EUR/USD Forecast: Euro remains fragile heading into Fed policy announcements

• EUR/USD holds above 1.0800 in the European morning on Wednesday.
• The Federal Reserve is expected to leave its policy settings unchanged.
• Market positioning suggests that there is room for further USD strength in case of a hawkish Fed surprise.

After fluctuating in a tight channel above 1.0800 on Tuesday, EUR/USD closed the day marginally higher. With the US Dollar (USD) staying resilient against its rivals early Wednesday, however, the pair is finding it difficult to extend its recovery. 

Slightly better-than-expected growth figures from the Eurozone area helped the Euro find a foothold on Tuesday. Additionally, European Central Bank (ECB) President Christine Lagarde reiterated that they would need to be further into the disinflationary process before cutting the rates, supporting the currency.