EUR/USD trading strategy ahead of tomorrow's Fed rate decision

EUR/USD consolidates around 1.0780 as traders await tomorrow's Federal Reserve interest rate decision, with the pair trapped in a tight 40-pip range. Current positioning suggests cautious sentiment, with options markets pricing increased volatility for the announcement. Technical analysis shows immediate resistance at 1.0810 (50-day MA) and support at 1.0750 (recent swing low). The Fed is widely expected to maintain rates, but forward guidance and economic projections will be crucial for determining the dollar's direction. A hawkish hold could propel USD strength, potentially pushing EUR/USD toward 1.0700. Conversely, any dovish signals might trigger a relief rally toward 1.0850. Traders are advised to monitor volume patterns and use tight stop-losses given the event risk. Pre-positioning remains light, suggesting potential for outsized moves once the Fed's stance becomes clear.