The EUR/USD currency pair slipped below the 1.1500 psychological level during the Asian session on Tuesday, failing to build on the previous day's recovery from the 1.1415-1.1410 area, which marked the lowest level since July 2025 [1]. The downside for the pair appears cushioned as traders await key central bank events, with the US Federal Reserve scheduled to announce its policy decision at the end of a two-day meeting on Wednesday, followed by the European Central Bank meeting on Thursday [1].
Market participants are closely watching the policy outlook, as renewed inflationary pressures have emerged due to a sharp rise in Crude Oil prices following the outbreak of war in Iran [1]. This has led to speculation that the Fed may delay cutting interest rates, supporting the US Dollar and attracting dip-buying, which has stalled the overnight pullback from its highest level in May 2025 [1]. Conversely, the Euro is weighed down by concerns that elevated Crude Oil prices could negatively impact Eurozone economic growth, given the region's reliance on imported energy, acting as a headwind for the EUR/USD pair [1].
US President Donald Trump has reiterated his call for nations to help reopen shipping traffic in the Strait of Hormuz, contributing to a modest recovery in global risk sentiment. This is reflected in a positive tone in equity markets, which may limit further appreciation of the safe-haven US Dollar [1]. As a result, analysts suggest caution for bullish traders and recommend waiting for strong follow-through selling before positioning for a resumption of the EUR/USD downtrend [1].
CONCLUSION
EUR/USD remains under pressure below 1.1500 as the US Dollar strengthens on expectations of a delayed Fed rate cut and concerns over Eurozone growth. Upcoming Fed and ECB meetings, along with developments in oil prices and global risk sentiment, are likely to determine the pair's near-term direction. Traders are advised to exercise caution until clearer signals emerge from central bank policy decisions.