EURUSD strengthens ahead of Fed decision

EURUSD maintains its upward momentum for the second consecutive trading day as traders assess the outlook for Federal Reserve policy, with the rate currently at 1.1398. Discover more in our analysis for 29 July 2026.

EURUSD forecast: key takeaways

• The Federal Reserve meeting on Wednesday will be a key event for the currency market
• The situation in the Middle East remains a major source of uncertainty for markets
• Fresh reports of renewed hostilities in the region have once again increased investors’ focus on geopolitical risks
• EURUSD forecast for 29 July 2026: 1.1305

Fundamental analysis

The EURUSD pair continues to strengthen, rising for the second consecutive trading session. Buyers remain in control, with the key support level for the pair at 1.1350. The nearest significant resistance level is located at 1.1470, and a breakout above it could reinforce the upward move.

Market participants are focused primarily on the upcoming Federal Reserve meeting, with the results due on Wednesday. Traders expect the regulator to keep the current interest rate unchanged. However, market expectations remain mixed: the probability of a 25-basis-point rate hike in July is estimated at approximately 30%, while the likelihood of a similar move in September exceeds 50%.

The situation in the Middle East remains an additional factor for the currency market. Oil prices had previously declined after a temporary halt to reciprocal strikes between the US and Iran, while US President Donald Trump’s comments about a possible agreement helped reduce the geopolitical premium in energy prices. However, oil prices resumed their upward trajectory on Wednesday amid renewed tensions and fresh reports of military clashes in the region.

Technical outlook

The EURUSD rate continues to recover, and buyers have managed to consolidate above the EMA-65, indicating a gradual strengthening of bullish momentum. However, despite the local rise, the pair is still trading within a descending channel, so the current movement is viewed as a correction within a broader bearish trend. Today’s EURUSD forecast suggests that the decline may resume, with a potential target at 1.1305.

The position of the Stochastic Oscillator provides an additional signal in favour of a possible continuation of the downward move. The oscillator values have approached the descending resistance line, indicating that the upward correction is losing momentum and increasing the likelihood of a reversal in favour of sellers. A breakout below the lower boundary of the short-term corrective channel, followed by consolidation below the 1.1375 support level, would confirm the bearish scenario. In this case, sellers could increase pressure and push the price lower.

However, an alternative scenario remains possible. If buyers break above the upper boundary of the descending channel and gain a foothold above the 1.1425 resistance level, this would signal weakening bearish pressure and a possible continuation of the recovery. In this case, the EURUSD pair could gain momentum for further growth, with the nearest target at 1.1495.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (intraday)
• Trend: downward
• Key resistance levels: 1.1415 and 1.1450
• Key support levels: 1.1375 and 1.1325

EURUSD trading scenarios for today

Main scenario (Sell Stop)

A breakout below the lower boundary of the bullish corrective channel, followed by consolidation below 1.1375, would indicate increased bearish pressure and create conditions for opening short positions.

• Take Profit: 1.1305
• Stop Loss: 1.1400

Alternative scenario (Buy Stop)

A breakout above the 1.1425 resistance level would increase bullish pressure and signal renewed upward momentum.

• Take Profit: 1.1495
• Stop Loss: 1.1385

Risk factors

Risks to the EURUSD bearish scenario include a possible increase in demand for the euro if the price breaks above the 1.1425 resistance level and subsequently consolidates above the upper boundary of the descending channel. A more dovish stance from the Federal Reserve could pose an additional risk for sellers.

Summary

In the short term, the EURUSD pair is expected to complete its bullish correction, but the key factor will be the market’s reaction to the Federal Reserve’s decision. If selling pressure persists and the pair returns below 1.1375, it may resume its decline towards 1.1305.

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