EUR/USD Recovers Above 1.1550 as Markets Brace for Fed Decision and Eurozone GDP

The EUR/USD pair edges higher near 1.1560 in the early hours of Wednesday’s Asian session, breaking its four-day losing streak. However, traders remain cautious ahead of two major events: the Federal Reserve’s interest rate decision and the release of Eurozone and German Q2 GDP data.

Key Highlights:

• EUR/USD rebounds slightly after four days of losses.
• The Fed is expected to keep rates unchanged for a fifth straight meeting.
• Eurozone and German GDP reports could influence EUR strength.
• Uncertainty around US-EU trade negotiations adds pressure on the Euro.

The Federal Reserve is set to announce its policy verdict later today, with markets widely anticipating a hold on interest rates. Still, traders are closely watching for signals on future rate cuts. According to Fed fund futures, the probability of a September rate cut now exceeds 60%.

Meanwhile, EU-US trade negotiations are in focus ahead of President Trump’s August 1 deadline. Tensions within Europe are mounting, with French and German leaders warning about the economic consequences of a rushed deal, raising additional concerns for the Euro.

In the Eurozone, attention will also be on the preliminary Q2 GDP figures from Germany and the broader region. A stronger-than-expected result could provide temporary support for the shared currency and limit EUR/USD downside in the short term.

As the day unfolds, the EUR/USD pair is likely to remain range-bound until clarity emerges from the Fed’s policy statement and Powell’s press conference. Traders should also keep an eye on any trade-related headlines, which could further sway market sentiment.

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