Markets price a 35% chance of a Fed rate hike, with the pair vulnerable to further declines if the USD strengthens.
The EUR/USD pair remains below 1.1400, trading near 1.1390 after failing to sustain gains above the level. Weak momentum and a bearish trend leave it exposed to a drop below the year-to-date low of 1.1324 if the Federal Reserve adopts a hawkish stance.
Investors expect the Fed to hold rates steady but assign a 35% probability to a quarter-point hike later today. A surprise tightening could fuel a USD rally, while a hawkish pause may still support the greenback by reinforcing expectations for a September increase. The Euro showed no reaction to ECB comments on inflation risks tied to oil prices.
Technical indicators suggest a neutral-to-slightly bearish bias, with the RSI below 50 and the MACD barely positive, signaling limited bullish momentum.