EUR/USD grinds sideways as markets pivot to face Fed rate call

• EUR/USD stuck to familiar territory near 1.1300 on Monday.
• A key Fed rate call looms ahead during the midweek market sessions.
• European data takes a back seat this week as investors focus on rate cut hopes.

EUR/USD churned chart paper near the familiar 1.1300 handle to kick off a fresh trading week. The Fiber has been stuck in a choppy consolidation phase as Euro traders struggle to kick off a new push in either direction.

European data remains limited this week: final Purchasing Managers Index (PMI) data due this week is unlikely to produce any surprises, and pan-European Retail Sales figures due early Wednesday are already expected to disappoint markets, poisoning the water supply and leaving Fiber traders to focus on this week's key Federal Reserve (Fed) rate call.

The Fed is widely anticipated to maintain interest rates steady for now, a decision likely to provoke further criticism from the Trump administration, which is fiercely trying to coax early rate cuts from Fed Chair Jerome Powell. Labor and inflation data appear mostly balanced, but the erratic and unclear trade policies from the White House undermine its own chances for rate cuts, as the Fed remains dedicated to its goal of controlling unemployment and price fluctuations.

Even though the Fed's rate hold seems almost certain this week, Fed Chair Powell's remarks will carry added significance for investors after the Fed's announcement on Wednesday. Market participants are still looking for indications of a shift towards a new rate-cutting cycle, and traders will be on the lookout for any hints of dovishness from Fed officials.

EUR/USD price forecast

EUR/USD has been caught in a rough near-term volatility trap between 1.1500 and 1.1200. Euro bulls look set to have fully run out of gas, but a broad-market Greenback selloff has left EUR/USD bids in the lurch.

Fiber has pumped the brakes on the high side of a multi-year sideways grind, but the next leg in either direction faces stiff fundamental resistance. The Euro is trading comfortably on the high side of the 200-day Exponential Moving Average (EMA) near 1.0800, but recent highs north of 1.1500 appear equally out of reach for now.

EUR/USD daily chart