• EUR/USD clings to Monday’s gains near 1.1500 as the US Dollar comes under pressure.
• Both the Fed and the ECB are expected to leave interest rates unchanged this week.
• Higher oil prices have prompted inflation expectations.

The EUR/USD pair holds onto Monday’s gains slightly above 1.1500 during the European trading session on Tuesday. The major currency pair trades firmly as the US Dollar (USD) has come under pressure ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally lower to near 99.70.

Investors expect the Fed to leave interest rates unchanged in the current range of 3.50%-3.75% as the Middle East conflict-driven spike in the oil price has prompted inflation expectations in the entire world.

In the policy meeting, investors will pay close attention to cues regarding how long the Fed could hold interest rates steady at their current levels.

Meanwhile, the Euro (EUR) demonstrates a mixed performance in the countdown to the European Central Bank’s (ECB) interest rate decision on Thursday. The ECB is anticipated to leave interest rates steady. Latest comments from a slew of ECB officials showed that they are not encouraged to any monetary policy adjustment, as inflationary pressures have remained broadly close to the 2% target.

EUR/USD technical analysis

EUR/USD holds onto gains near 1.1510 at the press time. The pair extends a medium-term decline beneath the 20-day Exponential Moving Average (EMA) around 1.16, keeping the near-term bias bearish while price holds below this dynamic cap.

RSI hovers in the mid-30s after recovering from oversold territory, showing weak momentum and only a modest loss of downside pressure rather than a firm bullish shift.

Immediate resistance emerges at the three-day high of 1.1530, followed by the 1.1630 area where the 20-day EMA converges as a stronger barrier. A daily close above 1.1630 would be needed to ease downside pressure and open a recovery toward 1.1690. On the downside, initial support aligns with the recent 1.1415 low, with a break exposing 1.1360 and then 1.1300 as the next bearish targets.

(The technical analysis of this story was written with the help of an AI tool.)