EUR/USD trapped in range as Fed rate cut expectations shift

EUR/USD remains confined within a tight 1.0820-1.0870 range during Monday's European session, struggling to find direction amid shifting Federal Reserve rate cut expectations. Major investment banks including Credit Agricole and Morgan Stanley now project only two Fed rate cuts by year-end, down from previous estimates of three or four cuts. The pair faces additional pressure from French political uncertainty, with the CAC 40 index declining 1.2% and consumer confidence dropping to 87 from 89 expected. Barclays notes weak dollar selling signals heading into month-end, suggesting potential downside pressure. Technical indicators show the pair testing resistance at 1.0870, with support established at 1.0820. Traders await fresh catalysts from upcoming US economic data releases to break the current consolidation phase.