All Eyes on Fed Tone as EUR/USD and EUR/JPY Approach Key Levels

Markets fully expect the Fed to hold rates, so the focus is entirely on the tone of Powell’s statement. Rising oil prices and inflation risks support a hawkish outlook, but Powell may avoid strong signals and leave major decisions to his successor. This creates a binary outcome for the US dollar. A hawkish tone could strengthen the USD, while a neutral hold could weaken it and support EUR/USD.

Technically, EUR/USD is holding strong support around 1.1675 and the 200-day EMA, with bullish signals suggesting demand is building. A neutral Fed could push prices toward 1.1750, while a stronger dollar could break 1.1675 support, opening downside toward 1.1630.

EUR/USD Daily Chart

For EUR/JPY, the broader trend remains bullish, but recent price action has been sideways near long-term highs. The pair is forming a possible descending triangle pattern, with 186 acting as key support. Holding above this level keeps the upside bias intact toward previous highs, while a break below could lead to a deeper pullback toward 185.20 area.

EUR/JPY Daily Chart

Bottom line: The Fed decision is a key trigger, with USD direction driving both EUR/USD and EUR/JPY, while critical support levels will decide whether trends continue or reverse.