EURUSD Gasping for Air Ahead of FED Decision

The EURUSD currency pair is feeling the weight of the bearish pressure, with the US Dollar showing resilience at the start of the week, setting the stage for the pivotal Federal Reserve interest rate decision. Last week’s US PCE data matched expectations, maintaining the year-over-year figure at 2.6%. With this number staying below the 3% mark, the market has largely factored in the conclusion of the tightening cycle. 

All eyes are now on Jerome Powell’s post the Wednesday interest rate decision to assess whether early rate cuts are on the horizon. The CME FedWatch Tool currently indicates a 50/50 chance of rate cuts in March, making Wednesday a key influencer in the market’s reassessment of this probability. Meanwhile, the ECB in the Eurozone opted to keep rates unchanged last week, emphasizing that it’s premature to discuss rate cuts. A similar stance from the Federal Reserve might further strengthen the US dollar to the detriment of the EURUSD currency pair. 


On the 4H chart, the currency pair has had multiple attempts to break out of the descending wedge pattern. However, it failed to gain sustainable traction and has fully retraced each attempt at a bullish run. However, the interest rate decision could inject some meaningful volume into the pair, potentially igniting another directional move. 

The resistance at 1.0848 is currently preventing a breakout from the wedge. With low volumes expected in the upcoming two days, the pair could maintain its range below this level. However, if it breaks above, resistance at 1.0860 could be the first hurdle to cross. Above this level, clearance of the 25-SMA (green line) and 50-SMA (blue line) could signal a sustainable breakthrough and shift in momentum, leading to a retest of resistance at 1.0885. 

Conversely, if the pair fails to exceed the 1.0860 level in the upcoming week, it could signal that the bears still maintain the upper hand. A pullback toward lower support at 1.0831 and 1.0817 then becomes likely, with neckline support established at 1.0800 in the longer term.  


The EURUSD currency pair remains under pressure ahead of a crucial week in the foreign exchange markets. The Federal Reserve’s interest rate decision could drive directional price action, with resistance at 1.0860 a pivotal one to watch if a falling wedge breakout takes place. 

Sources: Koyfin, Tradingview, CME Group 

Piece written by Tiaan van Aswegen, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.

Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.

CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.