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The Euro-Dollar is struggling to clear 1.1630, with MUFG warning the EUR/USD looks overvalued as European gas and growth risks build. The Euro to Dollar (EUR/USD) exchange rate has climbed back towards 1.1600, but the move is starting to look less convincing once valuation and Europe's energy exposure are brought into the picture.
EUR/USD traded around 1.1597 early on Wednesday after reaching 1.1614 earlier in the week.
Softer expectations for Federal Reserve tightening should, on paper, have given the Euro more room to run. It hasn't quite happened.
MUFG sees the hesitation as significant.
“The 200-day moving average is offering resistance at 1.1630,” the bank said, noting that the best level reached on Monday was 1.1614. “We do certainly sense a high level of caution in buying EUR/USD.”
Image: EUR/USD 48h chart EUR/USD has recovered from below 1.1570, but the latest advance still leaves the pair short of the 1.1630 area highlighted by MUFG.
The more striking warning comes from MUFG's valuation model.
“Our short-term regression model for EUR/USD already indicates current spot is about 2.5%-3.0% overvalued,” the bank said.
That is the awkward part. The Dollar has lost some rate support, yet MUFG argues the Euro is already trading richer than underlying short-term fundamentals justify.
Energy is central to the concern.
European gas storage is running just below the range seen in comparable years since 2011, while delayed winter purchases risk becoming more expensive as Asian LNG demand competes for supply.
MUFG also points to unusually low river levels across the Rhine, Danube, Loire and Po. That is not merely a transport problem. Lower waterways can disrupt industry, food production and power generation at the same time.
“If the refilling period continues to disappoint ahead of winter, a more severe terms of trade hit is likely,” MUFG warned.
Near and Medium-Term EUR/USD Outlook: ING Still Sees 1.18 ING is cautious about the immediate upside too, although its medium-term conclusion is notably more bullish.
“Yesterday's EUR/USD rally stalled shortly above 1.16, and investors will be reluctant to push it much higher given energy price developments,” ING's Chris Turner said.
ING also thinks the Dollar is “not quite ready to make a sustained break lower just yet”, with higher energy prices and long-dated US Treasury yields offering support. It expects DXY to remain broadly inside 99.40-100.00 in the near term.
Still, the bank keeps EUR/USD at 1.17 for end-September and 1.18 for year-end, based on its view that the Fed does not raise rates.
Image: EUR/USD forecast outlook The wider bank consensus also leans higher, with the median path reaching around 1.18 by Q2 2027, although the full forecast range stretches from roughly 1.10 to 1.21.
So there are really two EUR/USD stories here.
ING still sees a route higher once Fed tightening risk fades.
MUFG is warning that the Euro may already have run ahead of the near-term fundamentals, especially if Europe's energy bill starts climbing again.
For the immediate trade, 1.1630 looks like the line that matters.
Danske Research Team notes that EUR/USD has extended its rebound towards 1.1600 as European yields remain elevated while US Treasury yields stabilize after the recent spike. The team argues markets are pricing too many ECB rate hikes, suggesting scope for European rates to move lower, while upcoming FOMC Minutes remain the key catalyst for further direction.
EUR/USD recovers as yields stabilize and ECB bets shift"It was an ugly cocktail for European assets yesterday with equities moving lower, European yields rising as the curve bear-flattened and commodities tracking higher. While risk sentiment remains sour in Asia, US yields have steadied in overnight trading and the 10Y UST yield has dropped from an intraday high of 4.75% yesterday to 4.69%. In our Yield Outlook released yesterday, we conclude that markets expect too many ECB hikes and see room for European rates to move lower."
"In Germany, the ZEW economic sentiment surprised to the upside in August, with expectations rising to 34.2 (cons.: 30.0, prior: 26.3), while the assessment of the current situation improved to -61.1 (cons.: -69.3, prior: -77.6). The current situation is now almost back at the levels seen before the war in Iran, although expectations remain somewhat lower."
"The data follows a string of upside growth surprises in the euro area. Growth is also increasingly supported by fiscal stimulus."
"In the euro area, final July HICP inflation is due and is expected to confirm the flash estimate at 2.9% y/y for headline inflation and 2.5% y/y for core inflation."
"In the US, the minutes from the FOMC's July meeting are released this evening. Markets are looking for a more detailed sense of the committee's thinking beyond Kevin Warsh's limited forward guidance. Three participants voted in favour of a hike, and since then, several others have flagged willingness to support a hike if warranted by incoming data."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Key Points:Today's Fed minutes are the primary dollar catalyst as traders look for details on policymakers' views on rates and inflation.Markets currently favor a September Fed hold, according to the probabilities cited in your draft, reducing support from U.S. rate expectations.ECB tightening expectations are providing fundamental support for the euro as inflation remains above the central bank's target.UK inflation data are an important sterling catalyst as the BoE balances persistent price pressures against a cooling labor market.DXY remains vulnerable below the 99.89–100.19 EMA cluster, with 99.38 acting as the critical downside support.
In this article:GBP/USD
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GBP/USD ForecastEUR/USD
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EUR/USD ForecastUS Dollar News: Fed Minutes, ECB Hike Bets and UK Inflation Drive FX
Opening today, the focus is on upcoming minutes from the July Fed meeting. These will offer insight on how divided members were on the call regarding another potential rate hike. Although recent domestic data has shown signs of slowing (i.e. negative jobs report, milder inflation reports, lack of retail spending) current markets lean towards a chance of the Fed holding rates at the September meeting at about 65%, whereas a potential tightening is at 35%. Middle East supply concerns also mean that the dollar is not safe from another surprise inflation surge and a potential for more rate hikes.
On the other hand, the Euro has the potential to harden against the dollar given that, although inflation in the EU is at 2.9% (compared to the ECB’s target of 2%), eurozone inflation is still due to energy costs, which of course are transitory. A Reuters survey shows that 57 out of the 69 economists surveyed anticipate an increase of 25 basis points in the interest rate by the ECB from 2% to 2.5% in September, with a pause on interest rate hikes until the middle of 2027 at least.
Although inflation is falling in the UK as seen in the cooling of labor put in (i.e. dip in job vacancies and private sector wage growth), it is still signaling a negative outlook for GBP.
Investors are waiting for UK July inflation data coming Wednesday lunchtime. Analysts expect an increase in headline inflation to 2.9% from 2.6%. 56 of 64 economists surveyed by Reuters expect the BoE to maintain Bank Rate at 3.75% through the end of 2023.
For August 19, the main FX theme is policy divergence: fading Fed-hike expectations, a more hawkish ECB, and a BoE becoming more constrained by cooling jobs data, even with mounting inflationary pressures.
U.S. Dollar Index Technical Analysis: DXY Pressures $99.38 Support as Momentum Stays Weak
Dollar Index Price Chart – Source: Tradingview
The U.S. Dollar Index is trading at approximately $99.55 after a long slide from the $101.60 zone. The price, which remains below the 50 and 100-day EMAs positioned at $100.19 and $99.89, respectively, keeps the short term outlook negative. The last few candles are clustering above the ascending trendline and the $99.38 support zone, making this area crucial for the potential continuation of the broader recovery.
The RSI line is at 38, indicating weak momentum and raising the risk for another test to the downside. Immediate resistance is at $100.06, then at $100.66, $101.30 and $101.77. In the case of a confirmed break below $99.38, we may see $98.94, $98.41 and $97.84
While the DXY is trading below the $99.89 – $100.19 zone, it is vulnerable in my opinion. The DXY can bounce to $100.06 if it holds $99.38, however, a daily close below $99.38 would be a much stronger bearish signal.
GBP/USD Technical Analysis: Pound Consolidates Above Rising Trendline Near $1.3540
GBP/USD Price Chart – Source: Tradingview
GBP/USD stands at $1.3541 in the 2-hour chart, consolidating after moving towards the resistance area of $1.3565. For now, price resides above the 50-EMA at $1.3529 and the 100-EMA at $1.3510. The bullish structure is supported by an ascending trendline. The recent price action in the form of sideways candlesticks is signaling a pause in the price action rather than a reversal.
At the momentistics index (RSI) stands at the 53 level, which indicates neutral momentum after a decline from higher level. The price area of $1.3565 is the next resistance zone, followed by $1.3596, $1.3629 and $1.3660. On the opposite side, we see support zone at $1.3520, $1.3476, and $1.3434.
GBP/USD is bullish above $1.3510 – $1.3520. A break above $1.3565 will stimulate the buying amongst traders and push the price higher towards $1.3596, while a move below the trendline will likely push the price down towards $1.3476.
EUR/USD Technical Analysis: Euro Holds Rising Trendline Above $1.1570
EUR/USD Price Chart – Source: Tradingview
The price of EUR/USD is at $1.1586, while the broader bullish structure is above the rising trendline. The price is above the 50 EMA and 100 EMA located at $1.1569 and $1.1553, respectively. The latest price consolidation shows buyers are supporting the pullbacks after the advance to $1.1614
The RSI line is at 59 and is a good indicator of momentum as it is not in the overbought area. The next resistance price levels are at $1.1614, $1.1649 and $1.1684. Support levels are at $1.1570, $1.1545, $1.1515 and $1.1480.
I think that EUR/USD is technically positive above $1.1545-$1.1570 and the rising trendline. If $1.1614 is broken to the upside, then the $1.1649 level comes next. Selling EUR/USD below $1.1545 will shift the bias to the downside and target the lower EMAs.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
The EUR/USD pair trades in positive territory near 1.1585 during the early European trading hours on Wednesday. The Euro (EUR) edges higher against the US Dollar (USD) as the German ZEW survey beat forecasts. The European Central Bank (ECB) President Christine Lagarde’s is set to speak later on Wednesday.
Data on Tuesday showed that the German ZEW Survey - Economic Sentiment came in at 34.2 in August, versus 26.3 prior, better than the estimates of 30.00. The ZEW Survey - Current Situation improves to -61.1 in August, compared to -77.6 in July, stronger than the -68.8 expected.
Financial markets are now pricing in a continuation of the ECB hiking cycle. The ECB Watch Tool indicates a 90% to 94% probability of a 25 basis points (bps) hike to 2.50% at the next policy meeting scheduled for September 9.
Analysts at MUFG note that the recent shift in US Dollar sentiment, driven by last week’s data releases that have “helped ease Fed rate hike expectations,” has yet to trigger any meaningful liquidation of long Dollar positions. They point out that “DXY remains supported above the 200-day moving average level of 99.185,” underscoring that the softer policy outlook has not translated into “any great sell-off” in the Dollar index.
In the daily chart, EUR/USD holds a bullish near‑term bias as spot remains above the 100‑day moving average (MA) and the Bollinger middle band, suggesting a constructive underlying trend after recovering from the lower band support around 1.1364. Momentum is supportive, with the Relative Strength Index (14) at 63.8, hinting that buyers retain control but are approaching overbought territory rather than entering it decisively.
On the topside, initial resistance is defined by the August 17 high of 1.1614. The next hurdle is seen at the Bollinger upper band near 1.1650, where upside attempts could start to stall.
On the downside, immediate support is seen at the 100‑day MA at 1.1570, followed by the Bollinger middle band at 1.1505. A deeper pullbacks would look to the recent floor at the Bollinger lower band around 1.1365 to preserve the broader upturn.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Most currencies look stable and lack directional clarity just now as the US-Iran conflict intensifies but fails to induce volatility into forex markets. Crucial resistances and supports need close watch to get some cues in the near term. Dollar Index holds steady below 99.50/100 and needs a break above these levels on the upside to turn bullish while Euro holds between 1.1550-1.16 for now. EURJPY is bullish towards 185/186 while above support at 184; USDJPY looks positive for a slow rise towards 160 while above 159. USDCNY is likely to hold above 6.74 for some time before resuming its downtrend. Aussie could trade between 0.70-0.71 for a few sessions before a break on either side is seen for further directional clarity. Pound can target 1.36/37 while above support at 1.35. EURINR will have to sustain a break above 111 to move up further. View is bullish. USDINR is trading at crucial levels. A decline or break above 95.75 would indicate the further near-term direction for the Rupee.
The US Treasury Yields have come down slightly from their highs. There is room to rise more to test their resistance. As mentioned yesterday, we need to see if we are going to get a correction after that or an extended rise. The German Yields continue to move up. The bullish view is intact. They can rise more from here. The 10Yr GoI has come off from its high. The chance of an extended rise is still alive. Thereafter we can expect it to resume the downtrend.
Global equities remain weak, with major indices under pressure amid the ongoing sell-off in technology stocks. Dow and DAX can decline further towards 53000 and 26000 respectively, while Nifty could fall towards 24000 after a gap-down opening. Nikkei has weakened sharply and can decline towards 65000-64000. Shanghai has also turned lower and could remain range-bound within 3900-4000 before further directional clarity emerges.
Brent and WTI are likely to stay range-bound within $80-$95 and $75-$90 respectively until a breakout provides further direction. Gold continues to consolidate within $4350-$4500 but remains bullish above $4200, with a break above $4500 opening the way towards $4600 and higher. Silver has dipped but can still rise towards $70-$75. Copper remains under pressure but could rebound towards $6.65-$6.75 if support near $6.35-$6.30 holds. Natural Gas has strengthened above $2.75 and can rise further towards $2.80.
Visit KSHITIJ official site to download the full analysis
Chris Turner at ING describes EUR/USD as contained after a rally stalled just above 1.16, with investors cautious due to high natural gas prices and upcoming FOMC minutes. He expects a 1.1520–1.1580 range near term, while higher energy supports ECB hike expectations. ING maintains forecasts for EUR/USD at 1.17 by end-September and 1.18 by year-end.
Euro capped by energy and Fed risk"Yesterday's EUR/USD rally stalled shortly above 1.16, and investors will be reluctant to push it much higher given energy price developments and ahead of the FOMC minutes tomorrow night."
"Despite recent positive economic surprises in the eurozone, the fact that natural gas prices are close to their highs for the year merits some caution."
"Higher energy prices are firming up expectations of a 25bp hike from the European Central Bank in September and keeping views alive of another 25bp hike by early next year."
"We could see EUR/USD trade out a 1.1520-1.1580 range today. And a reminder that we have a forecast for 1.17 by the end of September on the view that the Fed does not hike and 1.18 for year-end."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
In comparison to the U.S. dollar, the euro has a stronger monetary policy backdrop. According to a Reuters survey, 57 of 69 economists expected the ECB to raise its deposit rate of 2.50 percent in September, while inflation continues to be above the ECB’s target of 2 percent. Policy divergence in favor of the euro continues to increase as the expectations surrounding the Fed’s policy continue to decline.
Sterling is also benefiting from policy divergence. UK growth for the second quarter was at 0.4 percent, and the Bank of England’s Chief Economist, Huw Pill, indicated that the recent growth that was also in excess of expectations, is a good reason for policy to be tightened. Currently markets are calling for at least one additional hike by the BoE in 2026. New data on the labor market and inflation in the U.K. will be released this week that will be useful in evaluating this position.
The main issue for all three currencies is the Middle East. Renewed U.S.-Iran tensions and ongoing disruptions through the Strait of Hormuz pose risks for another energy-related inflation shock, which could once again bring expectations of tighter policy if price pressures begin to accelerate.
U.S. Dollar Index Technical Analysis: DXY Defends $99.38 Support but Remains Below Key EMAs
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report that EUR/USD briefly broke above major resistance at 1.1610 to 1.1614 before fading, leaving the Euro in a near-term consolidation between 1.1560 and 1.1600. The 1–3 week outlook remains positive, but the pair must break and hold above 1.1615 to open 1.1655, with strong support anchored at 1.1525.
Euro consolidates after failed breakout"24-HOUR VIEW: EUR rose sharply to a high of 1.1585 last Friday. Yesterday, we indicated that “the rapid rise appears to be running ahead of itself, but as long as 1.1545 (minor support is at 1.1555) is not breached, EUR could rise to 1.1590.” We added, “based on the prevailing momentum, a sustained rise above this level appears unlikely, and the major resistance at 1.1610 is unlikely to come under threat.” While EUR held above 1.1545 (low was 1.1558), it broke above 1.1610, reaching a high of 1.1614. However, EUR was unable to hold on to its gains, as it retreated to close little changed at 1.1579 (+0.09%). EUR appears to have entered a consolidation phase. Today, we expect EUR to trade between 1.1560 and 1.1600."
"1-3 WEEKS VIEW: We revised our EUR view from neutral to positive yesterday (17 Aug, spot at 1.1570). We highlighted the following: “The price action suggests that EUR is likely to trade with an upside bias from here. Currently, it is unclear whether EUR has sufficient momentum to reach the major resistance at 1.1610. On the downside, a break below 1.1525 (‘strong support’ level) would indicate that EUR is likely to continue range-trading.” We did not expect EUR to rise sharply and briefly to 1.1614. While the upside bias remains intact, given that there is no significant increase in upward momentum, EUR must break and hold above 1.1615 before a move to 1.1655 can be expected. On the downside, the ‘strong support’ remains unchanged at 1.1525."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The euro-dollar has held its post-Fed gains, but Bank of America sees limited scope for a stronger near-term rally.
The Euro to Dollar exchange rate (EUR/US) tradd around 1.1579 on Monday, close to its August high of 1.1585 and around 0.2% higher for the month.
EUR/USD has recovered from June’s low near 1.1325 but remains well below January’s 1.2075 peak.
Image: EUR/USD intraday chart
Bank of America FX strategists say its “near-term bullish USD conviction has reduced”, although the conditions are not yet in place for a decisive bearish Dollar stance.
US data have surprised on the downside and September Fed tightening expectations have fallen sharply, but EUR/USD has still “struggled to rally further”.
The bank argues that Middle East uncertainty is part of the explanation, with elevated European gas prices “capping EUR appreciation”.
Positioning has also changed.
BofA says reduced Euro shorts mean there is now less fuel for a squeeze higher, while markets may find it difficult to price out Fed hikes completely with another round of labour-market and inflation data due before September.
Fed Chair Kevin Warsh’s Jackson Hole speech is therefore an important near-term test, with BofA expecting markets to focus closely on any clarification of the Fed’s communication strategy.
Image: Euro-to-Dollar exchange rate forecast outlook over next 4 quarters
The Exchange Rates UK Research Sentiment Survey for August 2026 remains mildly constructive beyond the near term.
BofA sees EUR/USD around 1.15 in three months, 1.17 in six months and 1.20 in twelve months.
That would leave the pair close to current levels initially, before a more meaningful Euro recovery develops further into 2027.
Exchange Rates UK Research
Our currency coverage draws on live market data, official economic releases and published bank research.
EUR/USD trims earlier gains on Monday as the US Dollar (USD) shows signs of stabilization after opening the week under selling pressure. At the time of writing, the pair trades around 1.1580 after touching an intraday high of 1.1614, its highest level since June 17.
The Greenback is caught between fading expectations of an imminent Federal Reserve (Fed) rate hike and tensions in the Middle East, which keep some defensive demand alive and limit the downside.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 99.57 after touching 99.30, its weakest level since June 5.
Traders no longer expect the Fed to raise interest rates at its September meeting. According to the CME FedWatch tool, markets now assign around a 70% probability that the central bank will keep rates unchanged next month.
The shift follows recent US economic data pointing to weaker labour demand, softer consumer spending and easing inflationary pressure. In contrast, the European Central Bank (ECB) is widely expected to raise interest rates for the second time this year in September as policymakers seek to bring inflation back toward the 2% target.
On the geopolitical front, the 60-day memorandum of understanding signed by the United States and Iran in June expired on Monday without a permanent agreement, while shipping through the Strait remains heavily restricted.
Against this backdrop, energy-driven inflation risks remain alive. This supports expectations of an ECB rate hike in September while preventing markets from fully ruling out a Fed hike later this year.
Looking ahead, the final Eurozone Harmonized Index of Consumer Prices (HICP) data for July are due on Wednesday. Core HICP inflation is expected to be confirmed at 2.5% YoY.
In the US, traders will examine the Minutes of the July Federal Open Market Committee (FOMC) meeting, also due on Wednesday, for fresh clues about the Fed’s policy path.
ECB FAQs The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
Weekly Technical Trade Levels on USD Majors, Commodities & Stocks
Technical trade setups we are tracking into the start of the week on the USD Majors, commodities, and equity indices.
Next Weekly Strategy Webinar: Monday, August 24 at 8:30am ET
Review the latest Video Updates or Stream Live on my YouTube playlist
In this webinar we take an in-depth look at the technical trade levels for the US Dollar (DXY), Euro (EUR/USD), British Pound (GBP/USD), Australian Dollar (AUD/USD), Canadian Dollar (USD/CAD), Japanese Yen (USD/JPY), Swiss Franc (USD/CHF), Gold (XAU/USD), Crude Oil (WTI), Bitcoin (BTC/USD), S&P 500 (SPX500), Nasdaq (NDX), and Dow Jones (DJI). These are the levels that matter on the technical charts into the weekly open. The assets are chaptered on the recording for your convenience.
US Dollar Index Price Chart – USD 240min (DXY)
Chart Prepared by Michael Boutros, Sr. Technical Strategist; DXY on TradingView
Notes: The U.S. Dollar Index is testing pivotal support around the monthly range low at 99.41/49- a region defined by the 38.2% retracement of the yearly advance and the January swing high. Just below this zone the 200-day and 52-week moving averages converge on the lower parallel near 99.04/18. A break / daily close below this slope would be needed to fuel the next major leg of the decline towards the August high-day close (HDC) / May low at 98.68/69 and the objective yearly open at 98.24.
Monthly open resistance stands at 99.69 and is baked by the 2024 low / low close at 100.16/35. Broader bearish invalidation remains with the March high and the 61.8% extension of the January advance at 100.64/77.
Bottom line: The dollar is testing a major support pivot at the August opening range lows- risk for exhaustion / price inflection into the lower parallel. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies would need to be limited to the median-line IF price is heading lower on this stretch. Review my latest US Dollar Technical Forecast for a closer look at the longer-term USD technical trade levels.
Euro Price Chart – EUR/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView
Notes: Euro is attempting to mark a fourth consecutive weekly advance, and the rally may be vulnerable into the upper parallel. There are numerous technical hurdles here starting with the 1.618% extension of the June rally at 1.1609, backed closely by the 200-day & 52-week moving averages and the 61.8% retracement of the April decline at 1.1628/33 and 1.1649. A breach / weekly close above this level is ultimately needed to fuel the next major leg of the advance toward the yearly open at 1.1746.
Watch today’s close with respect to the May / January lows at 1.1576/79. Monthly open support converges on the median line early in the week at 1.1535 with near-term bullish invalidation now raised to the 38.2% retracement of the June rally / August range low at 1.1500/04.
Bottom line: The Euro rally has extended into technical resistance at the upper bounds of a multi-week uptrend. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- losses should be limited to 1.1535 IF EUR/USD is heading higher on this stretch with a close above 1.1649 needed to fuel the next leg of the rally.
Australian Dollar Price Chart – AUD/USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; AUD/USD on TradingView
Notes: AUD/USD has rallied more than 3.8% off the June low with the rally testing resistance early in the week at the 61.% retracement of the May decline at 7120. Daily momentum has reached the highest level since January and the first major test of the July breakout.
Initial support rests at with the weekly open at 7082/83 with near-term bullish invalidation steady at a major Fibonacci cluster around 7003/23. Note that the lower parallel converges on this zone into the close of the week and losses below this slope would suggest a more significant high is in place, and a larger reversal is underway. A topside breach / daily close above 7120 exposes the upper parallel (currently near 7160s) and a longer-term Fibonacci confluence near 7208/14.
Bottom line: Aussie is testing technical resistance here just ahead of the upper parallel. Again, watch the daily close. From a trading standpoint, losses should be limited to 7082 IF price is heading higher on this stretch with a close above 7120 needed to fuel the next leg of the rally.
Economic Calendar – Key Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
--- Written by Michael Boutros, Senior Technical Strategist
Key Points:EUR/USD tested multi-week highs as traders remained bullish. USD/CAD moved away from session lows as traders reacted to inflation data from Canada. USD/JPY remained stuck below the key resistance level as traders focused on Japan's GDP Growth Rate report.
EUR/USD
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USD/JPY Forecast
U.S. Dollar Tested New Lows
DXY 170826 4h Chart U.S. Dollar Index is losing some ground as traders reduce bets on hawkish Fed. Traders also focus on the NAHB Housing Market Index report for August. The report indicated that NAHB Housing Market Index increased from 34 in July to 35 in August, compared to analyst forecast of 33.
Currently, U.S. Dollar Index is trying to settle below the support level at 99.25 – 99.40. In case U.S. Dollar Index manages to settle below the 99.25 level, it will head towards the next support, which is located in the 98.60 – 98.75 range.
EUR/USD Tests Resistance At 1.1600 – 1.1615
EUR/USD 170826 4h Chart EUR/USD gained ground as traders focused on general weakness of the American currency. Treasury yields were mixed. The yield of 2-year Treasuries pulled back below the 4.17% level, while the yield of 10-year Treasuries settled above 4.70%.
The nearest resistance level for EUR/USD is located in the 1.1600 – 1.1615 range. in case EUR/USD manages to settle above the 1.1615 level, it will head towards the next resistance at 1.1685 – 1.1700. RSI has recently moved back into moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
GBP/USD Tests Multi-Week Highs GBP/USD 170826 4h Chart GBP/USD moved higher as traders remained bullish at the start of the week. Traders bet that Fed will leave the federal funds rate unchanged at the next meeting in September.
From the technical point of view, GBP/USD continues its attempts to settle above the resistance level at 1.3550 – 1.3565. If GBP/USD climbs above the 1.3565 level, it will head towards the next resistance, which is located in the 1.3635 – 1.3650 range.
USD/CAD Moves Away From Session Lows As Traders Focus On Canada’s Inflation Data USD/CAD 170826 4h Chart USD/CAD attempts to rebound from multi-week lows as traders react to inflation data from Canada. Inflation Rate increased from 2.8% in June to 3% in July, compared to analyst forecast of 2.9%. Core Inflation Rate grew from 2.1% to 2.3%, compared to analyst consensus of 2.2%.
If USD/CAD settles back above the 1.3880 level, it will head towards the nearest resistance at 1.3920 – 1.3935. On the support side, a successful test of the support at 1.3825 – 1.3840 will open the way to the test of the next support level at 1.3735 – 1.3750.
USD/JPY Is Mostly Flat As Japan’s GDP Growth Rate Misses Estimates
USD/JPY 170826 4h Chart USD/JPY remains stuck below the key resistance level at 159.50 – 160.00 as traders react to Japan’s GDP Growth Rate report. The report showed that GDP Growth Rate was +0.3% in the second quarter, compared to analyst forecast of +0.5%.
Traders are focused on Fed policy outlook and are worried about potential interventions from the BoJ. The Japanese yen is fundamentally weak due to the difference in interest rates, but recent interventions have made traders cautious.
If USD/JPY climbs above the 160.00 level, it will move towards the next resistance level at 161.50 – 162.00. A move above the 162.00 level will push USD/JPY towards the 164.00 level.
On the support side, a move below the 50 MA at 158.79 will open the way to the test of the nearest support level at 157.50 – 158.00.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
Scotiabank strategists Shaun Osborne and Eric Theoret report the Euro (EUR) is firming as Eurozone economic resilience and narrowing yield spreads versus the US support EUR/USD. Short-term technicals are described as bullish, with intraday and daily momentum positive and the weekly study close to turning higher. They see a push through 1.1625/50 opening further gains toward the mid‑1.17s, with support at 1.1550/75.
Euro supported by resilience and yield spreads"The firming trend in the EUR reflects economic resilience in the Eurozone despite headwinds from energy and drought conditions as well as the narrowing yield spreads between the Eurozone and the US."
"While the yield gap remains substantial in the USD, the 2Y spread has narrowed to –136bps this morning, the smallest US yield advantage since May."
"Bullish—The EUR is firmer for a fourth week running. Intraday and daily trend momentum is bullish and the weekly study is close to flipping to positive."
"The short-term bull objective will be an extension through the 1.1625/50 range which should then open up further gains to the mid-1.17s. Support is 1.1550/75."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
In the short-term forex markets, we have seen a bit of US dollar soften a touch. At this point, the markets continue to see volatility.
In this article:EUR/USD
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EUR/USD ForecastUSD/CAD
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USD/CAD ForecastGBP/USD
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GBP/USD Forecast In the short-term forex markets, the euro has risen a bit in early trading on Monday. It is starting to pull back just a touch, but it looks supported to me.
Now, I’m not massively bullish this market, but I recognize that we are starting to see some softness in the U.S. dollar. I’ll be watching right around 1.1550 for signs of support to take advantage of, as we’ve had a nice bottoming pattern from a longer-term consolidation area.
I recognize that right around 1.1650 there could be some resistance, so short-term bounce play might be what I’m looking to do here, all things being equal.
USD/CAD The U.S. dollar has fallen against the Canadian dollar. I am particularly interested in the 1.39 level on any bounce for signs of exhaustion, assuming that the U.S. dollar continues to lose strength.
There are reports out there in the media right now about a potential ceasefire between the United States and Iran. We’ll see what influence that has on the market. There was an initial jolt of risk appetite coming back into the market that seems to have been abated.
GBP/USD The British pound against the U.S. dollar is another one I’m watching. On the hourly chart, we’re forming a rising wedge. A pullback toward the 1.3525 area might be interesting for value. It is also the measured move of that pattern if it does break.
The British pound has been one of the better performers against the dollar for a while, so when I find myself in a situation where I’d rather buy the dollar, I actually avoid this pair. But selling the dollar, it has performed fairly well in comparison to some of its contemporaries.
We did just recently break a swing high at the 1.3550 level, so that would be a retest, something worth watching. We’ll see. If I get that opportunity to buy it a little cheaper, I might just do so.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.
The EUR/USD pair builds on last week's bounce from the vicinity of the 1.1500 psychological mark and gains strong follow-through positive traction on Monday. The momentum lifts spot prices beyond the 1.1600 round figure during the first half of the European session and is supported by a broadly weaker US Dollar (USD).
Traders scaled back their expectations for an immediate interest rate hike by the US Federal Reserve (Fed) after data released last week pointed to signs of cooling inflation and a slowdown in consumer spending. This, in turn, dragged the USD Index (DXY), which tracks the Greenback against a basket of currencies, to an over two-month low and acts as a tailwind for the EUR/USD pair.
From a technical perspective, spot prices confirmed an intraday breakout through the 100-day Simple Moving Average (SMA) and the 50% Fibonacci retracement level of the April-June decline. Moreover, a firm Relative Strength Index (RSI) near 67 and a positive, mildly rising Moving Average Convergence Divergence (MACD) histogram hint that buyers still have the upper hand. Risks of overextension might cap the EUR/USD pair near the 200-day SMA at 1.1630, and the 61.8% retracement at 1.1645 sit just overhead.
A sustained break above this band could open the way toward the 78.6% retracement at 1.1732 and ultimately the cycle high near 1.1843. On the downside, initial support emerges at the 50% retracement at 1.1584 ahead of the 100-day SMA at 1.1569. A deeper pullback would expose the 38.2% Fibo. level at 1.1522 and then the 23.6% retracement at 1.1447, with the broader bullish structure only seriously threatened on a drop toward the 1.1324 swing low.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
EUR/USD daily chart
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.23%-0.10%-0.11%-0.10%-0.49%-0.46%-0.50%EUR0.23%0.10%0.13%0.13%-0.24%-0.24%-0.27%GBP0.10%-0.10%0.00%0.00%-0.33%-0.37%-0.37%JPY0.11%-0.13%0.00%0.01%-0.37%-0.34%-0.36%CAD0.10%-0.13%-0.01%-0.01%-0.38%-0.36%-0.39%AUD0.49%0.24%0.33%0.37%0.38%0.03%-0.07%NZD0.46%0.24%0.37%0.34%0.36%-0.03%-0.03%CHF0.50%0.27%0.37%0.36%0.39%0.07%0.03%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD begins the week around 1.1588, reaching its highest level in eight weeks. The euro has been supported by dollar weakness following fresh US economic data, which revived doubts about the stability of the US economy and reduced expectations of imminent Federal Reserve tightening.
The University of Michigan’s preliminary consumer sentiment index fell to 51.0 in August, down from 54.2 in July and below the 55.2 forecast. The current conditions index declined to 51.8 from 54.8, while the expectations component dropped to 50.6 from 55.4. At the same time, short-term inflation expectations ticked up to 4.3% from 4.2%, while five-year expectations held steady at 3.3%.
Estimates of US economic growth have also become less confident. The Atlanta Fed’s GDPNow model lowered its Q3 GDP growth forecast to 4.3% from 5.8%, while the New York Fed’s Nowcast estimates growth at approximately 2.1%. This widens the tension between continued economic activity and deteriorating consumer expectations.
For the dollar, the outlook remains mixed. Weak consumer indicators and lower growth forecasts weigh on the US currency, but elevated short-term inflation expectations prevent markets from completely abandoning the prospect of a hawkish Fed policy stance.
As a result, the baseline for EUR/USD remains moderately positive, but further direction will depend on new signals regarding the US economy and the Federal Reserve’s policy stance.
Technical Analysis
On the H4 chart of EUR/USD, the market continues to develop its consolidation range. The consolidation range around the 1.1561 level has practically formed. An upside breakout would suggest a corrective wave developing to 1.1594, followed by a decline to 1.1500. A direct downside breakout would open potential for a downward wave to 1.1400, with the prospect of the trend continuing to 1.1260. Technically, this scenario is confirmed by the MACD indicator-its signal line is above the zero level but pointing strictly downwards, reflecting continued bearish momentum with the potential for the downward trend to persist.
On the H1 chart, the market has completed the next growth wave to the 1.1555 level. A consolidation range is currently forming around this level. A range expansion up to 1.1594 is expected, followed by a decline to 1.1500, with the prospect of continuing the wave to 1.1400. Technically, this scenario is confirmed by the Stochastic oscillator-its signal line is above the 80 level and pointing strictly downwards to 20.
Conclusion
EUR/USD has climbed to an eight-week high, supported by a weaker dollar following disappointing US consumer sentiment data and downward revisions to growth forecasts. The University of Michigan survey showed a sharp decline in confidence, while the Atlanta and New York Fed growth estimates have been trimmed. However, rising short-term inflation expectations keep the prospect of Fed tightening alive, limiting the dollar’s downside. Technically, the pair may see a further push towards 1.1594 before a potential pullback to 1.1500, with the broader trend dependent on upcoming US economic data and Fed signals. The bearish structure remains intact, suggesting that any upside may be temporary.
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EUR/USD begins the week around 1.1588, reaching its highest level in eight weeks. The euro has been supported by dollar weakness following fresh US economic data, which revived doubts about the stability of the US economy and reduced expectations of imminent Federal Reserve tightening.
The University of Michigan's preliminary consumer sentiment index fell to 51.0 in August, down from 54.2 in July and below the 55.2 forecast. The current conditions index declined to 51.8 from 54.8, while the expectations component dropped to 50.6 from 55.4. At the same time, short-term inflation expectations ticked up to 4.3% from 4.2%, while five-year expectations held steady at 3.3%.
Estimates of US economic growth have also become less confident. The Atlanta Fed's GDPNow model lowered its Q3 GDP growth forecast to 4.3% from 5.8%, while the New York Fed's Nowcast estimates growth at approximately 2.1%. This widens the tension between continued economic activity and deteriorating consumer expectations.
For the dollar, the outlook remains mixed. Weak consumer indicators and lower growth forecasts weigh on the US currency, but elevated short-term inflation expectations prevent markets from completely abandoning the prospect of a hawkish Fed policy stance.
As a result, the baseline for EUR/USD remains moderately positive, but further direction will depend on new signals regarding the US economy and the Federal Reserve's policy stance.
Technical analysis
On the H4 chart of EUR/USD, the market continues to develop its consolidation range. The consolidation range around the 1.1561 level has practically formed. An upside breakout would suggest a corrective wave developing to 1.1594, followed by a decline to 1.1500. A direct downside breakout would open potential for a downward wave to 1.1400, with the prospect of the trend continuing to 1.1260. Technically, this scenario is confirmed by the MACD indicator-its signal line is above the zero level but pointing strictly downwards, reflecting continued bearish momentum with the potential for the downward trend to persist.
On the H1 chart, the market has completed the next growth wave to the 1.1555 level. A consolidation range is currently forming around this level. A range expansion up to 1.1594 is expected, followed by a decline to 1.1500, with the prospect of continuing the wave to 1.1400. Technically, this scenario is confirmed by the Stochastic oscillator-its signal line is above the 80 level and pointing strictly downwards to 20.
ConclusionEUR/USD has climbed to an eight-week high, supported by a weaker dollar following disappointing US consumer sentiment data and downward revisions to growth forecasts. The University of Michigan survey showed a sharp decline in confidence, while the Atlanta and New York Fed growth estimates have been trimmed. However, rising short-term inflation expectations keep the prospect of Fed tightening alive, limiting the dollar's downside. Technically, the pair may see a further push towards 1.1594 before a potential pullback to 1.1500, with the broader trend dependent on upcoming US economic data and Fed signals. The bearish structure remains intact, suggesting that any upside may be temporary.
Key Points:Softer U.S. economic data have reduced expectations for another Fed rate increase, putting renewed pressure on the dollar.Markets are watching the Fed's July meeting minutes for clues on how policymakers assess slowing growth and inflation risks.Expectations for tighter ECB policy are supporting the euro as markets assess inflation, growth and upcoming activity data.DXY has broken its rising trendline and is testing the critical 99.38–99.42 support zone, leaving the technical bias vulnerable.EUR/USD remains bullish above 1.1580, while GBP/USD is approaching its next major resistance around 1.3587.
In this article:GBP/USD
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EUR/USD ForecastUS Dollar News: Fed Hike Bets Fade as Euro and Pound Gain Support The U.S. dollar begins the day on Wednesday, August 17, under pressure after a slow release of economic data reduced the likelihood of another rate hike from the Federal Reserve. U.S. retail sales slipped in July for the first time in nine months and cited worsening consumer sentiment in addition to last week’s trends in the CPI and PPI. The odds of a September rate hike have dropped to 30% from 50%. It is now expected that rates will hold at current levels, as the markets’ prediction is at a 70% chance of no change. There are now expectations that the Fed’s July meeting documents will be released to see if the economic slowdown is of concern.
The euro’s outlook is looking more favorable with the expectation that the European Central Bank will be the first to hike in September. A Reuters poll conducted August 10-13, showed 57 of 69 economists showed the expectation for a 25-basis point increase to 2.50%. The eurozone’s inflation data increased to 2.9% in July, citing persistent inflationary pressures due to the conflict in the Middle East. Economists also increased their outlook for growth from 2026 to 0.8%. The outlook for the flash PMIs and confidence indices for later this week will determine if growth has improved.
Sterling still has a relatively strong domestic base following the quickening of UK second-quarter GDP growth by 0.4% and by 0.3% in June. For the first half of the year, Reuters noted UK growth was the fastest among G7 economies. Even with the data, markets envisage about one bank rate increase for the UK this year making data releases for inflation and the labour market due this week very important.
From a currency point of view, the focus for August 17 is shrinking policy divergence. Slower U.S. data means the Fed is less likely to hike while the ECB and BoE both have tightening possibilities This means the EUR/USD, USD/JPY, and GBP/USD pairs shall be in focus for currency traders.
U.S. Dollar Index Technical Analysis: DXY Breaks Rising Trendline as $99.42 Support Comes Under Pressure Dollar Index Price Chart – Source: Tradingview The U.S. Dollar Index is currently testing $99.41 on the daily chart after dropping to below the rising trendline showing the broad recovery after the spring lows. Price is also under the $100.23 50-day EMA and the $99.90 100-day EMA, and continues to put pressure on the structure. The latest bearish candle has pushed $DXY into the $99.38-$99.42 support zone, making this region critical for the next move.
RSI is at 36, showing weak momentum and is approaching oversold territory. Immediate resistance is at $100.06, then $100.82 and $101.62. Breaking below $99.38 would take out $98.76 and $98.18.
I still believe the dollar is vulnerable until the broken trendline is cleared along with the EMA cluster. A move back above $100.06 would improve the outlook, and a break below $99.38 would negatively impact the dollar.
GBP/USD Technical Analysis: Pound Extends Bullish Run Toward $1.3587 GBP/USD Price Chart – Source: Tradingview GBP/USD is trading around $1.3558 on the 2-hour chart and is moving higher in a clear trend of higher highs and higher lows. Price is above the 50-EMA at $1.3514 and the 100-EMA at $1.3493, and rising trendline to further support the overall positive trend. Recent bullish candlesticks show steady buying, but are not impulsive, as price is moving much closer to important resistance.
RSI is at 67 which is an strong increase and shows the pair moving in the bearish direction towards overbought territory. At the moment the resistance is projected at $1.3587, then $1.3627 and then at $1.3670. For the GBP/USD, from a bullish perspective, you are likely to find support at $1.3539, then $1.3475 and $1.3434.
Where I stand, GBP/USD is especially bullish as long as it holds above $1.3510 and $1.3539. A break above $1.3587 would likely ignite a run toward $1.3627. If the bulls lose the trendline, it could weaken the bullish structure.
EUR/USD Technical Analysis: Euro Breaks Higher as Momentum Reaches Overbought Territory EUR/USD Price Chart – Source: Tradingview EUR/USD is currently at $1.1598 on the 4-hour chart. It has broken above the recent consolidation zone and $1.1580. Price is above the 50-EMA at $1.1539 and the 100-EMA at $1.1512 and therefore, is showing that short-term momentum is in the hands of buyers. EUR/USD is also above the trend line that has been supporting the recovery from the recent lows, which were made in July.
RSI is at the overbought region at 72, and therefore, could potentially mean a pullback or consolidation will happen in the short-term. Resistance is located at $1.1622, $1.1655, and $1.1686. Support is at $1.1580, $1.1545, and $1.1515.
In my opinion, the structure is bullish as long as EUR/USD stays above the $1.1580 level. If there is a clean break of the $1.1622 level, the move could end at $1.1655. If there is a break of the $1.1545 level, the latest breakout will not be valid.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
United Overseas Bank’s (UOB) Quek Ser Leang highlights that EUR/USD surged to 1.1585, leaving the Euro (EUR) with a firmer tone against the US Dollar (USD). Intraday, the pair could extend gains toward 1.1590, though 1.1610 is seen as strong resistance. Over 1–3 weeks, EUR/USD is expected to trade with an upside bias while holding above 1.1525, with 1.1610 a key hurdle.
Euro retains constructive short term tone"24-HOUR VIEW: While we expected EUR to “trade in a range” last Friday, we pointed out that “the slightly firmer underlying tone suggests it is likely to trade within a higher range of 1.1515/1.1550.” EUR subsequently dipped to 1.1524, but it surged during the NY session, reaching a high of 1.1585. The rapid rise appears to be running ahead of itself, but as long as 1.1545 (minor support is at 1.1555) is not breached, EUR could rise to 1.1590. Based on the prevailing momentum, a sustained rise above this level appears unlikely. The major resistance at 1.1610 is unlikely to come under threat."
"1-3 WEEKS VIEW: We revised our EUR view from conditional positive to neutral last Thursday (13 Aug, spot at 1.1525), indicating that EUR “appears to have entered a range-trading phase, between 1.1480 and 1.1580.” On Friday, EUR broke slightly above 1.1580 with a high of 1.1585. EUR closed 0.36% higher at 1.1569. While we would have preferred a more decisive close above 1.1580, the price action suggests that EUR is likely to trade with an upside bias from here. Currently, it is unclear whether EUR has sufficient momentum to reach the major resistance at 1.1610. On the downside, a break below 1.1525 would indicate that EUR is likely to continue range-trading."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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Key highlightsEUR/USD regained traction and climbed toward the 1.1580 resistance.A bullish trend line is forming with support near 1.1535 on the 4-hour chart.EUR/USD technical analysisLooking at the 4-hour chart, the pair tested the 1.1580 resistance. It settled well above the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour). On the upside, the pair is now facing a major hurdle at 1.1580.
The next major resistance might be 1.1620. A close above 1.1620 could start another steady increase. In the stated case, the bulls could aim for a move to 1.1685.
Any further gains might open the door for a test of 1.1750. If there is a fresh decline, the pair might find bids near 1.1535. There is also a bullish trend line forming with support at 1.1535. The next major support could be near 1.1500 and the 100 simple moving average (red, 4-hour).
The main support might be 1.1460 and the 200 simple moving average (green, 4-hour). A downside break and close below 1.1460 might send the pair toward 1.1420. Any more losses could open the door for a test of 1.1350.
EUR/USD regained traction and climbed toward the 1.1580 resistance.
A bullish trend line is forming with support near 1.1535 on the 4-hour chart.
Gold could start another increase and clear the $4,440 resistance.
GBP/USD seems to be eyeing an upside break above the 1.3555 resistance.
EUR/USD Technical Analysis
The Euro remained supported above 1.1500 against the US Dollar. EUR/USD started another increase above the 1.1550 resistance zone.
Looking at the 4-hour chart, the pair tested the 1.1580 resistance. It settled well above the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour). On the upside, the pair is now facing a major hurdle at 1.1580.
The next major resistance might be 1.1620. A close above 1.1620 could start another steady increase. In the stated case, the bulls could aim for a move to 1.1685.
Any further gains might open the door for a test of 1.1750. If there is a fresh decline, the pair might find bids near 1.1535. There is also a bullish trend line forming with support at 1.1535. The next major support could be near 1.1500 and the 100 simple moving average (red, 4-hour).
The main support might be 1.1460 and the 200 simple moving average (green, 4-hour). A downside break and close below 1.1460 might send the pair toward 1.1420. Any more losses could open the door for a test of 1.1350.
Looking at Gold, the bulls are active again, and they could aim for a move above the $4,440 and $4,450 resistance levels.
Upcoming Key Economic Events:
ECB’s Lane speech.
NY Empire State Manufacturing Index for August 2026 – Forecast 10.2, versus 15.6 previous.
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The Euro-Dollar is starting to look undervalued near 1.1570, with foreign exchange analysts at ING estimating short-term fair value at 1.1600-1.1650 and retaining a bullish bias. Latest — Exchange Rates:
Euro to Dollar (EUR/USD): 1.157032 (+0.32%)
Pound to Dollar (GBP/USD): 1.35335 (+0.32%)
Dollar to Yen (USD/JPY): 159.32142 (-0.07%)
The Euro to Dollar (EUR/USD) exchange rate ended the week around 1.1570 after pushing back towards the upper end of its recent range, but ING thinks the pair still looks slightly cheap.
The bank's short-term fair-value model puts EUR/USD in the 1.1600-1.1650 area, roughly 30-80 pips above Friday's close.
“Our models suggest EUR/USD’s short-term fair value sits in the 1.160-1.1650 area,” ING strategist Francesco Pesole said.
The main driver is the move in relative interest rates, with ING pointing to around 10 basis points of tightening in two-year swap spreads.
That is enough to keep the bank leaning bullish even after EUR/USD's recovery from July lows.
Image: EUR/USD performance over last week EUR/USD recovered sharply late in the week, reaching 1.1584 before closing around 1.1570 and near the upper end of its five-day range.
There is a catch.
ING is not yet convinced the Euro has the catalyst required to break decisively through 1.1600.
“That supports our positive bias on EUR/USD, even though we aren’t convinced a break above 1.160 is on the cards in the coming days unless communication from the Fed starts to surprise on the dovish side,” Pesole said.
That puts Federal Reserve communication back at the centre of the trade.
ING believes market conviction around further Fed tightening remains too strong and continues to favour Dollar downside, but says Fedspeak now offers the clearest route to a larger FX move.
The bank is particularly watching whether more centrist Fed officials begin to soften their hawkish tone ahead of the late-August Jackson Hole Symposium.
Near-Term EUR/USD Outlook: 1.1500 Support Is Doing Its Job The other side of ING's argument is increasingly visible on the chart.
EUR/USD fell as low as 1.1325 during the past three months, but the late-July recovery has carried the pair back above 1.15 and towards 1.16.
Image: Euro to Dollar exchange rate's 3-month chart EUR/USD has rebounded strongly from its July lows and is trading above its 20-day and 50-day moving averages, with 1.1600 now the next obvious hurdle.
“For now, EUR/USD bulls like us may be content with strengthening technical support around 1.1500,” ING said.
That level matters because it changes the character of the recent price action.
A few weeks ago, EUR/USD was struggling to hold the mid-1.13s. It is now testing the upper half of the 1.15 handle while ING's fair-value model argues the pair should be somewhat higher still.
This is not a call for an immediate breakout.
ING's view is more measured: 1.1500 is becoming a firmer floor, 1.1600 is the near-term hurdle, and a more dovish turn in Fed communication may be needed before the Euro can make the next leg higher.
On that basis, EUR/USD is not dramatically mispriced.
It is simply starting to look cheap.
Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.
The EUR/USD registers gains of over 0.32% as traders face key resistance at the 100-day Simple Moving Average (SMA) at 1.1567, as bulls eye the 1.1600 psychological figure. At the time of writing, the pair trades at 1.1564 after bouncing off daily lows of 1.1526.
EUR/USD Price Forecast: Technical OutlookThe EUR/USD market structure suggests that the downtrend remains intact. The successive lower highs and lower lows have been respected, but since July 30, when the pair reclaimed the 1.1500 area, the risk of a ‘bullish reversal’ has increased.
Although the pair topped around 1.1550-60, the Relative Strength Index (RSI) suggests bullish momentum is building. With that said, the EUR/USD might turn bullish if traders clear key resistance levels.
Upwards, the 200-day SMA at 1.1629 is the next area of interest. Once surpassed, the next cycle high pending is the May 29 high at 1.1685. If those two levels are removed, EUR/USD could be headed toward 1.1700, putting the April 17 high at 1.1849 into play ahead of the 1.1900 area.
On the flip side, if the shared currency drops below 1.1500, a move to the 50-day SMA at 1.1465 is on the cards. The next demand zone would be 1.1400.
EUR/USD Price Chart – Daily
EUR/USD daily chart Euro Price This week The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Japanese Yen.
USDEURGBPJPYCADAUDNZDCHFUSD-0.13%-0.36%1.02%-0.54%-0.28%0.07%0.66%EUR0.13%-0.24%1.11%-0.52%-0.22%0.10%0.69%GBP0.36%0.24%1.29%-0.27%0.02%0.34%0.92%JPY-1.02%-1.11%-1.29%-1.24%-0.95%-0.77%-0.15%CAD0.54%0.52%0.27%1.24%0.29%0.47%1.25%AUD0.28%0.22%-0.02%0.95%-0.29%0.32%0.88%NZD-0.07%-0.10%-0.34%0.77%-0.47%-0.32%0.57%CHF-0.66%-0.69%-0.92%0.15%-1.25%-0.88%-0.57% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Key Points:EUR/USD moved higher as traders focused on U.S. Retail Sales data. USD/CAD tested new lows as oil prices moved higher. USD/JPY climbed back towards the 159.50 level amid rising Treasury yields.
In this article:EUR/USD
+0.29%
EUR/USD ForecastGBP/USD
+0.31%
GBP/USD ForecastUSD/CAD
-0.37%
USD/CAD ForecastUSD/JPY
-0.04%
USD/JPY Forecast
U.S. Dollar Retreats As Retail Sales Miss Estimates
DXY 140826 4h Chart
U.S. Dollar Index is losing ground as traders focus on the disappointing Retail Sales report. The report indicated that Retail Sales decreased by -0.6% month-over-month in July, compared to analyst forecast of +0.1%.
Traders also had a chance to take a look at the Michigan Consumer Sentiment report. The report showed that Michigan Consumer Sentiment declined from 55.2 in July to 51.0 in August, compared to analyst consensus of 54.5.
The nearest support level for U.S. Dollar Index is located in the 99.25 – 99.40 range. In case U.S. Dollar Index manages to settle below the 99.25 level, it will move towards the next support level, which is located in the 98.60 – 98.75 range.
EUR/USD Tests New Highs As Traders Focus On U.S. Economic Data
EUR/USD 140826 4h Chart
EUR/USD gains ground as traders react to Wholesale Prices report from Germany. The report showed that Wholesale Prices increased by +0.2% month-over-month in July, compared to analyst forecast of +0.4%.
If EUR/USD stays above the 1.1550 level, it will head towards the nearest resistance, which is located in the 1.1600 – 1.1615 range. A successful test of this level will push EUR/USD towards the next resistance at 1.1685 – 1.1700.
GBP/USD Tests Resistance At 1.3550 – 1.3565
GBP/USD 140826 4h Chart
GBP/USD moves higher as traders focus on economic reports from the U.S. Traders bet that weak economic data will force the Fed to be more dovish.
Currently, GBP/USD is trying to settle above the resistance level at 1.3550 – 1.3565. In case GBP/USD manages to settle above the 1.3565 level, it will head towards the next resistance level, which is located in the 1.3635 – 1.3650 range. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.
USD/CAD Tests New Lows As Pullback Continues
USD/CAD 140826 4h Chart
USD/CAD pulled back as traders focused on rising precious metals markets and reacted to the weak Retail Sales report from the U.S. Gold climbed towards the $4400 level, while silver moved back towards the $65.00 level. Other commodity-related currencies were also moving higher in today’s trading session.
USD/CAD settled below the previous support at 1.3920 – 1.3935 and is trying to settle below the 1.3870 level. In case this attempt is successful, USD/CAD will head towards the next support level, which is located in the 1.3825 – 1.3840 range.
USD/JPY Climbs Back Towards The 159.50 Level
USD/JPY 140826 4h Chart
USD/JPY rebounded from session lows and moved back towards the key 159.50 level. Treasury yields are moving higher despite weak Retail Sales data, providing additional support to USD/JPY. The yield of 2-year Treasuries climbed above the 4.15% level, while the yield of 10-year Treasuries settled above 4.69%. Treasury yields moved higher as bond traders focused on rising oil prices.
If USD/JPY manages to settle above the resistance level at 159.50 – 160.00, it will head towards the next resistance at 161.50 – 162.00. It remains to be seen whether BoJ is ready to intervene in case USD/JPY climbs above the psychologically important 160.00 level.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
Scotiabank strategists Shaun Osborne and Eric Theoret report EUR/USD trading in the mid-1.15s with modest gains versus the US Dollar (USD), supported by euro area Gross Domestic Product (GDP) and a return to trade surplus. Recovering yield spreads underpin the Euro (EUR), with their narrow fair value estimate at 1.1641, above spot. Short-term technicals are described as bullish, with support near 1.1500 and resistance around 1.1580 and the 200-day moving average.
Fundamentals and technicals align higher"The EUR is entering Friday’s NA session with a 0.2% gain vs. the USD, pushing into the mid-1.15s while also underperforming most of the G10 currencies in an environment of broad-based USD weakness."
"The second euro area Q2 GDP release was in line with expectations, printing 0.4% Q/Q to deliver a 1.0% Y/Y pace of growth. The trade balance returned to a surplus in June, ending a short-lived deficit that emerged from March to May."
"Yield spreads are offering fundamental support and extending their latest recovery with a push through the mid-July high to reach levels last seen in mid-May. Our narrow fair value estimate based solely on the 2Y Germany-US yield spread has climbed to a fresh high of 1.1641, offering upside relative to spot."
"We see scope for additional sentiment and positioning-related gains, given that the options market continues to fade its premium for protection against EUR weakness while bearish CFTC data highlight vulnerability given the fundamental improvement in spreads."
"Bullish – the RSI is back above 60, suggesting renewed bullish momentum. The recent consolidation range has offered support at 1.1500 and resistance closer to 1.1580. We see broader support at the 50 day MA (1.1466), and additional resistance around the 200 day MA (1.1630). "
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The EUR/USD pair settled in the 1.1580 area marginally higher in the week, yet unable to find a clear path. The pair holds near its August peak at 1.1581, as demand for the US Dollar (USD) remains subdued amid poor employment figures and steady inflation.
Contributing to the lack of directional strength, the United States (US) and Iran remain in a stalemate, without attacking each other or negotiating a way out.
Middle East crisisAt this point, the key is that the Strait of Hormuz remains closed and both Tehran and Washington claim to have it under control. The truth is, traffic through the sea passage is severely disrupted, resulting in higher Oil prices and fears that higher energy prices will soon spill back into inflation.
US Treasury Secretary Scott Bessent has threatened Iran with economic isolation “like the world has never seen before,” as the US maintains its demand for Iran to drop all nuclear weapons. Tehran, on the other hand, demands sole control of the Strait of Hormuz, while claiming it will not end its fight in the Middle East until President Donald Trump is out of office in 2029.
Other than that, the Memorandum of Understanding (MoU) signed in June is set to expire on Sunday. And while some tit-for-tat fire took place and talks were interrupted, there were no major strikes that could fuel concerns. That may come to an end without the MoU in the way.
US data keeps Fed’s hike odds subduedThe macroeconomic calendar was pretty scarce in the past week, with one major exception: the US released the July Consumer Price Index (CPI). Annual inflation, as measured by the change in the CPI, declined to 3.4% in July from 3.5% in June, in line with market expectations. In fact, all figures matched expectations, with core annual CPI printing at 2.5%, down from 2.6% posted in June. The figures supported the case for an on-hold Federal Reserve (Fed) in September, limiting USD demand.
Other data showed that Retail Sales were up 5% in July, while the June reading was upwardly revised to 6.8%. Finally, the preliminary estimate of the August Michigan Consumer Sentiment Index contracted to 51 from the 55.2 posted in July. The same report showed inflation expectations on a 1-year perspective ticked higher, to 4.3% from 4.2%, while the 5-year view remained unchanged at 3.3%.
European slow macroeconomic growthThe Euro was unable to attract investors amid the lack of a fresh catalyst. On the one hand, Germany confirmed the Harmonized Index of Consumer Prices (HICP) at 2.8% YoY in July as previously estimated. On the other hand, the Euro area released the second estimate of the Q2 Gross Domestic Product (GDP), reporting quarterly growth at 0.4%.
The figures reaffirmed the market’s conviction that the European Central Bank (ECB) will hike the benchmark interest rate by 25 basis points (bps) in the upcoming September meeting. At the time of writing, hike odds stand at 90%, according to the ECB Watch tool.
What’s nextWar developments could be at the top of the market movers in the upcoming days, particularly if any party involved decides to resume attacks. And it's not just about the US or Iran. Israel, Saudi Arabia, Iraq and Oman are lately making it to the headlines amid rising tensions over the usage of the Strait of Hormuz.
A war escalation that pushes Oil prices further up will likely revive demand for the safe-haven USD, mostly because it would also push up Fed hike odds.
Data-wise, there’s little to take care of: Germany will publish the August ZEW Survey on Economic Sentiment, while ECB President Christine Lagarde will be on the wires on Wednesday, and the Federal Open Market Committee (FOMC) will release the Minutes of its July meeting. On Friday, S&P Global, alongside local banks, will publish the preliminary estimates of the August Purchasing Managers’ Indexes (PMIs) for European economies and the US.
EUR/USD Technical Outlook:
From a technical standpoint and according to the daily chart, EUR/USD trades at 1.1582. The pair holds is bullish. It advances above the 100-day Simple Moving Average (SMA) at 1.1568 and the 20-day SMA at 1.1482, but remains capped by the 200-day SMA at 1.1630. Momentum stays constructive, with the 14-period Relative Strength Index (RSI) indicator heading north at 63 and the 14-period Momentum indicator firmly positive above its midline, which suggests buyers still have the upper hand while the 200-day SMA acts as an inmediate ceiling at 1.1630.
In the weekly chart, EUR/USD is more neutral. The pair remains above the 20-, 100- and 200-week SMAs at 1.1569, 1.1321 and 1.1050 respectively, now advancing above the shorter one for the first time since last May. Still, the the Momentum indicator aims modestly lower in negative territory and a the RSI indicator hovers around 51 suggesting only subdued upside pressure rather than an aggressive bullish trend.
On the topside, initial resistance is located at the 200-day SMA at 1.1630, and a sustained break above this level would open the door to further gains intially towards the 1.1700 mark. On the downside, immediate support emerges at the 1.1560 region, followed by the more relevant 1.1470 price zone.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
EUR/USD rallies on Friday, erasing all the losses recorded earlier this week as broad-based weakness in the US Dollar (USD) lifts the Euro (EUR). At the time of writing, the pair trades around 1.1580 near its highest level since June 17.
The US Dollar weakens as the latest batch of US economic data tempers expectations of a near-term Federal Reserve (Fed) interest-rate hike. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades around 99.50, down 0.47% on the day.
US Retail Sales fell by 0.6% in July, missing expectations for a 0.1% increase and reversing the previous month’s 0.2% gain. Preliminary data from the University of Michigan (UoM) showed that the Consumer Sentiment Index fell to 51.0 in August from 55.2, while the Consumer Expectations Index dropped to 50.6 from 55.4.
The data follows this week’s Consumer Price Index (CPI) and Producer Price Index (PPI) reports, which showed that price pressures eased for a second consecutive month, suggesting that the inflationary impact of the recent energy shock is fading.
According to the CME FedWatch Tool, markets now see around a 70% chance that the Fed will keep interest rates unchanged in September, a sharp shift from earlier expectations of an increase.
However, inflation risks remain tilted to the upside as uncertainty over the reopening of the Strait of Hormuz keeps Oil prices elevated. The Michigan survey’s one-year inflation expectation edged up to 4.3% from 4.2%, while the five-year measure held steady at 3.3%.
On the Euro side, markets widely expect the European Central Bank (ECB) to raise interest rates in September, which would mark its second hike this year.
Economists at Commerzbank expect the ECB’s September move to bring the deposit rate to 2.5%, noting that at this level “a level would be reached that Governing Council members view as the upper limit of the neutral interest rate—one that neither stimulates nor slows the economy and leads to medium-term inflation.”
Looking further ahead, Commerzbank argues that “toward the end of 2027, the ECB is likely to lower interest rates again,” as “inflation should gradually decline over the course of the coming year and come close to reaching the inflation target.”
ECB FAQs The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
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Market news from the European morning session - 14 August 2026
Headlines:
Dollar nudges lower on the day amid mixed market moodBitcoin loses key $64,000 level: The important support levels BTC must hold nextBOJ reportedly set for a September rate hike, eyes faster pace of tighteningGerman wholesale prices bounce back in July as energy tax cut lapsesFrench inflation accelerates again in July, core prices move up as wellSwiss economy estimated to post quarterly growth of 1.5% in the second quarterChina new bank loans contract again in July, the second time this yearMarkets:
WTI crude oil up 0.5% to $81.64NZD leads, USD lags on the dayGold up 0.3% to $4,362S&P 500 futures up 0.1%, Nasdaq futures up 0.2%US 10-year yields up 0.3 bps to 4.645%Bitcoin down 0.8% to $62,829There's not all too much in it as we get into the final stretch of the week.
The market mood is fairly mixed, with the dollar sitting lower while oil prices and bond yields are just a touch higher on the day.
There are no fresh developments on the US-Iran conflict, with the Strait of Hormuz still in de facto closure after Iran threatened more ships again - this time being UAE oil vessels.
WTI crude sits higher by 0.5% to $81.64 and looks poised to end the week with gains well over 5%. Meanwhile, bond yields also nudged a little higher early on but is now moving back down a little. 10-year yields in the US are little changed now at 4.645% with the earlier high touching 4.665%.
Even so, the dollar is seen being offered in European morning trade. It was one-way traffic with the greenback losing ground across the board. EUR/USD is up 0.3% to 1.1567 in retesting the 100-day moving average once again. Meanwhile, USD/JPY is down 0.2% to close in on the 159.00 mark on the day.
In other markets, European indices are lightly changed for the most part while US futures are holding a marginal advance on the day. There's not a whole lot in it but Wall Street will be hoping to follow up from the record close in the S&P 500 yesterday.
Besides that, gold is up 0.3% to $4,362 after erasing early losses with the fall back earlier touching a low of $4,311.
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EUR/USD stood at 1.1537 on Friday, with markets continuing to digest incoming economic data. Soft US inflation figures have reduced expectations of a Federal Reserve rate hike in September.
Data released on Thursday showed that producer prices were flat in July. Together with the benign CPI report, this suggests that inflationary pressures are not yet accelerating.
Markets are now pricing in a 35% probability of a 25-basis-point Fed rate hike in September, down from 55% a week earlier. Moderate inflation reduces the need for near-term policy tightening.
Recent data also suggest that the initial inflationary impact of the Middle East conflict and high energy prices may be easing. However, uncertainty surrounding a potential agreement and the reopening of the Strait of Hormuz continues to pose risks to the inflation outlook.
Technical Analysis
On the H4 chart of EUR/USD, the market continues to trade within a consolidation range, currently extending between 1.1511 and 1.1545, with the upper boundary being tested from below. The consolidation range around the 1.1546 level is nearing completion. An upside breakout would suggest a corrective move towards 1.1570, followed by a decline to 1.1492. A direct downside breakout would open the way for a move towards 1.1492, with scope for the trend to extend to 1.1400. The MACD indicator supports this scenario, with its signal line below zero and pointing downwards, reflecting continued bearish momentum.
On the H1 chart, the market has completed an upward move to 1.1543. A consolidation range is currently forming below this level. A move lower towards 1.1492 is expected, followed by a move higher to 1.1536, and then a continuation of the downward trend to 1.1400, with scope for a further decline to 1.1330. The Stochastic oscillator confirms this scenario, with its signal line below 80 and trending downward towards 20, indicating increasing short-term downside pressure.
Conclusion EUR/USD remains range-bound as markets assess the implications of softer US inflation data, which have reduced the likelihood of a September Fed rate hike from 55% to 35%. Producer prices were flat in July, adding to evidence that inflationary pressures are moderating. The initial impact of the Middle East conflict and high energy prices appears to be fading. However, uncertainty over a potential US–Iran agreement and the reopening of the Strait of Hormuz still poses risks. Technically, the pair may see a short-term corrective move towards 1.1570 before resuming its broader bearish trend towards 1.1492 and potentially 1.1400. The near-term direction will depend on further US economic data and geopolitical developments.
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The Euro (EUR) trades 0.17% higher at around 1.1550 against the US Dollar (USD) during the European trading session on Friday. The major currency pair gains as the Euro rises due to firm expectations that the European Central Bank (ECB) will raise interest rates in the policy meeting in September.
According to a Reuters poll, 57 of 69 economists said that they see the ECB hiking its deposit rates by 25 basis points (bps) to 2.50% in September.
Market experts also seem confident about the ECB tightening its monetary conditions in September to tame hot inflationary pressures.
ECB seen hiking again as other central banks face tougher choices
Analysts at HSBC highlight a growing divergence in the global policy outlook, noting that "although we expect the European Central Bank (ECB) to now deliver another rate rise in September, for other major central banks it is a much tougher balancing act." The bank contrasts the ECB’s readiness to tighten further with a more cautious stance elsewhere, underscoring the challenge facing policymakers outside the Eurozone as they weigh inflation risks against the need to keep policy on hold.
Meanwhile, traders pricing out the possibility of an interest rate hike by the Federal Reserve (Fed) in September is dragging the US Dollar.
Fed hike odds slip as softer inflation data drives dovish repricing
Analysts at Deutsche Bank highlight that the softer inflation backdrop has prompted a notable dovish shift in Fed expectations, with “pricing for a September Fed hike fell to just 35% by the close, down from above 50% on the morning of Wednesday’s CPI release.” They add that the “downside PPI surprise led to an immediate reaction in pricing for the next Fed meeting,” noting that “the probability of a September hike had been at 40% right before the release, but was down to 35% by the close.”
EUR/USD Technical Analysis
EUR/USD trades at around 1.1550, holding the downward-sloping trendline at around 1.1540, but is capped by the 100-day simple moving average (SMA), which is at 1.1567.
The Relative Strength Index (14) around 60 hints at firm bullish momentum, but this improving sentiment is yet to overcome the overhead SMA that continues to act as a ceiling.
On the downside, initial support is seen near the former trend-line break point at 1.1510, where the market previously cleared a descending resistance line, now acting as a structural floor. On the topside, the 100-day SMA at 1.1567 forms the first resistance barrier, and a decisive close above this level would be needed to ease the current bearish bias and open the way to a more sustained recovery. Looking up, the major barricade of the pair would be the round-level at 1.1600.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
ECB FAQs The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
EUR/USD stood at 1.1537 on Friday, with markets continuing to digest incoming economic data. Soft US inflation figures have reduced expectations of a Federal Reserve rate hike in September.
Data released on Thursday showed that producer prices were flat in July. Together with the benign CPI report, this suggests that inflationary pressures are not yet accelerating.
Markets are now pricing in a 35% probability of a 25-basis-point Fed rate hike in September, down from 55% a week earlier. Moderate inflation reduces the need for near-term policy tightening.
Recent data also suggest that the initial inflationary impact of the Middle East conflict and high energy prices may be easing. However, uncertainty surrounding a potential agreement and the reopening of the Strait of Hormuz continues to pose risks to the inflation outlook.
Technical analysis
On the H4 chart of EUR/USD, the market continues to trade within a consolidation range, currently extending between 1.1511 and 1.1545, with the upper boundary being tested from below. The consolidation range around the 1.1546 level is nearing completion. An upside breakout would suggest a corrective move towards 1.1570, followed by a decline to 1.1492. A direct downside breakout would open the way for a move towards 1.1492, with scope for the trend to extend to 1.1400. The MACD indicator supports this scenario, with its signal line below zero and pointing downwards, reflecting continued bearish momentum.
On the H1 chart, the market has completed an upward move to 1.1543. A consolidation range is currently forming below this level. A move lower towards 1.1492 is expected, followed by a move higher to 1.1536, and then a continuation of the downward trend to 1.1400, with scope for a further decline to 1.1330. The Stochastic oscillator confirms this scenario, with its signal line below 80 and trending downward towards 20, indicating increasing short-term downside pressure.
ConclusionEUR/USD remains range-bound as markets assess the implications of softer US inflation data, which have reduced the likelihood of a September Fed rate hike from 55% to 35%. Producer prices were flat in July, adding to evidence that inflationary pressures are moderating. The initial impact of the Middle East conflict and high energy prices appears to be fading. However, uncertainty over a potential US–Iran agreement and the reopening of the Strait of Hormuz still poses risks. Technically, the pair may see a short-term corrective move towards 1.1570 before resuming its broader bearish trend towards 1.1492 and potentially 1.1400. The near-term direction will depend on further US economic data and geopolitical developments.
Post-CPI summer trading conditions continue to keep FX volatility subdued, leaving EUR/USD largely anchored. Still, our models are pointing to some short-term undervaluation in the pair, supporting our moderately bullish bias for coming weeks. Gulf headlines remain a marginal factor for FX, more visible in some relative value trades than USD crosses.
USD: Looking for a shift in FedspeakThe post-CPI midsummer environment is understandably weighing on FX vols. We argued yesterday, that this could remain the norm for at least the next couple of weeks. At the same time, we retain a preference for dollar downside, as we still believe market conviction around further tightening by the Federal Reserve is too strong.
For now, Fedspeak offers the clearest potential catalyst for market moves. There is still considerable uncertainty over the message that could emerge from the late-August Jackson Hole Symposium, particularly after a CPI report that leaned dovish without delivering a definitive signal. Yesterday, we heard from Beth Hammack, who voted for a hike and continued to make the case for tightening, but also from Tom Barkin, who raised some doubts about the need for higher rates despite not being considered a dovish voice within the FOMC. Let’s see if more centrist members start to soften their hawkish tone.
Today’s US calendar includes July retail sales, expected at a modest 0.1% month-on-month, and the University of Michigan surveys, which are expected to show little change from August. These second-tier releases would likely need to deliver significant surprises to trigger a meaningful dollar reaction.
Meanwhile, headline fatigue surrounding the Middle East remains elevated. US-Iran negotiations appear to be at a stalemate, but Brent declined yesterday, providing some support for global bonds. The bar for the dollar to rebuild a strong direct relationship with oil prices remains quite high, and the impact of developments in the Gulf may remain more visible in G10 relative-value trades, where pairs such as NOK/SEK and AUD/NZD continue to track the energy story quite closely.
EUR: Showing some undervaluationOur models suggest EUR/USD’s short-term fair value sits in the 1.160-1.1650 area. That’s primarily on the back of the c.10bp tightening in two-year swap rate spreads, which retain a significantly higher beta than other drivers.
That supports our positive bias on EUR/USD, even though we aren’t convinced a break above 1.160 is on the cards in the coming days unless communication from the Fed starts to surprise on the dovish side. For now, EUR/USD bulls like us may be content with strengthening technical support around 1.1500.
In the eurozone, the second release of 2Q GDP will be released today, with no expectations for meaningful changes to the advance 0.4% quarter-on-quarter print.
JPY: BoJ policy story having little effect so farDespite some sharp moves in Japanese money markets this week, the yen is failing to find any lasting support. Here, the big story is that the Japanese government might be more tolerant of a faster tightening cycle by the Bank of Japan. The prior assumption had been that a government focusing on growth would only allow the BoJ one hike every six months. The suggestion now is that Tokyo has elevated FX as a policy priority and wants to ensure that the first joint intervention with the US to buy the yen since 1998 is a success.
Markets now price close to a 75% chance that the BoJ hikes 25bp in September. That has seen two-year US: Japan swap differentials narrow nearly 40bp since mid-July. That should be weighing on USD/JPY. The fact that it is not may owe to benign conditions that continue to favour the yen-funded carry trade. That said, the risks to funding in yen are squarely increasing, and if we are right with our call for unchanged Fed rates in September, USD/JPY could well be trading back below 158. And to play independent yen strength in the interim, expect a lot more focus on short CHF/JPY positions.
CEE: Central bank signals take centre stageTurkey’s central bank raised its inflation forecast to 28% from 26%, bringing it closer to market expectations and our own forecast. It also signalled that the effective policy stance is likely to normalise as funding shifts from the overnight lending facility back to the repo window. We had expected this move in September, but the case for an earlier shift in August has strengthened. Today, Turkey will publish August inflation expectations, which have risen somewhat since the start of the US-Iran conflict.
Elsewhere, Romania releases 2Q GDP figures today, though yesterday’s press conference by the National Bank of Romania governor was the main focus. While the central bank lifted its year-end inflation forecast to 6.1%, the governor said discussions on rate cuts could begin early next year. This matches our forecast, but the firm signal may still surprise markets.
In the Czech Republic, the Czech National Bank will publish minutes from last week’s meeting, when rates were left unchanged at 3.75%. The minutes may reveal a more dovish discussion than markets expect. The CNB will also release its full inflation report.
ING FX Strategist Francesco Pesole highlights that EUR/USD appears modestly undervalued, with short-term fair value estimated around 1.160–1.1650 based on swap spreads. He maintains a positive bias on EUR/USD but doubts a near-term break above 1.160 without a dovish surprise from the Federal Reserve. For now, he sees strengthening technical support around 1.1500, while Eurozone GDP revisions are expected to be minor.
Fair value signals and key levels"Our models suggest EUR/USD’s short-term fair value sits in the 1.160-1.1650 area. That’s primarily on the back of the c.10bp tightening in two-year swap rate spreads, which retain a significantly higher beta than other drivers."
"That supports our positive bias on EUR/USD, even though we aren’t convinced a break above 1.160 is on the cards in the coming days unless communication from the Fed starts to surprise on the dovish side. For now, EUR/USD bulls like us may be content with strengthening technical support around 1.1500."
"In the eurozone, the second release of 2Q GDP will be released today, with no expectations for meaningful changes to the advance 0.4% quarter-on-quarter print. "
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Key Points:Softer U.S. CPI and PPI have strengthened expectations for a less restrictive Federal Reserve policy outlook.EUR/USD is testing major trendline resistance near 1.1569, with a breakout potentially exposing 1.1620 and 1.1674.UK GDP expanded 0.4% quarter-on-quarter, giving the Bank of England more room to focus on persistent inflation risks.DXY continues defending the critical 99.40 trendline support but needs to reclaim 100.36 to strengthen its recovery.GBP/USD remains constructive above its rising trendline, though buyers need to clear 1.3515 to confirm another bullish leg.
In this article:GBP/USD
+0.13%
GBP/USD ForecastEUR/USD
+0.11%
EUR/USD ForecastUS Dollar News: Fed Rate Cut Bets Rise as Euro and Pound Navigate Domestic Risks As of August 14, the U.S. dollar is facing pressure due to changing expectations for the Fed after release of slower inflation data provided further evidence of a case for increased easing. The July report for the Producer Price Index (PPI) indicated that inflation for wholesale goods was unchanged compared to the month prior, and core PPI also increased by 0.2% after the latest CPI report indicated a slower-than-expected rise. The data released further eased the concerns for inflation rising again and suggested that the Fed was likely to begin cutting rates in September.
For the Fed, the labor market is still the most important factor. The recent data for July hiring indicated slower hiring, and more of a need to strike a balance between inflation concerns and an economy likely to be slowing. However, Fed officials reassure the market that the inflation data is still well above the Fed’s target for inflation being set at 2%.
The euro is benefitting from the slower expectations of Fed rate movements, but is also dealing with domestic challenges. The European Central Bank is still maintaining a cautious stance by keeping policy the same as they assess the impact of the disruptions to Middle East energy supply and inflation as well as consumer demand. Recent reports of the activity of the euro zone have shown signs of stabilizing, but still have the potential to grow at a lower level due to slow demand and geopolitical challenges.
Sterling faces considerable pressure as the UK’s second-quarter GDP showed a 0.4% quarterly rise, following stronger early quarter growth. The data published reflects the economy’s resilience, especially as price rises for energy have been high and global uncertainties remain. Still, the Bank of England must continue to balance inflation and the threats caused by the increasing growth of nominal wages and energy price rises.
For currency markets, the most important factor continues to be the difference in interest rates and the expected changes. Easing US inflation has lowered expectations of further rate hikes by the FOMC, and the euro and pound are now being evaluated on whether their respective domestic economies can continue to grow without re-igniting inflation.
U.S. Dollar Index Technical Analysis: DXY Holds 99.40 Support as Bulls Attempt Recovery Dollar Index Price Chart – Source: Tradingview The U.S. Dollar Index is hovering around 99.95, as it stabilized above the significant 99.40 support area. The daily chart depicts DXY still as a sell into the 101.60 area; however, bulls defend the rising trendline which has been a key topside recovering support line since the March lows. The index is currently trading sideways between resistance and support, potentially forming a base and accumulating ahead of a new strong trending move.
Price is just above the 100.00 level, with the 50-day EMA at 100.29 and acting as resistance. The 100-day EMA at 99.91 is currently acting as support and along with the current price makes this area of the market very important. RSI at 42 reflects zero momentum and a low level, but is also neutral and showing signs of the potential beginning of a new recovery if buyers show strength.
Breaking above 100.36 would provide a strong outlook for further recovery to the 100.82 and also 101.61 levels. Below the 99.40 support would lead to a sell off at 98.75 and possibly 98.18. The current outlook maintains a bullish recovery strategy, but is cautious as long as the rising trendline is intact.
GBP/USD Price Chart – Source: Tradingview GBP/USD is at 1.3487 after a highly bullish response to the 1.3270 lows. An ascending trendline is currently following the upward structure, with price having trouble breaching the 1.3515 resistance area, which has led to sideways movement in this area.
The 50-day EMA is at 1.3477 and the 100-day EMA is at 1.3446, which puts this pair slightly in favor of bulls. RSI is at 48 and shows that this pair may be losing some of its bullish momentum.
Breaching 1.3515 would show an upward movement with targets of 1.3545 and 1.3586. 1.3437 and 1.3400 offer support. The overall structure is bullish as long as price remains above the trendline. For bulls to resume their momentum, 1.3515 is an important level to take out.
EUR/USD Technical Analysis: Euro Faces Trendline Resistance Near 1.1570 EUR/USD Price Chart – Source: Tradingview The EUR/USD currency cross currently trades around 1.1530. It has recovered from the 1.1350 July lows, but it’s facing a downward trendline and a resistance zone from the early year highs. The daily chart shows an attempt at recovery, but buyers will need a clear break above the trendline and the 1.1569 level to continue the trend higher.
The cross currently is trading above the 1.1499 50 day moving average and the 1.1541 100 day moving average. This indicates short term momentum is positive, but vague. Further, RSI is at 57, positive but not overbought.
A close above 1.1569 should confirm the breakout and may allow for a move toward 1.1620 and 1.1674. In the opposite direction, the first support is at 1.1500 and falls at 1.1455 and 1.1357. The cross is currently at a pivotal point, and the next move is likely based on if buyers break the long-term downtrend line or if sellers hold the current resistance.
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U.S. Dollar Is Losing Some Ground After PPI Report: Analysis For EUR/USD, GBP/USD, USD/CAD, USD/JPYShort-term Forex Movements Point to a Softening US Dollar early on ThursdayEUR/USD, Copper, and FTSE 100 Forecast: US PPI Data Threats Loom LargeAbout the Author
Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that EUR/USD is consolidating after a brief spike, with the pair expected to trade intraday in a slightly higher 1.1515–1.1550 range as the underlying tone firms. Over 1–3 weeks, they judge the Euro to be in a range-trading phase between 1.1480 and 1.1580, while a medium-term rebound needs a break above 1.1560/1.1565.
Euro consolidates inside defined ranges"24-HOUR VIEW: Two days ago, EUR spiked to a high of 1.1562 and then pulled back sharply to close slightly lower at 1.1524. Yesterday, when EUR was at 1.1525, we stated that “further pullback is not ruled out, but given that downward momentum has not increased significantly, any decline is likely to be contained within a 1.1510/1.1545 range.” Our view turned out to be correct, as EUR dipped to 1.1510, rebounded to 1.1545 before settling at 1.1527 (+0.03%). Today, we continue to expect EUR to trade in a range, but the slightly firmer underlying tone suggests it is likely to trade within a higher range of 1.1515/1.1550."
"1-3 WEEKS VIEW: Our update from yesterday (13 Aug, spot at 1.1525) remains valid. As highlighted, EUR “appears to have entered a range-trading phase, and for the time being, we expect it to trade within a 1.1480/1.1580 range."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The EUR/USD pair gains ground to near 1.1535 during the early Asian session on Friday. The US Dollar (USD) softens against the Euro (EUR) following a softer-than-expected US inflation report. The US July Retail Sales data will take center stage later on Friday.
Wholesale costs for goods and services in the United States (US) were flat in July, according to the Bureau of Labor Statistics on Thursday. This figure followed a revised 0.1% decline in June and cooled by more than the expected 0.2%. This report added to evidence that inflationary pressure is gradually easing after Wednesday's Consumer Price Index (CPI) data, weighing on the Greenback.
Excluding food and energy, the core Producer Price Index (PPI) rose 0.2%, below the market consensus of a 0.3% gain. On an annual basis, the headline PPI climbed 4.7% YoY in July, while the core PPI rose 4.2% YoY during the same period.
Markets are now pricing a 34.8% probability of a US rate hike at the September meeting, down from 40% immediately after the PPI data, according to the CME FedWatch Tool.
Across the pond, the European Central Bank (ECB) is expected to raise interest rates by 25 basis points (bps) at its September monetary policy meeting. ECB President Christine Lagarde warned last month that renewed Middle East hostilities and the resultant rebound in oil prices pose upside risk to the Eurozone inflation outlook.
Dollar caught between fading Fed hike bets and Hormuz-related safe haven supportStrategists at Rabobank highlight the conflicting forces currently shaping the USD outlook. They argue that “if Fed rate hike speculation continues to be pared back, in line with RaboResearch’s view, the USD will be exposed to potential downside pressures.” However, they also stress that “the uncertainties regarding the re-opening of the Strait of Hormuz remain a USD supportive factor,” noting that at the start of the Iran war “the market was positioned short of USDs,” leaving the Dollar particularly sensitive to shifts in geopolitical risk and safe haven demand.
(This story was corrected on August 14 at 00:55 GMT to say, in the first bullet point, that “EUR/USD gains ground to around 1.1535 in Friday’s early Asian session, not European session.)
Technical Analysis: EUR/USD maintains a negative outlook in the near termIn the daily chart, EUR/USD keeps a mildly bearish tone as it holds beneath the 100-day moving average (MA) and the upper Bollinger Band. Price remains supported by the middle Bollinger Band and a 20-day simple moving average, while the Relative Strength Index (14) at 58.3 shows improving but not overbought momentum, hinting at a corrective bounce that is still capped by overhead trend levels.
On the topside, initial resistance is seen at the 100-day MA at 1.1565, followed by the upper Bollinger Band at 1.1620, a break above which would be needed to ease the current downside bias. On the downside, immediate support emerges at the middle Bollinger Band near 1.1480, with a deeper floor aligning at the lower Bollinger Band around 1.1340, where selling pressure could pause if bears extend control.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Euro-Dollar is likely to stay volatile around 1.15-1.16 through the coming months, with Rabobank seeing fading Fed hike bets offset by Dollar safe-haven demand. Foreign exchange analysts at Rabobank have raised its one-month Euro to Dollar forecast to 1.15 from 1.14, but still see little prospect of a clean breakout from the pair's recent range.
The Euro to US Dollar (EUR/USD) exchange rate was trading around 1.1529 late on Thursday, close to where it began August.
The pair has spent the past 48 hours between roughly 1.1514 and 1.1562, with the latest price towards the lower third of that range.
Image: EUR/USD 48h chart EUR/USD has struggled to sustain moves above 1.1550, with price action remaining contained inside a relatively narrow 48-hour range.
The US Dollar side of the equation remains complicated.
Rabobank argues that the traditional inverse relationship between oil and the US currency has weakened as the US has become a major energy exporter.
That shift helped the Dollar recover some of its safe-haven appeal when the Iran war began.
More recently, however, interest-rate expectations have taken over as the more important driver.
Rabobank said the earlier oil-Dollar relationship “appeared to break down in June”, adding that this was “likely linked to a run up in market speculation regarding the prospects of Fed rate hikes”.
Those expectations have since softened.
July US CPI matched forecasts, but the market still pared back some expectations for another Federal Reserve rate increase.
The softer payrolls report released beforehand also shaped the reaction, with weaker employment reducing concern over second-round inflation pressures.
“If Fed rate hike speculation continues to be pared back, in line with RaboResearch’s view, the USD will be exposed to potential downside pressures,” the bank said.
That is not quite the same as an outright bearish Dollar call.
Rabobank still sees uncertainty surrounding the Strait of Hormuz as an important source of USD support.
It argues that as long as shipping remains curtailed, the Dollar should retain a safe-haven premium, while the Eurozone remains more vulnerable to the growth and inflation consequences of expensive energy.
“For as long as shipping through the Strait of Hormuz is curtailed, the USD is likely to retain a safe haven premium, supported by the US’s energy exporter status,” Rabobank said.
EUR/USD Outlook: Range First, Breakout Later? The bank therefore expects two competing forces to keep EUR/USD unsettled rather than drive a sustained directional move.
Lower Fed hike expectations favour a softer Dollar. Energy and geopolitical risks work the other way, particularly because they make investors less willing to rebuild large Euro positions.
Rabobank concludes that “choppy range trading” should dominate through the rest of 2026, with only a modest medium-term upward bias.
Its one-month EUR/USD forecast has been lifted to 1.15 from 1.14, while the bank expects the 1.15-1.16 area to dominate on a three-to-six-month view.
Image: The Euro to Dollar exchange rate sentiment survey - 2026, 2027, 2028 The broader bank consensus becomes progressively more Euro-positive through 2027, although the forecast range widens substantially further out.
That makes Rabobank noticeably restrained relative to the longer-run consensus.
The bank is not ruling out further Euro gains, but neither falling Fed expectations nor current Dollar weakness are enough to persuade it that EUR/USD is ready for a sustained break higher.
For the time being, 1.15-1.16 is less a target than the battleground.
Key Points:EUR/USD moved higher as traders focused on U.S. economic reports. USD/CAD declined towards the support at 1.3920 - 1.3935 despite the pullback in precious metals markets. USD/JPY remained stuck near the 159.50 level.
In this article:EUR/USD
+0.01%
EUR/USD ForecastGBP/USD
-0.11%
GBP/USD ForecastUSD/CAD
-0.07%
USD/CAD ForecastUSD/JPY
+0.09%
USD/JPY Forecast
U.S. Dollar Is Losing Ground As Traders Focus On Producer Prices Data
DXY 130826 4h Chart U.S. Dollar Index continues its attempts to settle above the resistance level at 99.85 – 100.00 as traders focus on Producer Prices report.
The report indicated that PPI was unchanged on a month-over-month basis in July, compared to analyst forecast of +0.2%. Core PPI increased by +0.2%, compared to analyst forecast os +0.3%.
Today, traders also had a chance to take a look at the Initial Jobless Claims report. The report showed that 209,000 Americans filed for unemployment benefits in a week, compared to analyst forecast of 202,000.
In case U.S. Dollar Index manages to settle above the 100.00 level, it will head towards the next resistance level, which is located in the 100.50 – 100.65 range.
EUR/USD Moved Higher As Euro Area Industrial Production Beat Estimates EUR/USD 130826 4h Chart EUR/USD gained some ground as traders focused on the Euro Area Industrial Production report. The report showed that Industrial Production was unchanged in June, compared to analyst consensus of -0.1%.
The nearest support level for EUR/USD is located in the 1.1510 – 1.1525 range. In case EUR/USD manages to settle below the 1.1510 level, it will head towards the next support at 1.1435 – 1.1450.
GBP/USD Moved Lower Despite Strong GDP Data GBP/USD 130826 4h Chart GBP/USD pulled back despite the better-than-expected GDP Growth Rate report from the UK. The report indicated that UK GDP Growth Rate was +1.2% in the second quarter, compared to anlayst forecast of +1.1%.
Traders also focused on the Industrial Production and Manufacturing Production reports. Industrial Production declined by -0.2% month-over-month in june, compared to anlayst forecast of +0.1%. Manufacturing Production decreased by -0.5%, while anlaysts expected that it would decline by -0.2%.
A successful test of the support level at 1.3465 – 1.3480 will open the way to the test of the next support at 1.3335 – 1.3350. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.
USD/CAD Remained Stuck Near Support At 1.3920 – 1.3935 USD/CAD 130826 4h Chart USD/CAD moved away from session highs despite the pullback in precious metals markets. Gold declined towards the $4350 level, while silver settled back below $65.00. Other commodity-related currencies moved lower in today’s trading session.
Currently, USD/CAD is trying to settle back below the support level at 1.3920 – 1.3935. In case USD/CAD manages to settle below the 1.3920 level, it will head towards the next support level at 1.3825 – 1.3840.
USD/JPY Settled Near The 159.50 Level USD/JPY 130826 4h Chart USD/JPY remains stuck below the key resistance level at 159.50 – 160.00 as traders ignored the pullback in Treasury yields. The yield of 2-year Treasuries declined below the 4.15% level, while the yield of 10-year Treasuries settled below 4.65%.
Analysts expect that BoJ will raise rates at the next meeting in September, but these expectations do not provide support to the Japanese currency.
If USD/JPY moves above the 160.00 level, it will gain additional upside momentum and head towards the resistance level at 161.50 – 162.00. The key question is whether BoJ is ready to intervene again in case USD/JPY climbs above the psychologically important 160.00 level.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
EUR/USD holds modest gains on Thursday as softer-than-expected US Producer Price Index (PPI) data fails to trigger a strong reaction in the pair. At the time of writing, EUR/USD trades around 1.1537 after recovering from an intraday low of 1.1511, its lowest level in more than a week.
Data released by the US Bureau of Labor Statistics showed that the headline PPI was unchanged in July after falling by 0.1% in June, while the annual rate eased to 4.7% from 5.5%. Core PPI rose by 0.2% MoM, down from 0.4%, while the annual rate slowed to 4.2% from 4.7%.
The report follows Wednesday’s broadly in-line Consumer Price Index (CPI) data, which showed both headline and core inflation easing on an annual basis. Together with the weaker-than-expected July Nonfarm Payrolls (NFP) report, the latest inflation figures have dampened expectations for a Federal Reserve (Fed) interest-rate hike.
According to the CME FedWatch Tool, markets now assign a 32% probability of a September rate hike, down from 55% a week ago. The repricing weighs on the US Dollar Index (DXY), which retreats below the 100 psychological mark after touching a two-week high earlier in the day.
US Treasury yields are also falling across the curve. The 2-year yield, which is particularly sensitive to expectations for Fed policy, trades around 4.14%, its lowest level since July 17.
However, the pair’s muted response suggests traders are reluctant to build large positions as elevated energy prices and the lack of progress toward reopening the Strait of Hormuz keep upside inflation risks in place.
Cleveland Fed President Beth Hammack said on Thursday that the latest two inflation reports were “welcome news,” although she was not confident that the progress would continue. She added that the labour market is stable, while inflation caused by supply shocks has proved more persistent. “My view is we need to act now,” Hammack said.
While expectations for a September Fed rate hike have eased, markets still see the ECB raising rates next month. A Reuters poll conducted from August 10 to 13 showed that 57 of 69 economists expect the ECB to raise its deposit rate by 25 basis points (bps) to 2.50% in September.
Euro Price Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD-0.16%-0.11%-0.22%0.00%-0.02%0.07%-0.26%EUR0.16%0.05%-0.07%0.12%0.14%0.21%-0.11%GBP0.11%-0.05%-0.11%0.08%0.10%0.16%-0.17%JPY0.22%0.07%0.11%0.21%0.21%0.25%-0.05%CAD0.00%-0.12%-0.08%-0.21%-0.00%0.07%-0.27%AUD0.02%-0.14%-0.10%-0.21%0.00%0.07%-0.26%NZD-0.07%-0.21%-0.16%-0.25%-0.07%-0.07%-0.30%CHF0.26%0.11%0.17%0.05%0.27%0.26%0.30% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Rabobank's Senior FX Strategist Jane Foley discusses EUR/USD dynamics in light of shifting Fed rate hike expectations and Oil-related safe haven flows into the Dollar. Foley expects choppy range trading in EUR/USD with a modest medium-term upward bias, highlighting Eurozone vulnerability as an energy importer. Rabobank's updated forecasts see EUR/USD around 1.15 in one month and 1.15–1.16 over 3–6 months.
Range-bound pair with mild upside bias"While oil and the DXY dollar index largely moved in the same direction from late January and into the spring, this appeared to break down in June. In our view, this was likely linked to a run up in market speculation regarding the prospects of Fed rate hikes in late spring, which appeared to take over from safe haven demand as the primary source of USD support in this period. Fed rate hike speculation has recently suffered a setback on the back of recent US data releases."
"Even though the July US CPI inflation data was in line with expectations, the market slightly pared back its expectations for a Fed rate hike. In line with this the DXY dollar index weakened a little on the news, although it subsequently shifted back towards the top end of its dull August range. The release of softer than expected US payrolls data last week likely provided a filter through which many investors judged yesterday’s US CPI inflation release, since a softer labour market will reduce the risk of second round price effects."
"If Fed rate hike speculation continues to be pared back, in line with RaboResearch’s view, the USD will be exposed to potential downside pressures. That said, the uncertainties regarding the re-opening of the Strait of Hormuz remain a USD supportive factor. At the start of the Iran war, the market was positioned short of USDs."
"By contrast, in these circumstances we would expect the market to remain wary of rebuilding long EUR positions. This view stems from the expectation that the Eurozone is more vulnerable to growth and inflation headwinds derived from its stance as an energy importer. Thus, while we see scope for some downside potential for the USD coming from a reduction in Fed rate hike expectations, we expect these to be contained by safe haven demand, until further clarity regarding the Strait of Hormuz emerges. Consequently, we expect choppy range trading to dominate EUR/USD through the rest of the year."
"We continue to favour choppy range trading in EUR/USD in the months ahead with a modest medium term upward bias. We have pushed up our 1-month forecast to EUR/USD1.15 from 1.14 and expect the 1.15-1.16 range to dominate on a 3-to-6-month view."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
It's on to Jackson Hole next..Dollar stays more muted so far today amid lack of any post-CPI momentumGold fails to find that additional spark from US inflation dataUK Q2 preliminary GDP +0.4% vs +0.4% q/q expectedUK economy posts unexpected growth in June on stronger services sector showingSpain inflation nudges higher in July as both headline and core prices push upMarkets:
WTI crude oil down 2% to $81.58CHF leads, NZD lags on the dayEuropean equities higher; S&P 500 futures up 0.2%Gold down 0.4% to $4,388US 10-year yields down 1.7 bps to 4.675%Bitcoin down 0.2% to $63,387The US CPI report for July was rather benign and that's not giving market players all too much to work with as we get into the second half of the week.
The dollar recoverd from overnight lows late yesterday before trading rather sideways in European morning trade today. EUR/USD is keeping in a narrow range, up just 0.1% to 1.1535. Meanwhile, USD/JPY remains little changed at around 159.20-30 levels for the most part.
Looking to geopolitical developments, the US-Iran conflict continues to see little progress in general. As such, the broader market mood remains tentative at best even if oil prices are trading down today. WTI crude is lower by 2% to $81.58 currently. Meanwhile, bond yields are also off the highs with 10-year Treasury yields down 1.7 bps to 4.675% today.
Still, it's all not hinting at much besides a bit of a breather in the market mood in awaiting further headlines and developments.
Elsewhere, equities remain steady with some modest gains in European stocks while US futures are pushing a little higher on the day. Wall Street was able to keep light gains after the inflation data yesterday and are seen just a little higher today as well - at least for now.
Besides that, gold is falling off from its Asia highs and is down 0.4% to $4,388 as buyers continue to try and push for a firmer break above the $4,400 mark this week. But in the absence of a notable spark, we're not quite there yet.
It's on to the US weekly jobless claims and PPI data up next.
ING’s Francesco Pesole keeps a constructive stance on EUR/USD after recent US data, based on a view that the Federal Reserve is unlikely to deliver further tightening. He targets 1.160 in coming weeks, 1.17 in autumn and 1.18 by year‑end, while warning that the lack of clear catalysts and Gulf risks could keep EUR/USD confined to tight ranges and low volatility.
Upside targets but tight trading ranges"We retain a preference for EUR/USD upside following the latest US data. That view is rooted in our Fed assessment outlined above, though it must be balanced against the risk that renewed escalation in the Gulf could provide fresh support to the dollar."
"Our target for the coming weeks remains 1.1600, followed by 1.1700 in autumn and 1.1800 by year-end. The absence of a clear catalyst, however, may keep EUR/USD range-bound for longer, while vols test recent lows."
"We will be watching closely for another test of 1.1500. Our bias is that buyers would re-emerge there, potentially nudging the dominant trading range higher to 1.1500-1.1600."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Key Points:Softer U.S. CPI has reduced pressure for additional Fed tightening, making PPI the next major inflation test for the dollar.U.S. PPI could reshape September Fed expectations if producer inflation differs materially from the recent CPI signal.EUR/USD has been rejected near $1.1569 trendline resistance, putting the $1.1500 support area back in focus.DXY is attempting to recover from $99.42 trendline support but still needs to clear its 50-day EMA near $100.29.GBP/USD has slipped below the $1.3515 pivot, with the $1.3474–$1.3437 area becoming the key downside support zone.
In this article:GBP/USD
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GBP/USD ForecastEUR/USD
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EUR/USD ForecastUS Dollar News: PPI and UK GDP Reshape FX Outlook Today’s main driver of the US dollar is the reassessment of FED policy after the soft US consumer inflation numbers for July. The headline CPI increased by only 0.1% (month on month) and annual inflation slowed down to 3.4%, further dampening expectations for an FED rate hike in September. The focus now is on the release of the PPI (Production Price Index) scheduled for Thursday. Another soft reading will support the FED’s decision to pause. The FED will be more relaxed with higher inflation concerns if the PPI numbers show persistence in pipeline inflation.
The euro is trading in an environment reflective of mixed fundamentals. The current holding patterns from the ECB after the policy unchanged announcement in July, together with some stabilization of the eurozone activity in manufacturing, are in place. The eonjomy’s lingering stress from the Middle East energy crisis and weak household demand, are still evident. Investors will be watching to see if the softer US inflation narrows the policy gap more between the FED and ECB, which is a major currency driver.
Sterling got a new domestic catalyst from the release of the second quarter UK GDP that showed an expansion of 0.4% over the previous quarter. This was following the 0.6% expansion in the first quarter. The data provides some evidence that the expansion of the UK economy was sustained throughout the period of elevated energy costs and geopolitical tensions.
For the Bank of England, stronger growth makes policy more difficult. Inflation is starting to fall, but Energy costs means it could easily get worse again. Luckily for them, strong activity gives policymakers the ability to focus on price stability, effects of which should be seen over time.
For August 13, the immediate FX focus is U.S. PPI. Weaker PPI could strengthen the possibility of a longer pause from the Fed, while higher PPI could make a more hawkish September scenario likely.
U.S. Dollar Index Technical Analysis: DXY Attempts Recovery Above $99.42 Trendline Support Dollar Index Price Chart – Source: Tradingview The U.S. Dollar Index is currently at $100.03, attempting to climb above the rising trendline and horizontal support at $99.42 that had previously acted as repeated support. Price has climbed above the 100 day EMA at $99.91; however, the 50 day EMA at $100.29 still acts as resistance. Recent candles show some buying pressure, but the index has yet to break above the resistance cluster to confirm the start of a stronger recovery.
RSI is around 44, on the path to recovery after being in weaker territory, but continues to be below 50. Resistance zones are at $100.06, $100.29, and $100.82. For support zones, we have $99.42, $98.76, and $98.18. From my perspective, the recovery continues to be valid as long as support is found above the trend line. If support is found above $100.29, I would lean more toward an extension to $100.82.
GBP/USD Technical Analysis: Pound Breaks Below $1.3515 Pivot as Momentum Weakens GBP/USD Price Chart – Source: Tradingview GBP/USD is trading at $1.3483 and has broken below the $1.3515 pivot area and the trendline that provided support to the recent movement. While price is above the 50 EMA at $1.3474, and the 100 EMA at $1.3443, the breakdown of the recovery structure has not occurred. The momentum has definitely shifted to the downside.
The Relative Strength Index (RSI) has moved down to around 46 and recently has lost bullish pressure as price was rejected from the $1.3515-$1.3540 area. Price movement resistance can be expected at $1.3515, $1.3559, $1.3601, while support can be expected at $1.3474 with stronger support expected at $1.3437, $1.3401, and $1.3343. Price action in GBP/USD has to break $1.3515 in order to retain the bullish scenario. Without that, emphasis will remain focused on the $1.3437-$1.3474zone.
EUR/USD Technical Analysis: Euro Rejected at Descending Trendline Near $1.1570 EUR/USD Price Chart – Source: Tradingview Currently at $1.1520 on the 4 hour chart, EUR/USD rejected the descending trendline again at $1.1569. The market is now heading down towards the 50 EMA at $1.1525, where the 100 EMA at $1.1499 is the next major dynamic support. The latest candles show the loss of upside momentum, with RSI heading down to 42, and the trendline, at the same time, showing loss of bullish momentum.
Immediate resistance lies at $1.1569, $1.1621, and $1.1674. On the other hand, $1.1500 and $1.1456 are the key support levels. In my opinion, the market remains bearish as long as it is trading below the descending trendline. A break above $1.1569 will put the bullish market back in play. However, if the market falls beneath $1.1500, the $1.1456 level may become active.
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Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann highlight that EUR/USD briefly spiked to 1.1562 on the US CPI release before reversing to 1.1524. They now see further pullback risks contained within 1.1510–1.1545 intraday and judge that upward momentum has faded, with the pair likely to range-trade between 1.1480 and 1.1580 over the coming 1–3 weeks.
Euro-Dollar momentum fades into consolidation"24-HOUR VIEW: After EUR traded in a quiet manner two days ago and closed largely unchanged at 1.1540, we highlighted the following yesterday: “The price action provides no fresh clues, and we continue to expect EUR to trade between 1.1530 and 1.1560. That said, should EUR break above 1.1560, it could trigger a quick rise toward 1.1580.” The subsequent price movements did not unfold as expected. EUR spiked to a high of 1.1562 during the NY session and then pulled back sharply to close slightly lower at 1.1524 (-0.14%). Further pullback is not ruled out, but given that downward momentum has not increased significantly, any decline is likely to be contained within a 1.1510/1.1545 range."
"1-3 WEEKS VIEW: Two days ago (11 Aug, spot at 1.1545), we highlighted that “the hurdle for further gains has risen,” and EUR “must close above 1.1580 before a move to 1.1600 and beyond can be expected." Yesterday, EUR rose briefly to 1.1562 and then pulled back to a low of 1.1519. Although our ‘strong support’ level at 1.1515 has not been breached yet, upward momentum has largely faded. EUR appears to have entered a range-trading phase. For the time being, we expect EUR to trade within a 1.1480/1.1580 range."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The EUR/USD pair holds steady near 1.1520 during the early European trading hours on Thursday. US inflation cooled on a year-over-year basis for a second straight month, easing pressure on the US Federal Reserve (Fed) to raise interest rates as soon as next month. The US Producer Price Index (PPI) report for July is due later on Thursday.
Data released by the Bureau of Labor Statistics on Wednesday revealed that the US Consumer Price Index (CPI) rose 3.4% YoY in July, compared to 3.5% in the previous reading. Additionally, the core CPI, excluding food and energy, increased 2.5% YoY in July, versus 2.6% prior. Both readings came in line with expectations.
Traders further cut the chance for a September Fed rate hike, lowering the odds to 40%, according to the CME FedWatch tool. Fed officials will get August CPI and jobs reports before their September meeting.
Nonetheless, escalating geopolitical tensions in the Middle East could boost a safe-haven currency such as the US Dollar (USD) and create a headwind for the major pair. Reuters reported that the US and Iran remain at loggerheads over efforts to agree a permanent end to the war in the Gulf. A senior Iranian official said that there had been no progress in talks to revive the interim deal agreed in June and define a time frame to implement it.
Euro holds steady as post-FOMC consolidation persistsAnalysts at Scotiabank observe that the Euro is “entering Wednesday’s NA session flat vs. the USD while showing a mixed performance against the G10 currencies overall.” They note that the single currency “has spent much of August consolidating within a tight, flat range, lacking a catalyst in the period following the FOMC meeting in late July,” underscoring the absence of a clear directional driver in recent trading.
Technical Analysis: EUR/USD keeps a bearish vibe under the 100-day SMA In the daily chart, EUR/USD holds below the 100-day simple moving average (SMA), keeping the near-term bias bearish despite a modestly constructive tone in momentum, with the Relative Strength Index (14) hovering around 56. Price remains above the 20-day Bollinger middle band SMA, suggesting downside is cushioned for now, while the upper Bollinger band near marks a broader cap on recovery attempts.
On the topside, immediate resistance aligns at the 100-day SMA at 1.1565, ahead of the upper Bollinger band around 1.1612, where selling interest could strengthen if tested. On the downside, initial support is located at the 1.1500 psychological level, followed by the 20-day Bollinger middle band at 1.1475. A deeper bearish extension is likely to target the lower Bollinger band near 1.13375 if the current floor gives way.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro FAQs The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
TL;DR: EUR/USD has nearly everything bulls could ask for — a weaker Dollar, fading Fed hike bets, and rising ECB hike odds — yet the pair hasn’t broken out, because Euro itself isn’t confirming the move broadly across its other crosses.
The Dollar Has Given EUR/USD Every Reason to Rise EUR/USD has been handed almost everything bulls could reasonably ask for over the past week. July payrolls unexpectedly contracted, forcing markets to scale back Fed tightening bets. July CPI then showed core inflation returning to 2.5%, back at its pre-Iran-war level. September Fed hold probability has consequently risen from around 45% a week ago to roughly 60%. The Dollar has given EUR/USD plenty of room to move higher.
The Euro Side Should Be Helping Too Renewed oil surge has pushed the expected probability of a September ECB hike above 90%, up from around 70% a month earlier. The obvious counterargument is that the ECB may be making a policy mistake by tightening into weak growth, eventually turning higher rates into a negative for the Euro. Yet the latest activity data don’t provide much support for that conclusion — the Eurozone PMI Composite strengthened for a second straight month in July, with Germany also showing improvement. For now at least, the economy doesn’t look weak enough to explain the Euro’s reluctance to rally.
So What’s Actually Holding EUR/USD Back? There may not be one hidden macro catalyst. The more telling explanation is simpler: Dollar weakness is doing its part, but the Euro itself isn’t attracting enough broad demand to confirm the move. EUR/USD can rise because the Dollar falls, but a durable breakout becomes much easier when the Euro is also strengthening across crosses. So far, that confirmation is missing.
That puts EUR/GBP, EUR/AUD, and EUR/CAD under the spotlight. Declines in those crosses would suggest Euro weakness is broadening beneath the surface and could eventually drag EUR/USD lower even if Fed expectations remain relatively Dollar-negative. Conversely, stabilization or recovery across Euro crosses would make EUR/USD’s current hesitation easier to dismiss as consolidation before another push higher. The question is therefore becoming less about whether the Dollar has weakened enough, and more about whether the Euro can finally take advantage.
ActionForex’s Technical View on EUR/USD The technical picture captures that uncertainty neatly. The base case remains that the broader decline from 1.2081 completed a three-wave correction at 1.1323, after support emerged around the 38.2% retracement of 1.0176 to 1.2081, at 1.1353. Bullish divergence in the daily MACD reinforces that interpretation.
But EUR/USD still has to break the 1.1621 cluster resistance — the 38.2% retracement of 1.2081 to 1.1323, at 1.1613 — decisively. A sustained move through that zone would provide the confirmation price action has so far lacked, strengthening the case that the rebound from 1.1323 is developing into something larger.
Until then, failure matters. Rejection from 1.1613/21, followed by a break of 1.1481, would flip the interpretation, suggesting the rebound from 1.1323 was only corrective and that the larger decline from 1.2081 is ready to resume through 1.1323.
EUR/USD still has a bullish setup, but not yet a bullish confirmation. The Dollar has opened the door; now the Euro has to walk through it.
Key Takeaways September Fed hold odds have risen from 45% to 60% in a week, driven by contracting payrolls and core CPI returning to its pre-war 2.5% level. September ECB hike odds have risen above 90% on renewed oil strength, with Eurozone PMI data showing no evidence of growth weak enough to undercut that case. EUR/USD’s stalled breakout likely reflects a lack of confirmation from Euro crosses (EUR/GBP, EUR/AUD, EUR/CAD) rather than any single hidden catalyst. A decisive break above the 1.1613-1.1621 resistance cluster would confirm the rebound from 1.1323 is developing into a larger move higher. Rejection at 1.1613/21 followed by a break of 1.1481 would instead suggest the rebound was only corrective, reopening the broader decline from 1.2081 toward 1.1323.
ActionForex
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