The EUR/USD pair advances around 0.36%, trading close to the 1.1900 level during Monday’s Asian session. The pair gains strength as the US Dollar continues to weaken, extending last week’s losses ahead of the Federal Reserve’s monetary policy decision scheduled for Wednesday.
At the time of writing, the US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, is down nearly 0.4% around the 97.00 mark, its lowest level in four months.
The US Dollar remains under strong selling pressure as investors stay concerned about the United States’ long-term trade relationships with key partners. These worries persist even after recent geopolitical frictions and trade tensions between Washington and several European Union members have eased.
Market expectations suggest the Federal Reserve will keep interest rates unchanged within the 3.50%–3.75% range on Wednesday, according to the CME Fed Watch tool. This would mark the Fed’s first pause following three consecutive rate cuts. The central bank lowered rates by a total of 75 basis points in late 2025 to support a weakening labor market.
Looking ahead, the Euro’s direction this week will largely depend on the release of preliminary Q4 Eurozone Gross Domestic Product (GDP) data and Germany’s Harmonized Index of Consumer Prices (HICP) figures for January.
EUR/USD Technical Outlook
EUR/USD trades near 1.1866 at the time of writing, holding comfortably above the 20-day Exponential Moving Average (EMA) at 1.1713. This setup reflects a bullish short-term bias, with the rising slope of the EMA confirming strengthening upside momentum.
The 14-day Relative Strength Index (RSI) stands at 69.49, hovering just below overbought territory and indicating strong buying interest.
With momentum remaining firm, the pair is likely to retest its four-year high at 1.1919 in the near term. A sustained daily close above this level could open the door for further gains. On the downside, the 20-day EMA is expected to act as a key support area for the pair.
