EUR/USD Price Forecast: 1.1655 acts as key barrier for Euro bulls

The EUR/USD pair trades 0.18% lower to near 1.1635 during the European trading session on Tuesday. The major currency pair faces selling pressure as the US Dollar (USD) resumes its upside journey amid firm expectations that the Federal Reserve (Fed) will not cut interest rates this year.

According to the CME FedWatch tool, the possibility of the Fed holding interest rates at their current levels by the year-end is 53%, while the rest favors at least one interest rate hike this year. This is a sharp turnaround from two interest rate cuts anticipated before the onset of the war in the Middle East. Traders have priced out the possibility of Fed interest rate cuts this year due to elevated energy prices.

Going forward, major triggers for the shared currency pair will be Federal Open Market Committee (FOMC) minutes of the April policy meeting and the preliminary Eurozone/US private sector Purchasing Managers’ Index (PMI) data for May, which will be released on Wednesday and Thursday, respectively.