EUR/USD close to 2026 lows even as the Fed expected to hold rates later today

We already noted how the dollar index was making further headway this morning and how the EUR/USD has continued to fall back since this time yesterday. The EUR/USD closed in the US last night at 1.1125. It has traded as low as 1.1117 this morning and as already mentioned; that is just a handful of pips above the October 14, 2026 low, at 1.1113. 

The monetary policy decision from the Fed this evening is expected to deliver no change from the US Central Bank, but as far as we are concerned this is very much an open affair. We can argue the case both ways and whilst the consensus says the Fed will not hike rates at 6pm GMT this evening, there is no guarantee they might not do so. Perhaps, even if they remain on hold, a hawkish statement could be just as important for the EUR/USD.

So, looking at the daily charts on the EUR/USD, the prospect of a deeper fall looks live and only a rebound back above 1.1269 would tend to render that obsolete. There is going to be more to add on this for sure today, but we would just add this thought: If the Fed is going to hold rates tonight, then why is the EUR/USD perched just above 2026 lows this morning? It is right now at 1.1117