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EUR/USD holds steady ahead of the FOMC rate decision

EUR/USD is holding steady above 1.1650 amid broad U.S. dollar weakness ahead of the Federal Reserve interest rate decision later today and following hawkish rhetoric from ECB officials.

The Fed is widely expected to cut interest rates by 25 basis points. However, the policy path for 2026 remains highly uncertain, putting focus on the Fed statement, Federal Reserve chair Jerome Powell's press conference, and the dot plot.

The market is pricing in two rate cuts in 2026, whilst the September Fed dot plot indicated 1 rate cut was coming. If the Fed leaves the dot plot unchanged, that could give the US dollar a boost into the end of the year.

However, it's also worth keeping in mind that the data the Fed is using is dated, with the latest US inflation figures and non-farm payrolls still not released owing to the government shutdown.

At the same time, investors are scaling back expectations for any further ECB rate cuts after governing council member Simkus said the central bank does not need to cut rates further, with inflation more or less on target. His comments echoed those from Isabel Schnabel earlier this week.

In France, political risk is slightly higher after the National Assembly narrowly approved next year's Social Security bill by a margin of 13 votes, offering a temporary base to a lack of a new minority government.

EUR/USD forecast – technical analysis

EUR/USD trades within a familiar trading zone, capped by the 1.1650 resistance zone and limited by the 1.15 support zone. The price recovered from the 1.15 support zone, recovering above the 50 SMA to the 1.1650-1.17 level.

Buyers, supported by the RSI above 50 will look to extend gains above 1.17 towards 1.1780, the October high.

Immediate support is at 1.16, the 50 SMA. A break below here opens the door to the 1.15 support zone and the 200 SMA. A break below here creates a lower low.
 

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Crude oil tracks peace talks and the Fed rate decision

Oil prices are holding steady after a two-day decline as investors continued to track diplomatic efforts to end the war in Ukraine and also look ahead to the FOMC rate decision later today.

Investors are closely monitoring diplomatic efforts to end the Russia-Ukraine conflict, which could reduce the geopolitical risk premium on oil and lead to Russian oil returning to the broader market. However, progress appears slow, as President Zelensky reaffirms his refusal to cede land to Russia and Putin shows few signs of softening.

The market is also monitoring the Federal Reserve's rate decision later today, with a 25-basis-point rate cut expected. The focus will be on what comes next. Should the Fed indicate more rate cuts are coming, this could improve the demand outlook for oil.

Looking ahead, key reports from the IEA and OPEC later this week could bring clearer signals regarding supply and demand.
 

Oil forecast – technical analysis

 Oil continues to trade in a descending channel dating back to early July. The price is being guided lower by the 50 SMA and recently faced rejection at 60.00, rebounding lower to 58.30 at the time of writing.

Sellers will look to extend the move lower towards 57.10, the November low. A break below here opens the door to 56.00, the October low ahead of 55.30, the May low.

Buyers would need to settle above 60.00 to extend gains towards 62.60, the October high. A rise above here exposes the 200 SMA at 63.65.
 

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