The EUR/USD pair edged higher during Tuesday's session as the US Dollar softened ahead of the Federal Reserve's latest monetary policy announcement. With investors widely expecting interest rates to remain unchanged, attention has shifted to the Fed's forward guidance, particularly any signals regarding inflation, economic growth, and the timing of future policy moves.

Despite the short-term recovery, the broader technical picture remains cautious. The pair has struggled to regain momentum after failing to sustain gains above the 1.1480 resistance area, where the 200-period Simple Moving Average continues to act as a significant barrier. Momentum indicators also suggest buyers remain hesitant, with the Relative Strength Index (RSI) staying below the neutral 50 level while the MACD remains in negative territory, indicating bearish momentum has not yet faded.

From a technical perspective, the 1.1400 level remains an important support zone. A decisive break below this area could expose the June low near 1.1325 and reinforce the prevailing downward trend. On the upside, a sustained move above 1.1480 would improve the short-term outlook and could encourage further buying interest.

The US Dollar has also been influenced by changing interest rate expectations. Markets continue to price in the possibility of further Federal Reserve tightening later this year, with investors closely monitoring incoming inflation and labor market data for confirmation. Any hawkish signals from Fed Chair Jerome Powell could provide renewed support for the greenback.

Geopolitical developments remain another key driver of market sentiment. Ongoing tensions in the Middle East have increased demand for traditional safe-haven assets and contributed to volatility across currency and commodity markets. Meanwhile, renewed concerns over US trade policy and the potential introduction of additional tariffs have added another layer of uncertainty for global investors.

On the European side, the European Central Bank continues to maintain a cautious stance after leaving interest rates unchanged at its latest meeting. Policymakers acknowledged that inflation is moving toward the 2% target but emphasized that risks remain elevated due to geopolitical uncertainty and lingering energy price pressures. The ECB has indicated that future policy decisions will remain data dependent.

Overall, EUR/USD is likely to remain sensitive to both Federal Reserve guidance and broader macroeconomic developments. While the pair has found temporary support as the US Dollar weakens, the technical outlook continues to favor caution unless buyers can successfully reclaim resistance above 1.1480.

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