Major FX Pairs Steady Ahead of Key FOMC Rate Decision
FX markets enter the week on a cautious note as traders position themselves ahead of Wednesday’s highly anticipated FOMC meeting, where the Federal Reserve is widely expected to deliver a 0.25% rate cut. With US inflation cooling and Fed officials signaling a dovish shift, the US Dollar has come under pressure, allowing major pairs such as EURUSD and GBPUSD to close last week on a stronger footing. This week’s decisions and forward guidance from the Fed are expected to set the tone for USD direction across the board.
EURUSD Gains as Markets Anticipate Fed Rate Cut
EURUSD closed last week’s trading session higher after a stronger-than-expected European CPI report. The 2.2% reading increases pressure on the ECB to keep interest rates at their current levels for longer. Meanwhile, the US Dollar weakened following comments from the Fed officials signaling a rate cut at next week’s meeting. US PCE came in lower than expected, reinforcing expectations for a rate cut.
As for this week, traders and investors will mainly focus on Wednesday’s FOMC meeting. The Fed is expected to cut interest rates by 0.25%. Even though this move is largely priced in, the press conference and updated rate projections that follow are likely to drive the US Dollar’s next directional move.
EURUSD Technical Outlook and Key Economic Events This Week
On the Economic calendar, Wednesday features the FOMC decision and press conference. On Friday, the German Harmonised index of Consumer Prices is expected to remain unchanged at 2.6%.
Technically, the pair maintains a positive outlook after last week’s close above the 38.2% level at 1.1642. Traders with long positions are targeting profits above 1.1700, while short positions are aiming for 1.1500.
Position sentiment: BUY 50% – SELL 50%.
GBPUSD chart, December 06, 2025. Source: TenTrade.com
GBPUSD Strengthens Ahead of Fed Rate Decision
GBPUSD closed higher last week, supported by a weaker-than-expected US PCE reading and comments from Fed officials pointing toward an interest rate cut. Traders and investors have already positioned themselves ahead of this week’s expected Fed decision, and the broad selloff in the US Dollar helped the pair finish the week on a stronger note.
As for this week, traders and investors will mainly focus on Wednesday’s FOMC meeting. The Fed is expected to cut interest rates by 0.25%. Although the move is largely priced in, the press conference and updated rate projections that follow will likely determine the US Dollar’s next direction.
GBPUSD Technical Outlook and Key Economic Events This Week
On the economic calendar, Wednesday features the FOMC decision and press conference. On Friday, the UK Manufacturing Production is expected to remain unchanged at 1.7%.
Technically, the pair holds a neutral outlook after last week’s close just below the 38.2% level at 13328. Long positions remain open between 1.3369 and 1.3100, targeting profits above 1.3500, while short positions are aiming for 1.3100
Position sentiment: BUY 60% – SELL 40%.
GBPUSD chart, December 06, 2025. Source: TenTrade.com
Key Takeaways
EURUSD gained last week on stronger-than-expected European CPI and a weaker US Dollar amid Fed rate cut signals.
GBPUSD also closed higher, supported by weaker US PCE data and positioning ahead of the Fed’s expected rate cut.
FOMC meeting on Wednesday is the main market focus, with the Fed expected to cut rates by 0.25%, while the press conference and updated projections could drive further USD moves.
Economic data to watch later this week includes Friday’s German HICP at 2.6% and UK Manufacturing Production at 1.7%, both expected to remain unchanged.
Technical outlooks: EURUSD shows a positive bias above 1.1642 with targets at 1.1700 (long) and 1.1500 (short); GBPUSD remains neutral around 1.3328 with long targets above 1.3500 and short targets at 1.3100.
For more detailed economic calendar events please visit our live economic calendar on:
https://tentrade.com/economic-calendar/
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