European markets set for positive open amid Fed rate cut optimism

European currency pairs are expected to see increased buying pressure as regional stock markets prepare for a positive opening Wednesday. The optimism follows Wall Street's strong rally Tuesday, driven by growing expectations of Federal Reserve rate cuts in coming months. EURUSD has gained 0.2% in early Asian trading to 1.0875, while GBPUSD advanced to 1.3145. The dollar index weakened 0.3% overnight as traders priced in a more dovish Fed stance. European economic calendars remain light, keeping focus on US monetary policy developments. German DAX futures point 0.5% higher, suggesting risk-on sentiment that typically supports higher-yielding currencies. Technical analysis shows EURUSD facing resistance at 1.0900, with support at 1.0850. Market participants await Thursday's ECB meeting minutes for additional direction. The positive risk sentiment could extend euro and pound gains if US data continues supporting the rate cut narrative.