While the euro and British pound show modest gains against the U.S. dollar, investors hoping for Jerome Powell to hint that the Federal Reserve is moving closer to a rate cut may be disappointed.

Today, policymakers are expected to keep interest rates unchanged for the fifth consecutive time. A dissenting vote from one or more officials might be interpreted as a sign that some members of the Federal Open Market Committee favor a different approach, but this is unlikely to significantly impact the overall stance within the Fed.

The decision to leave rates unchanged will be driven by the need to balance economic stimulus with the risk of fueling inflation. On one hand, maintaining high interest rates can help curb consumer spending and investment, slowing GDP growth. On the other hand, overly accommodative monetary policy may lead to rising prices, especially given the ongoing challenges in U.S. trade relations with the rest of the world.

However, with a wave of economic data expected before the next meeting in September, the Fed Chair may choose to keep all options open until there is more clarity on the direction of the economy and appropriate policy steps.

"There is no doubt the FOMC will leave rates unchanged," said Bill Nelson, Chief Economist at the Bank Policy Institute, in a Tuesday note. "The real question is whether they will signal a greater readiness to cut rates at their September meeting."

Meanwhile, President Donald Trump continues to call for a rate cut. Powell will also likely be asked about the Federal Reserve's 2.5 billion dollar headquarters renovation project, which has become a target of Republican criticism toward the Fed.

It is worth noting that after this week, the Fed will hold only three more monetary policy meetings this year. In June, Fed officials indicated plans to cut rates by 25 basis points in 2025, based on their median forecast. However, the question remains how much Powell may shift expectations in that direction. Investors already price in a more than 60% probability of a rate cut in September, but Fed officials may be reluctant to see that probability rise further before they've reviewed the data leading up to the meeting.

Policymakers will still receive two more employment reports, including July's report due this Friday. They will also have additional data on inflation, consumer spending, and housing.

As for the current EUR/USD technical picture, buyers now need to reclaim the 1.1580 level. Only then can they aim for a test of 1.1620. From there, it may be possible to reach 1.1635, though doing so without support from large market participants will be quite difficult. The most ambitious target remains the 1.1660 level. In case of a decline, significant buying interest may only appear around 1.1560. If not, it would be preferable to wait for a retest of the 1.1510 low or consider opening long positions from 1.1480.

As for the GBP/USD technical setup, pound buyers need to break through the nearest resistance at 1.3365. Only then can they target 1.3385, though breaking above that level will be a challenge. The most distant target is the 1.3415 level. If the pair falls, bears will try to regain control over 1.3330. If successful, a break of that range would deliver a serious blow to bullish positions and push GBP/USD down to the 1.3295 low, with the potential to reach 1.3255.