EUR/USD is trading below 1.0900 at the start of the Asian session on Monday. The rise of the US dollar (USD) above 103.50 is putting pressure on the major pair. Investors are awaiting the US Federal Open Market Committee (FOMC) interest rate decision on Wednesday, with no rate change expected. At the time of publication, EUR/USD is trading at 1.0885, down 0.03% for the day.

The FOMC is expected to keep the key federal funds rate at a 22-year high in the 5.25%-5.50% range on Wednesday, as Fed officials want to see more inflation data to see if it has returned to the 2% target before they start cutting interest rates. Nevertheless, the narrative of high and long-term rates in the U.S. could drive the U.S. Dollar (USD) higher and serve as a headwind for the Euro-Dollar pair.

As for the Euro, the European Central Bank (ECB) kept borrowing costs at record highs at its March meeting, but policymakers have signaled that they are discussing the possibility of a first rate cut. ECB policymaker Pablo Hernandez de Cos said on Sunday that the central bank had left borrowing costs at a record high this month, but said it had made good progress in reducing inflation and had begun preliminary discussions on easing monetary policy. He added that the central bank may start cutting interest rates in June after Eurozone inflation falls.

Recommendations: Trade predominantly with Buy orders from the current price level