Investing.com -- EUR/USD posted moderate gains in a cautious session, as investors continued to await the Federal Reserve's latest monetary policy decision in intraday trading on Wednesday afternoon.
The currency pair traded between 1.1256 and 1.1339, before settling at 1.1298, up 0.0032 or 0.28% on the session. Following a brief four-day losing streak last week, the euro has closed higher against the dollar in each of the last two trading days. Despite the slight gains, the euro has still closed below 1.13 against the dollar in the last six sessions. Nevertheless, the euro is still up against its American counterpart by 1% over the last month, amid dovish indications from the Fed of a delayed interest rate hike.
EUR/USD likely gained support at 1.0538, the low from December 3 and was met with resistance at 1.1496, the high from Oct. 15.
Investors continue to await Wednesday's interest rate decision by the Federal Open Market Committee (FOMC), its third monetary policy statement release since their historic rate hike in December. The Fed has responded by holding its benchmark Federal Funds Rate at its current level between 0.25 and 0.50% in each of its first two meetings this year. Last month, the FOMC voted 9-1 to leave the Fed Funds Rate unchanged, with Kansas City Fed president Esther George serving as the lone dissenter.
On Tuesday, investors largely shrugged off a survey from CNBC, which showed that 48 top economists, strategists and fund managers expect the Fed to delay the timing of its next rate hike from June to August. In March, the FOMC downgraded its expectation for 2016 rate hikes from four to two, amid continual headwinds from global financial markets. Any rate hikes by the Fed this year are viewed as bullish for the dollar, as investors pile into the greenback in an effort to capitalize on higher yields.
The Fed's decision will be followed by a closely-watched meeting from the Bank of Japan on Thursday. USD/JPY lost 0.20% on Tuesday to settle at 111.20. At the meeting, the BOJ could introduced further easing measures to stave off threats of deflation.
Elsewhere, the latest projections from the Atlanta Fed's GDPNow forecast model showed that the U.S. economy is growing at a rate of 0.4% over the first quarter. The projections were recalibrated following the release of home data and durable goods order. The upward revision represents a 0.1% gain from the Atlanta Fed's previous estimate on April 19. In March, new durable goods order in the U.S. increased by 0.8% on a monthly basis, sharply below consensus estimates of a 1.6% gain. A considerable increase in defense goods helped offset losses among commercial aircrafts, which continued to weigh. The modest gains in durable goods orders last month came one month after new orders tumbled by a downwardly revised 3.1% decline in February.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, lost more than 0.40% to an intraday low of 94.17, before settling at 94.45 . The index remains near eight-month lows.
Yields on the U.S. 10-Year gained one basis point to 1.93%, while yields on the Germany 10-Year surged four basis points to 0.30%.