The EUR/USD is holding steady near 1.1640 as traders await the Federal Reserve’s policy decision. Current US job data shows a small increase in private-sector jobs, averaging 4,750 per week, and a slight rise in job openings to 7.67 million. The US Dollar is close to six-week lows, with strong market predictions pointing to a 25-basis-point rate cut. This expectation persists despite concerns about the job market and mixed recent data. Everyone is waiting for Jerome Powell’s upcoming comments, which may provide hints about the direction of easing. In the Eurozone, while sentiment has improved, it hasn’t done much for the Euro. The currency heat map indicates percentage changes, showing the Euro is doing better than the Japanese Yen. A table displays how major currencies have shifted against each other today. As a result, EUR/USD is in a holding pattern as traders look for clearer guidance from the Federal Reserve. This guidance will likely influence the next movement of EUR/USD. The market is almost fully pricing in a 25-basis-point rate cut for this week’s Federal Reserve meeting. This expectation has kept the US Dollar weak, near lows not seen since late October 2025. Consequently, EUR/USD is stable at around 1.1640 as traders wait for the official announcement. The key factor isn’t just the rate cut itself but the potential for market swings following Jerome Powell’s comments. We should be ready for him to take a firm stance to manage expectations for a quick easing into 2026. This situation is perfect for options strategies like straddles or strangles on EUR/USD, allowing for profit from significant price movements in either direction. Recent data allows the Fed to ease, as the latest Consumer Price Index (CPI) report for November 2025 shows inflation has cooled to 2.9%, continuing its slow decline. This is a far cry from the aggressive rate hikes of 2023, when inflation was a major concern. However, any unexpectedly hawkish comments could lead traders to quickly close short positions on the dollar. While the recent JOLTS report indicated 7.67 million job openings, the overall trend in the US labor market is one of moderation. Nonfarm payroll growth has averaged only 145,000 over the past quarter, a sharp drop from earlier in the year. This trend supports buying dips in EUR/USD or considering call options, but it’s wise to be cautious ahead of the Fed’s updated economic projections. For the Euro, recent comments from European Central Bank officials suggest a cautious, wait-and-see approach, providing little independent direction. This relative quiet from the ECB means the Fed’s policy decisions will mainly drive the EUR/USD pair into early 2026. Therefore, our derivative positions should focus on events stemming from the US economic calendar.

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