Fed vs ECB: who will bring down EURUSD

The EURUSD pair has frozen in anticipation of interest rate decisions from the Federal Reserve and the ECB, with quotes testing the 1.1700 level. Find out more in our analysis for 29 April 2026.

EURUSD forecast: key takeaways

• Germany’s Consumer Price Index (CPI): previously at 2.7%, projected at 3.0%
• Fed interest rate meeting
• ECB meeting on Thursday
• EURUSD forecast for 29 April 2026: 1.1785

Fundamental analysis

The EURUSD forecast takes into account that the pair has stalled in anticipation of a double blow from central banks amid a geopolitical deadlock. On Wednesday morning, quotes are consolidating around 1.1700, partly recovering from a pullback to two-week lows.

The key events of the week are the Federal Reserve and ECB meetings, where interest rate decisions will be made. The Fed will announce its decision today, with the ECB decision due tomorrow. Both regulators are expected to keep rates unchanged: the Fed at 3.50–3.75%, and the ECB at 2.00%. The market’s focus will be on the tone of the accompanying statements rather than on the figures themselves.

The market is revising rate expectations in favour of the dollar, with the likelihood of a Federal Reserve rate cut, which had been discussed only recently, virtually disappearing. Moreover, the yield curve is beginning to price in the possibility of a rate hike if the inflation shock from the closed Strait of Hormuz does not ease. This is a fundamental shift that supports the dollar.

The US President rejected Tehran’s proposal to reopen the strait in exchange for lifting the blockade. No new round of negotiations is scheduled, meaning tensions will persist, fuelling demand for the dollar as a safe-haven asset.

Inflation in Germany continues to rise, putting the ECB in a bind – today’s German CPI data, according to the forecast for 29 April 2026, may rise to 3.0% year-on-year from 2.7% in March. On the one hand, this is an argument for the ECB hawks. On the other hand, rising prices amid a slowing economy create a classic stagflation scenario, leaving the regulator with no good options.

The EURUSD rate is on edge ahead of the double announcement from central banks. The dollar is receiving dual support: from the geopolitical factor as a safe haven and from revised rate expectations in favour of keeping rates high. At the same time, the euro is balancing between the need to fight inflation through rate hikes and the risk of derailing already weak economic growth in the eurozone.

Technical outlook

On the H4 chart, the EURUSD pair formed a Hammer reversal pattern near the lower Bollinger Band. At this stage, quotes may form an upward wave following the signal. Since they remain within an ascending channel, the 1.1785 resistance level may act as the upside target. A breakout above this level would open the way for continued upward momentum.

At the same time, today’s EURUSD forecast also suggests another scenario. Quotes may form a corrective wave and test the 1.1655 support level. After rebounding, they may continue the uptrend, with the next upside target at 1.1900.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (Intraday)
• Trend: range
• Key resistance levels: 1.1785 and 1.1900
• Key support levels: 1.1655 and 1.1500

EURUSD trading scenarios for today

Main scenario (Buy Stop)

Consolidation above 1.1785 would confirm an attempt at recovery amid reduced demand for safe-haven assets and a stabilising external environment. In this case, the pair may continue its upward trajectory and test the 1.1900 level.

• Take Profit: 1.1900
• Stop Loss: 1.1750

Alternative scenario (Sell Stop)

A breakout below 1.1655 would intensify pressure amid expectations of tighter Federal Reserve monetary policy and persistent geopolitical uncertainty. Against this backdrop, quotes may test the 1.1500 mark.

• Take Profit: 1.1500
• Stop Loss: 1.1685

Risk factors

Risks to growth are linked to mounting tensions in the Middle East and renewed demand for the dollar as a safe-haven asset. An additional factor could be more hawkish Fed rhetoric, such as an interest rate hike, which would limit the EURUSD’s upside potential.

Summary

The EURUSD pair is awaiting interest rate data from the Federal Reserve and the ECB. EURUSD technical analysis suggests growth towards 1.1785 after the correction is complete.

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