The US JOLTS Job Openings report is expected to shed light on the labor market before the Federal Reserve’s meeting. The EUR/USD exchange rate has fallen to 1.1635 after failing to rise above 1.1650. Traders are cautious as they await the Fed’s monetary policy decision, with futures markets indicating a nearly 90% chance of a 25-basis-point rate cut. Attention will be on the tone of the policy statement, interest rate outlook, and Chairman Jerome Powell’s press conference. Before the Fed’s announcement, we will see the US ADP Employment Change report and JOLTS Job Openings, giving us insight into the US labor market. Meanwhile, the Euro recently strengthened against the Japanese Yen. The US Dollar continues to benefit from Monday’s gains due to higher US Treasury yields and risk aversion following a recent earthquake in Japan. Former President Donald Trump has criticized Chairman Powell for not reducing borrowing costs more quickly. Today’s main focus is on JOLTS Job Openings, which are expected to stay steady at 7.2 million. In the Eurozone, Bundesbank President Joachim Nagel is likely to stick with current monetary policy. Technical analysis suggests that the EUR/USD could face downward pressure if it cannot break above 1.1650. As the Federal Reserve’s decision approaches, the market has almost fully priced in a 25 basis point rate cut. This high probability—around 90%—means the cut is not expected to cause a major impact. The spotlight will be on Chairman Powell’s guidance and future interest rate predictions. The anticipated rate cut is supported by a consistently cooling labor market. JOLTS data, expected at 7.2 million, shows a long-term decline from the 12 million peak in 2022. This ongoing drop in job openings allows the Fed to ease its policies as hiring slows down. Recent labor statistics support this slowing economy trend. For instance, the November 2025 ADP employment report showed private payrolls grew by just 103,000, missing expectations and indicating a hiring slowdown. We’ll be closely monitoring the next ADP release for confirmation of this trend ahead of the Fed meeting. Despite the near certainty of a rate cut—which usually negatively impacts a currency—the US Dollar remains strong. This strength is driven by short-term risk aversion and rising US Treasury yields. This is why EUR/USD has struggled to break above the 1.1650 resistance level and is currently lower. Our focus should be on the differences in policy between the US and Europe. While a Fed cut is expected, European officials, like Joachim Nagel, show an intention to keep rates steady for now. This contrast will greatly impact the EUR/USD pair once the Fed makes its announcement. For traders, this situation suggests preparing for volatility around the Fed’s statement. A key level to watch for EUR/USD is 1.1650; a dovish comment from Powell could push prices above this level, aiming for the 1.1680 highs. On the other hand, if there’s any indication that this cut is a one-time event, we may see the pair drop toward recent lows, as the dollar would strengthen with a less-dovish outlook.

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