EUR/USD remains hobbled on the south side of 1.1000.
The Fed held interest rate steady, as investors expected.
Despite downside risks to growth and inflation, Fed still sees rate cuts in 2025.
EUR/USD remained bolstered above the 1.0900 handle on Wednesday, propped up by a general easing in Greenback flows after the Federal Reserve (Fed) met markets in the middle and held rates steady for another meeting. Fed Chair Jerome Powell noted that growth projections for 2025 have been significantly hindered by the Trump administration's erratic policy of announcing trade tariffs on social media only to later retract them. As a result, the Federal Open Market Committee (FOMC) revised its end-2025 Gross Domestic Product (GDP) forecast to 1.7%, a sharp decline from the 2.1% estimate shared in December.
Fed's Powell: We are not going to be in any hurry to move on rate cuts
Additionally, the median dot plot suggests that the end-2025 interest rate will remain at 3.9%, indicating little change since the last policy meeting. The FOMC plans to begin slowing down its balance sheet runoff starting in April. Rate markets continue to signal a greater than 50% chance of a quarter-point rate cut in June, with most rate traders assigning a 65% probability of a quarter-point or larger cut on June 18.
Despite rising risks to the US economy from lagging growth metrics and increasing concerns that the US's erratic tariff policy could trigger both new inflation and an economic recession simultaneously, Fed Chair Jerome Powell stated on Wednesday that the current economic outlook remains generally healthy, and the Fed is not in a hurry to alter its expectations of at least two more rate cuts later in the year.
European Central Bank (ECB) President Christine Lagarde will be making an appearance on Thursday, and the latest round of the EU’s Leadership Summit also kicks off. ECB talking points are highly unlikely to produce nearly as many sparks as the Fed’s outing on Wednesday, so Fiber impacts are set to remain muted.
EUR/USD price forecast
From a technical viewpoint, the Stochastic Oscillator is currently in overbought territory above 80.00, though it is showing signs of flattening, indicating a reduction in bullish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) displays flat green bars, suggesting a lack of strong trend conviction. Collectively, these indicators imply that the pair may enter a consolidation phase prior to making a definitive move.
Looking ahead, resistance is positioned at the 1.1000 level, which has historically served as a significant barrier. On the downside, initial support can be found around 1.0850, with more substantial support near the 20-day moving average close to 1.0800. A decline below these thresholds could trigger a corrective reaction, while consistent trading above 1.0900 would maintain the overall bullish outlook.
EUR/USD daily chart
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
