The pair shows no directional bias at the start of an eventful week as investors refrain from taking significant positions ahead of the United States data (Tuesday) and the Federal Reserve monetary policy (Wednesday).
At the time of writing, the EUR/USD pair is trading at the 1.0750 zone, virtually unchanged on the day, having pulled back from an intraday peak of 1.0790.
The Federal Open Market Committee (FOMC) kicks off its two-day policy meeting on Tuesday and will announce its verdict on Wednesday. This meeting has been highly anticipated as the Fed is expected to pause its tightening cycle after ten consecutive rate increases. According to the CME FedWatch Tool, the probability of the Fed staying on hold is above 75%. However, for the July 26 meeting, there is an over 50% chance the central bank will deliver another 25-basis-point rate increase.
Before the Fed announces its decision, the US will release May Consumer Price Index (CPI) figures, which are expected to show the annual inflation rate to ease to 4.2% while the core rate is increasing to 5.6%.
From a technical perspective, the EUR/USD pair holds a neutral to slightly bearish short-term bias according to indicators on the daily chart. At the same time, the price remains capped below the 100-day simple moving average (SMA), offering resistance at 1.0805 and currently struggling around the 20-day SMA.
Failure to consolidate above the 1.0750 area would add bearish pressure exposing the 1.0670 zone ahead of the May monthly low of 1.0635.