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EUR/USD posts modest gains on Wednesday as the last monetary policy meeting by the Fed, looms with investors seem confident that the central bank will reduce rates. Consequently, the Greenback is pressured as seen by the pair which trades at 1.1658 up 0.27%.

Euro edges higher with traders confident the Fed will ease policy, while 2026 rate-path uncertainty caps upside momentum

The Fed is expected to cut rates for the third straight meeting as expected but that is already priced by the markets. Investors are also eyeing the Summary of Economic Projections (SEP) specifically the “dot-plot” looking for cues regarding the monetary policy path towards 2026.

So far for 2026, money markets have priced in 52 basis points of easing. Nevertheless, speculation for a “hawkish cut” suggests that hawkish Fed members could agree to reduce rates in exchange for just pricing in one cut for the next year.

Hawks vs. Doves December FOMC 2025

Some of the Fed members leaning hawkish are Jeffrey Schmid, Alberto Musalem, Susan Collins and mildly Michael S. Barr. On the dovish front lies Stephen Miran, Christopher Wallen, John C. Williams and Michelle Bowman. This means that in the neutral stance lies the Fed Chair Jerome Powell, Lisa Cook, Austan Goolsbee and Philip Jefferson. As of late, Jefferson struck a slightly dovish message, while Goolsbee seemed worried about inflationary pressures.

Across the pond, in the Eurozone the docket was empty, yet European Central Bank (ECV) member Makhlouf said that he is confident that inflation in the medium-term will be at 2%, according to Bloomberg.

Earlier, ECB President Christine Lagarde said that policy is in a good place and that the bank could upgrade their projections in December.

Daily digest market movers: EUR/USD clings to gains on US Dollar weakness

• The US Dollar Index (DXY) edges lower, down 0.22% to 98.98, as the Greenback weakens broadly against major peers.
• The latest US Job Openings and Labor Turnover Survey (JOLTS) showed that the labor market remains more resilient than expected, with vacancies rising to 7.67 million in October from 7.658 million, according to the Bureau of Labor Statistics (BLS)—a sign of strengthening labor demand.
• The latest ADP 4-week average report showed that private employers added an average of 4,750 jobs per week over the four weeks ending November 22, a notable improvement from the previous period’s 13,500 decline, underscoring a pickup in hiring heading into year-end.

Technical analysis: EUR/USD rangebound below 1.1650, eyes on FOMC meeting

EUR/USD hovers around 1.1650 for a sixth consecutive session, carving out a narrow consolidation band between 1.1650 and 1.1600. Momentum seems to remain bullish, as depicted by the REaltive Strength Index (RSI), but buyers need to reclaim 1.1700 so they could challenge 1.1800 and the year-to-date high at 1.1918.

On the flip side, if EUR/UDS tumbles below 1.1650, the 50-day Simple Moving Average (SMA) near 1.1604. A decisive break beneath this zone would expose the 20-day SMA at 1.1599, followed by the 1.1500 psychological level.

(Click on image to enlarge)

EUR/USD daily chart

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