At the same time, the pair’s return to the 1.1250 resistance level will be important for the bulls to regain control.

• In the middle of a downward correction, the price EUR/USD will receive monetary policy decisions from the European Central Bank and the US Federal Reserve this week.
• Last week’s downside correction losses reached the 1.1108 support level before settling around the 1.1130 level at the time of writing.
• Expectations suggest that each of the two banks will raise interest rates by a quarter of a point this week, but the content of each bank’s statement will be closely monitored to identify the future of future rate hikes or to stop the expected large-scale economic recession if the banks continue their tightening path for a long time.

The U.S. central bank is widely expected to raise the federal funds rate next Wednesday to the highest level since 2001. Investors hope it will be the last hike in a tightening cycle as inflation has started to fall since last summer. And the federal funds rate in 2022 started at near zero.

Markets are also watching this week for the outcome of a major policy meeting in China, which could lead to more measures to support slowing growth in the world’s second-largest economy. The Personal Consumer Expenditure Price Index, a gauge of US inflation closely watched by the Federal Reserve, had been falling for the past few months by the end of the week. The Fed has been raising interest rates for more than a year to tame inflation. Wall Street markets are betting the U.S. central bank will raise interest rates again this year, then stop.

According to the performance on the daily chart below, the EUR/USD price is witnessing a breakout phase of the general downtrend and the move will be strengthened if the currency pair breaks below the psychological level at 1.1000, which is the boundary between the two directions.

Over the same time period, the return of the currency pair towards resistance level 1.1250 will be important for the bulls to regain control. Today, the EUR/USD price will interact with the announcement of purchasing managers’ indicators data for the manufacturing and services sector in the Eurozone and United States economies and with what is expected regarding central bank policy.

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