EUR/USD is trading in a tight range near the psychological 1.0500 mark during the European session on Wednesday. The major currency pair is consolidating as investors await the outcome of the Federal Reserve's (Fed) final policy meeting of the year, which will conclude at 19:00 GMT.

The Fed will also release a revised Summary of Economic Projections (SEP), also known as the dot plot, which shows the latest economic projections and where policymakers see the Federal Funds Rate heading in the medium to long term.

Analysts at Bank of America (BofA) expect the Fed to cut interest rates by 25 basis points (bps) to a range of 4.25%-4.5%. The CME FedWatch tool also shows that market participants have fully priced in a 25 bps rate cut.

With traders fully pricing in the standard rate cut announcement, investors will be primarily focused on Fed Chairman Jerome Powell's press conference on interest rate guidance.

BofA analysts expect Powell to signal a gradual approach to rate cuts going forward, potentially indicating a pause in January if economic data meets expectations.

Source: FXStreet