USD Focus: Fed Meeting Headlines Busy Central Bank Week

The Federal Reserve takes center stage this week with its highly anticipated policy meeting, likely to impact all major USD pairs including EUR/USD, GBP/USD, and USD/JPY. Markets are pricing in a 65% probability of a 25 basis point rate cut, with the remaining 35% expecting rates to hold steady at 5.25-5.50%. The decision comes amid mixed economic signals, with inflation showing signs of moderating while labor markets remain resilient. Other major central banks including the Bank of England and Bank of Japan will also announce policy decisions, though market impact is expected to be more subdued. Technical levels show EUR/USD testing resistance at 1.1100, while USD/JPY finds support near 147.50. The Fed's forward guidance and dot plot projections will be crucial for determining near-term dollar direction, with any hawkish surprise likely to strengthen the greenback across the board.