Central-bank week: EUR/USD at 1.1530 as Fed, BoE and BoJ loom

EUR/USD fell to 1.1570 on September 14, down from above 1.1620 in early September and now testing levels not seen since August. The chart shows hourly candles through September 14, with price trading at roughly 1.1530—just above a horizontal support line drawn near that level. The pair has been grinding lower for the past two weeks, carving out a series of lower highs marked by small red and orange dots on the chart.

Energy prices have kept inflation elevated, and futures contracts imply an 87.3% probability that the Federal Open Market Committee will raise the federal funds rate from the current 3.50–3.75% range to 3.75–4.00% at the September 16 meeting. That shift has fuelled a dollar rally at the expense of the euro. The single currency is down 1.64% over the past twelve months, and momentum remains weak.

What the calendar says

All three of the major central-bank meetings land this week, starting with the Fed interest rate decision Wednesday, September 16 at 2:00 PM ET (18:00 UTC), with the Summary of Economic Projections. Futures traders are pricing in two quarter-point rate increases by year's end, and the updated dot plot will reveal whether the Committee shares that view. The decision moves EUR/USD, GBP/USD, USD/JPY, gold, BTC/USD and ETH/USD.

The Bank of England announces its base-rate decision on Thursday 17 September at 12:00 UK time (11:00 UTC). At its July 30 meeting the Monetary Policy Committee voted 6–3 to hold Bank Rate at 3.75%, with Huw Pill, Megan Greene and Catherine Mann voting to increase it to 4%. Market pricing makes a hold at the September meeting the most likely outcome, with roughly a one-in-three chance of a quarter-point rise. The decision will shape GBP/USD and can spill over to the euro.

The Bank of Japan gathers on September 17–18, with the statement typically released around midday Tokyo time. Governor Kazuo Ueda hinted that a rate hike is likely, saying that officials will decide on policy with upside price risks in mind, and the current market-implied probability of a 25-basis-point hike is 62%. Officials will consider an increase in the policy rate from 1%. The decision is the primary driver of USD/JPY. Traders can monitor the full schedule at our economic calendar.

EUR/USD: testing the August low

The hourly chart shows EUR/USD at 1.1530, sitting on the red horizontal support line that has defined the August low. The pair peaked near 1.1630 earlier this month before rolling over; four small markers—coloured red, orange, yellow and blue—trace the decline from 1.1630 through 1.1600, 1.1560 and down to current levels. The 200-hour moving average, visible as a curving line above price, has been a ceiling since early September.

A breach of 1.1530 would open the door to further downside, with the next obvious cluster of support not arriving until the 1.1470–1.1480 zone visible on the left of the chart in late August. On the topside, reclaiming 1.1600 would be the first signal that selling pressure has eased. Our in-house signal engine currently reads Strong Sell, consistent with the downtrend visible on this hourly timeframe.