EUR/USD: A monetary meeting tonight at 20:30 (EU time)

The euro was consolidating against the dollar as the Fed's final monetary policy meeting concluded at 8:00 PM (Paris time). While a 25-basis-point cut in the dollar's value is virtually a foregone conclusion, the real issue lies elsewhere: refining the projected path of federal interest rates for the first half of 2026, before the appointment of the new Fed chairman is announced. The Fed has little data to work with, due to a lack of economic information and delays caused by the government shutdown.

Particularly in the highly sensitive employment sector, the signals are mixed. Weekly jobless claims, nearing 199,000, are sending positive signals, while the latest ADP survey offers far less optimism. Note that the NFP (the benchmark published by the Department of Labor) will not be released for the November health check until after the FOMC. Yesterday, the JOLTS (Job Openings and Labor Turnover Survey) showed a slight increase in job openings in October, to 7.68 million after 7.65 million in September. The report also highlights a decrease of 217,000 hires, bringing the total to 5.150 million in October.

"It seems a done deal that key interest rates will be cut by 25 basis points (bps). The real debate is whether the Fed will send a cautious message or be more aggressive on its easing path. We remain cautious. The decision will be made with limited data (no recent official employment or inflation figures), but more importantly, we believe inflation is likely to remain high while employment should stabilize in the face of a resilient economy. What is certain is that long-term interest rates have been rising in recent weeks, almost everywhere," explains Xavier Chapard (LBPAM).

This evening, following the FOMC meeting, the details of the announcement will be closely scrutinized, as will the "dot plots," the anonymous projections of voting members' interest rate targets for upcoming deadlines.

"We anticipate approximately three dissenting votes. The Summary Economic Projections (SEP) should indicate stronger growth, but the unemployment rate could be revised upward for both years," explains Bank of America. The "dot plots," which are projections from Fed members (and not forecasts), will be released. The bank estimates that these projections will indicate two additional rate cuts in 2026.

The monetary policy decision itself, along with the dot plots, will be announced at 20:00 (EU time), followed by the press conference at 20:30.

For its part, "the ECB is subtly hardening its stance. While members of the Governing Council reiterate that there is 'no urgency to ease,' Isabel Schnabel went a step further, stating she was 'comfortable' with market expectations that factor in an upcoming rate hike. We still find this position surprising given that European growth is expected to remain modest," analyses Thomas Giudici, Head of Fixed Income at Auris Gestion.

Right now, the EUR/USD is trading at $1.1638.

KEY TECHNICAL ELEMENTS
The downward trendline (in black), which has been exerting pressure since 18 September, has been broken, at a level that also coincides with the positioning of the 50-day moving average (in orange). Confirmation is needed before declaring a polarity reversal, but the signal is sufficient to stop our short positions on the pair.

MEDIUM-TERM FORECAST
Based on the key technical factors we have mentioned, our medium-term outlook for the EUR/USD is neutral.

We will maintain this neutral outlook as long as the EUR/USD exchange rate remains between the support level at $1.1460 and the resistance level at $1.1760.