EURUSD upside limited by French political crisis and FOMC uncertainty

EURUSD is trading flat at 1.0575, constrained by renewed French political turmoil and pre-FOMC positioning. The pair briefly touched 1.0600 in early European trading before retreating as French government instability concerns resurfaced, with Prime Minister Barnier facing no-confidence votes. Short-term US Treasury yields have risen 3 basis points to 4.25%, providing additional support for the dollar. Technical analysis reveals strong resistance at 1.0620 (50-day MA) and 1.0650 (November high), while support holds at 1.0550 (ascending trendline). The pair remains trapped in a 100-pip range as traders await Wednesday's Federal Reserve decision. Market dynamics suggest limited upside potential unless the Fed delivers an unexpectedly dovish message. French political uncertainty adds another layer of euro weakness, with potential government collapse threatening fiscal stability. Momentum indicators show bearish divergence on the 4-hour chart, suggesting further consolidation or mild downside ahead.