price. The Supertrend indicator near $1.1504 continues to act as structural support. Consolidation between $1.16 and $1.166 reflects anticipation, not conviction.

The immediate levels define the next phase. A break above $1.1664 opens a path toward $1.173. Failure to clear these barriers brings $1.1600 back into focus, followed by a retest of $1.153 and the Supertrend floor near $1.1500. A hawkish shift from Powell would test these supports quickly.

Pair waits for catalyst as macro bias leans dollar-positive

Macro sentiment still leans slightly in the dollar’s favour. The market’s focus on Powell’s tone, the committee’s cohesion and uncertainty around longer-term leadership at the Fed keeps EUR/USD in a holding pattern. Without fresh Euro-area catalysts, U.S. policy direction will shape the next move.

For now, the pair remains trapped between firm resistance overhead and dependable support beneath. The recovery has improved the structure but not altered the trend. Wednesday’s policy message is likely to determine whether stabilization evolves into a sustained reversal or fades into another range-bound pause.

In our earlier EUR/USD commentary, we highlighted that a break above the $1.1664 Fibonacci barrier was essential for any meaningful bullish shift. The pair continues to stall at this line, reinforcing the view that buyers need stronger macro support before momentum can change.

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