EUR/USD Breaks 4-Year High Above 1.1850 Ahead of Fed Decision
Euro hits 4-year high at 1.1850 as traders position for Fed cuts, with the pair eyeing 1.2020 resistance amid widespread dollar selling pressure.
EUR/USD is trading at 1.1850 on Tuesday, breaking through the recent July high just above 1.1800 to mark a fresh four-year high dating back to September 2021. The pair has surged 1.1% this week as traders position ahead of Wednesday's Federal Open Market Committee (FOMC) decision. The widespread dollar selloff continues despite last week's weakness, with gold pushing through all-time highs while equities have stalled.
Markets are now heavily pricing in a 25-basis point cut at each of the three remaining Fed meetings this year, with tomorrow's decision widely anticipated. The European Central Bank's pause on further rate cuts is providing additional support for the euro, leaving the dollar vulnerable to further declines unless the Fed delivers a hawkish surprise. Only a more cautious stance on future cuts from the Fed appears capable of reversing the dollar's historic year-to-date decline at this point.
On the weekly chart above, EUR/USD has broken out of its recent one-month trading range between 1.1600 and 1.1750, confirming bullish momentum. Should the current level at 1.1850 hold as support, the pair appears poised to test a long-term downward trendline from February 2018, which currently sits near 1.2020. This represents a clear path higher in the near term, with technical indicators supporting continued euro strength. The breakout above the July highs removes a key resistance barrier, opening the door for an extension of the rally if the Fed confirms market expectations for its easing path through year-end.