Buying EURUSD in anticipation of Fed and ECB policy moves

This week, the EURUSD pair will be pulled in opposite directions as two heavyweight policymakers take center stage: the American Federal Reserve (Fed) and the European Central Bank (ECB). Their back-to-back meetings could set the tone for the next phase of the rally.

First up is the US regulator. No fireworks are expected at its April 29 meeting—the market is convinced the key rate will stay at 3.75%. But don't let the surface calm fool you. The March Fed minutes, released in early April, showed that inflation risks tied to Middle East instability are starting to worry officials. Still, the consensus view leaves the door open for cautious easing later in 2026, provided that the Consumer Price Index (CPI) behaves and drifts toward 2%.

Across the Atlantic, the ECB story is different—but just as important. Analysts and macroeconomists see no move on April 30, with the key rate standing at 2%. Financial markets have already started factoring in two 25-basis-point hikes this year, driven by rising oil prices. Even the International Monetary Fund (IMF) is turning up the heat for the central bank, recommending that it tighten by about 0.5% over the next few months.

So, what does that mean for EURUSD? The interest rate differential could narrow in favor of the euro—a potential tailwind for the pair. In the medium term, this could set the stage for a possible run toward 1.18000. Central banks hold the pen, and the market is waiting for the script.

The ultimate recommendation is to buy EURUSD at the current price, targeting 1.18000 within one month. To manage downside risk, place a Stop Loss order just below support, at 1.17000.