EUR/USD Price Forecast: Remains confined in a range around 1.1300 ahead of FOMC meeting

• EUR/USD struggles for a firm near-term direction as traders await the crucial FOMC meeting.

• The recent breakdown below the 100-period SMA on the 4-hour chart favors bearish traders.

• The mixed technical setup, however, warrants caution before positioning for deeper losses.

The EUR/USD pair reverses an Asian session tip to the 1.1280-1.1275 region on Tuesday and climbs a fresh daily high in the last hour, though it lacks strong follow-through buying. Spot prices remain confined in a multi-day-old trading range, close to the three-week low touched last Thursday, as traders opt to wait on the sidelines ahead of the crucial FOMC decision on Wednesday.

Heading into the key central bank event risk, Friday's upbeat US jobs data and the US ISM Services PMI released on Monday eased market concerns about a recession. This, in turn, helps limit the downside for the US Dollar (USD) and acts as a headwind for the EUR/USD pair. However, the heightened economic uncertainty led by US President Donald Trump's rapidly shifting stance on trade policies keeps the USD bulls on the defensive.

From a technical perspective, last week's breakdown below the 100-period Simple Moving Average (SMA) on the 4-hour chart – for the first time since early April – was seen as a key trigger for bearish traders. However, oscillators on the said chart are yet to confirm a negative bias and are holding in bullish territory on the daily chart. This makes it prudent to wait for strong follow-through selling before positioning for any meaningful depreciating move.

In the meantime, the 100-period SMA on the 4-hour chart, currently pegged around the 1.1380 region, could act as an immediate hurdle ahead of the 1.1400 round figure.  A sustained strength beyond the latter should allow the EUR/USD pair to surpass the 1.1425-1.1430 intermediate barrier and aim toward reclaiming the 1.1500 psychological mark. The momentum could extend further towards the multi-year peak, around the 1.1575 region touched in April.

On the flip side, the 1.1265 region, or a three-week low touched last Thursday, might offer immediate support and should act as a key pivotal point. A convincing break below should pave the way for an extension of the EUR/USD pair's corrective slide from the 1.1575 area, or the highest level since November 2021 touched last week. Spot prices might then weaken to the 1.1200 round figure before dropping to the 1.1140 area, or the 200-period SMA on the 4-hour chart.

EUR/USD 4-hour chart