No major events are expected today.

The EUR/USD pair started the week on a positive note, rising to 1.1090 during the Asian session on Monday. Investors are now focused on the upcoming decision by the U.S. Federal Reserve (Fed), which is expected later this week. Markets remain divided on whether the Fed will cut rates by 25 basis points (bps) or 50 bps.

According to data from the CME FedWatch Tool, the probability of the Fed reducing the rate by 25 bps at the September meeting stands at 48.0%. The probability of a 50 bps cut has risen to 52.0%, up from 50.0% the day before.

Investors will be closely watching the FOMC press conference to gauge the future of U.S. interest rates. If Fed Chair Jerome Powell signals a more aggressive easing approach, it could put downward pressure on the U.S. dollar, providing potential momentum for the EUR/USD pair.

Gabriel Makhlouf, member of the European Central Bank (ECB) Governing Council and Governor of the Central Bank of Ireland, stated on Friday that the central bank is still operating in a “highly uncertain environment” and will rely on data for future monetary policy decisions. Makhlouf emphasized that the ECB is not committed to any specific rate, but remains “determined to ensure” that inflation in the Eurozone returns to the target level of 2% “in a timely manner.”

Research from Rabobank notes that the ECB announced a second rate cut in this cycle last week, and another cut is expected before the end of the year. The ECB staff’s latest forecasts also reflect downward revisions in Eurozone growth rates. While expectations of Fed easing may weaken the U.S. dollar, Rabobank believes that unfavorable Eurozone fundamentals are likely to limit the EUR/USD pair’s growth potential in the near future.

Recommendations: Monitor the 1.1100 level; if it holds above, consider buying positions, and if it bounces back, consider selling positions.