EURUSD is poised to test upper boundary of descending triangle before Fed announces its rate decision

EURUSD has just rebounded toward the upper limit of the descending triangle. However, bears remain in control ahead of the Federal Reserve’s (Fed) interest rate decision.

This classic pattern, which we see on the daily chart, has been forming since May 12, 2026. The triangle’s top looks like a declining resistance line connecting a series of lower highs. The bottom is a horizontal support range between 1.13200 and 1.13238, which the market has unsuccessfully tested multiple times in late June and July. Right now, the pair is trading near the apex, signaling that the consolidation phase is coming to an end and a breakout is imminent. The only question is where EURUSD will head. Its direction remains unclear.

Technicals support this view. The Chaikin Oscillator is still sitting in negative territory, suggesting sellers’ dominance. But everything is about to change, as bearish momentum is fading and bulls are ready to step in. On July 28, the oscillator turned higher, rebounding from the local floor. The Stochastic Indicator is singing the same tune. The %K and %D lines have recently exited oversold territory and are now moving upward through the neutral zone. As a result, the odds of a rebound appear to be increasing.

The fundamental landscape, however, is a mixed bag. The US dollar keeps holding tight to monthly peaks, underpinned by revived geopolitical tensions and uncertainty over the Fed’s upcoming guidance. That said, most of these factors have already been priced in by the market. What does this mean? In case the US regulator chooses to be less hawkish, the greenback’s further rally is likely to be capped. At the same time, positive signals from the eurozone—such as the Ifo index’s rise and the PMI’s return above 50—have yet to fully impact the single currency’s dynamics and support the euro.

Pay attention to the trading plan down below:

Buy EURUSD from current levels near 1.13930 in anticipation of breaking through the upper boundary of the descending triangle. Place Take profit 1 at 1.14300, Take profit 2 at 1.15280, and Stop loss at 1.13100.

This forecast remains relevant between July 29 and August 5, 2026.