EUR/USD Recovers as Traders Await Fed and ECB Rate Decisions

EUR/USD is showing signs of recovery as the pair bounces from recent lows ahead of key central bank announcements this week, including decisions from the Federal Reserve and European Central Bank. The pair had been under pressure from broad dollar strength fueled by safe-haven demand amid geopolitical tensions, but technical buying near support levels has triggered a short-term rebound. From a technical perspective, the pair appears to be forming a base near recent support, with traders watching for confirmation of a reversal pattern. Immediate resistance lies at the prior consolidation zone, while a failure to hold current levels could expose the pair to further downside. The divergence in monetary policy expectations between the Fed and ECB remains a central theme, with markets pricing in a more hawkish Fed stance relative to the ECB amid differing inflation dynamics. Traders should position cautiously ahead of rate decisions, as any surprises in forward guidance could trigger sharp directional moves in EUR/USD.