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The EUR/USD enters a potentially decisive week with monetary policy on both sides of the Atlantic once again driving the currency pair. The European Central Bank is widely expected to raise interest rates on September 10, while the release of U.S. inflation data on September 11 could determine whether the Federal Reserve follows with a rate hike of its own next week.

The ECB decision is largely anticipated, meaning the market reaction could depend less on the 25-basis-point move itself and more on the central bank’s guidance about what comes next. In the United States, meanwhile, the August consumer-price index could change expectations for the September 15-16 Federal Reserve meeting. That creates scope for increased volatility in the EUR/USD pair, particularly because the FX pair seems to be consolidating after a rebound.

Daily EURUSD Chart - Source: ActivTraderECB and Fed policy divergence could drive EUR/USD volatilityEurozone inflation accelerated to 3.3% in August from 2.9% in July, according to Eurostat’s preliminary estimate, marking its highest level since September 2023. The increase was largely driven by energy prices, with energy inflation accelerating to 14.3% from 10.3%. Core inflation, however, eased slightly to 2.4% from 2.5%. 

This release has strengthened expectations that the ECB will continue tightening monetary policy despite the risk that higher energy costs could weigh on economic activity. All 65 economists surveyed by Reuters expected the ECB to raise its deposit rate by 25 basis points to 2.50% on September 10.

The hike itself, therefore, should not come as a major surprise to markets. Instead, traders are likely to concentrate on ECB President Christine Lagarde’s communication and the updated economic projections. The key question is whether the ECB considers September’s increase the end of the tightening cycle or whether it leaves the door open to additional hikes. This distinction could prove important for the EUR/USD’s trajectory. 

Reuters’ latest economist poll found that 91% of respondents expect the deposit rate to finish 2026 at 2.50%, while 78% expect it to remain there through the middle of 2027. Interest-rate markets, however, have been more hawkish and have been pricing the possibility of another increase.

The energy shock makes the ECB’s communication particularly important. Continued geopolitical tensions and elevated oil and gas prices could keep headline inflation above target for longer, potentially forcing policymakers to maintain a restrictive stance. Economists surveyed by Reuters now expect eurozone inflation to return to the ECB’s 2% target only toward the end of 2027.

For the euro, a clearly hawkish ECB could therefore provide support, particularly if policymakers signal that another rate increase remains possible.

The other side of the EUR/USD equation is the Federal Reserve.

The U.S. August employment report has already complicated the picture. Nonfarm payrolls increased by 162,000 in August, significantly exceeding expectations, while the unemployment rate remained at 4.1%. Additionally, the change for July was revised up, from -23,000 to +21,000. The stronger labour-market figures pushed market expectations for a September Fed hike higher. Reuters reported that fed funds futures were pricing a roughly 57% probability of an increase late on Friday.

That leaves the August CPI report as a potentially decisive catalyst. The U.S. Bureau of Labor Statistics is scheduled to publish the figures on Friday, September 11. July CPI showed annual inflation at 3.4%, while core inflation stood at 2.5%. Economists surveyed by Reuters expect August CPI to rise 0.4% month-on-month, with core CPI increasing 0.2%.

A hotter-than-expected inflation reading could reinforce expectations for a September Fed hike and potentially strengthen the dollar. Conversely, evidence that underlying inflation is continuing to moderate could reduce the probability of immediate tightening, weighing on the dollar and potentially supporting the EUR/USD.

The CPI report arrives only days before the Fed’s September 15-16 meeting, leaving little room for markets to ignore the data. Fed Governor Christopher Waller has already indicated that he would favour keeping rates unchanged if the upcoming inflation figures confirm that price pressures are cooling.

EUR/USD daily technical outlookThe pair has recovered significantly from its summer lows, rebounding by roughly 3.13% from around 1.1355. This recovery allowed the EUR/USD to break above the Ichimoku cloud on the daily chart. However, the rebound has lost momentum around the 1.1674 area. The EUR/USD is currently trading near 1.1611 and appears to have entered a consolidation phase, with the pair broadly confined between resistance around 1.1674 and support near 1.1559.

Daily EUR/USD Chart - Source: ActivTraderThis range could become particularly important as the ECB and U.S. CPI approach. A sustained break above 1.1674 would represent a significant technical development. It would indicate that buyers have regained control after the recent consolidation and could open the way toward higher levels.

A break below 1.1559, by contrast, would weaken the current bullish structure and suggest that the recent recovery is losing momentum. Such a move could expose the pair to further downside as traders reassess the sustainability of the summer rebound.

Momentum indicators provide a relatively neutral signal at present. The 14-period Relative Strength Index is around 53.94, keeping it slightly above the key 50 threshold but without real moment or heading towards overbought territory. The RSI has also struggled to extend higher after approaching an ascending support trendline that has developed from the oversold low reached at the end of June. This suggests that neither buyers nor sellers currently have a decisive advantage.

The Ichimoku configuration nevertheless remains worth monitoring. The earlier move above the daily cloud improved the medium-term technical picture, but the failure to establish a sustained move above 1.1674 means confirmation is still lacking. For traders, the coming economic events could therefore provide the catalyst needed to break the current range.

Source: MorningStarA hawkish ECB combined with softer-than-expected U.S. inflation would represent the clearest bullish combination for the EUR/USD. Such a scenario could increase expectations for further ECB tightening while simultaneously reducing the probability of a near-term Fed hike, narrowing the expected interest-rate differential between the euro and dollar.

The opposite combination would be potentially bearish for the pair. A hawkish ECB that is fully priced in, followed by stronger-than-expected U.S. inflation, could revive expectations for Fed tightening and strengthen the dollar. In that scenario, the 1.1559 support level could come under significant pressure.

There is also a third possibility: both central banks could deliver hawkish signals. If the ECB raises rates but signals that September could be its final move, while U.S. inflation remains elevated, the dollar could regain an advantage despite the ECB’s tightening. 

The ECB decision may establish the initial direction, but U.S. inflation could ultimately determine whether the pair breaks out of its current range. With EUR/USD trading close to the middle of the 1.1559-1.1674 range, the market seems to be waiting for a catalyst. The key levels to watch: 1.1674 on the upside and 1.1559 on the downside. A decisive break of either boundary could provide a stronger signal about the next directional move. 

Until then, traders should expect potentially intraday swings around the ECB decision, U.S. PPI and Friday’s CPI release. With monetary-policy expectations finely balanced on both sides of the Atlantic, the EUR/USD could be particularly sensitive to even relatively small surprises in the data.

The EUR/USD pair posted a modest comeback after falling in the last week of August, finishing the week just above the 1.1600 level. The US Dollar (USD) lost momentum and corrected lower on Monday, but overall it retained its recently regained strength amid persistent Middle East tensions and speculation that the Federal Reserve (Fed) will have to raise the benchmark interest rate in September. The USD resumed its advance on Friday, as upbeat employment data brought back demand.

United States employment and inflationIn between, the Greenback suffered a minor setback: Fed Governor Christopher Waller cooled the odds for a September rate hike on Thursday by saying that officials can “wait one meeting,” as long as there are no surprises from upcoming inflation data. He also noted that a 25-basis-point (bps) hike won’t bring inflation back to 2%.

The Bureau of Labor Statistics (BLS) will release the August Consumer Price Index CPI) and the Producer Price Index (PPI) for the same month in the upcoming days. Indeed, the CPI may not be the Fed’s favorite inflation gauge, but it's a reliable indicator of inflationary pressures and may define whether the Fed will hike or hold when it meets later this month.

The United States (US) published the August Nonfarm Payrolls (NFP) report on Friday, with upbeat figures backing the USD. The country added 162K new jobs in the month, much better than the anticipated 56K. The Unemployment rate held steady at 4.1% as expected. Furthermore, annual wage inflation, as measured by the change in Average Hourly Earnings, declined to 3.1% from 3.2%.

Other than that, the country published the August ISM Purchasing Managers’ Indexes (PMIs). The manufacturing index eased to 54.6 from 55.6 in July, while the Services PMI improved to 55.4 from 54.1 in the previous month. Within the manufacturing sector, inflation held steady as the Prices Paid Index printed at 71.1, matching the previous monthly reading. On services output, the Prices Paid Index edged higher to 72.6 from 70.3. A reading above 50 means that more businesses are paying higher prices than in the previous month, meaning inflationary pressures are being felt up and down across all businesses.

So, while Fed Governor Waller hinting at an on-hold September decision temporarily took its toll on the USD, the fact is that inflationary pressures are high enough for speculative interest to price in upcoming hikes. Rising energy prices amid the Middle East war are no doubt the main factor driving market concerns, with Crude Oil Prices regaining positive momentum after the US and Iran resumed hostilities in late August.

European Central Bank and Eurozone inflationInflation is not a problem exclusive to the US. Germany reported that the Harmonized Index of Consumer Prices (HICP) rose 2.9% YoY in August, according to preliminary estimates, higher than the previous 2.8% although better than the expected 3.1%. Furthermore, Retail Sales in the country fell 3.4% in July, worsening from a flat reading in July. The Eurozone HICP in the same period printed at 3.3% as expected, rising from the 2.9% posted in July.

The situation is similar; what’s different is how central banks are reacting to the news: the European Central Bank (ECB) has already hiked interest rates by 25 bps and is expected to deliver a similar rate increase when it meets on Wednesday. The move is largely priced in, which means the impact on the Euro could be limited.

The ECB faces yet another challenge: President Christine Lagarde, whose term as the ECB head ends in October 2027, may be due to an early exit. Market talks suggest she would step down before France’s Presidential elections either to participate in them or to allow President Emmanuel Macron to have a voice on Lagarde’s successor at the central bank. Lagarde refrained from confirming or denying such rumors, but left the door open for an early departure.

Other than the ECB decision, the European macroeconomic calendar will include the final estimates of the German and Eurozone HICP.

There’s yet another factor pushing central banks to raise rates. Government bond yields are on the loose amid inflation-related concerns and geopolitical tensions. Higher borrowing costs affect the country’s economy and add to the inflationary process. Central banks’ tools may not be enough to tame the chaos, but inaction from policymakers will make the picture even worse.

By the end of the week, however, US President Donald Trump, once again called for lower rates: “The Fed Board, with its great new leader, must get smart - BE PATRIOTS for a change. High interest rates put the U.S.A. at a very unfair disadvantage, and I won’t allow that to happen!,” he posted on Truth Social, also threatening to stop trade with countries with higher rates.

Indeed, President Trump’s desire for lower rates is probably the main reason why Chair Kevin Warsh has refrained from hiking rates despite pledging multiple times to fight inflation. The Fed is between a rock and a hard place.

EUR/USD Technical Outlook:

From a technical point of view, the daily chart shows EUR/USD trading with a neutral-to-slightly bullish tone as it consolidates between nearby moving averages. The pair is trading above the 20-day Simple Moving Average (SMA) at 1.1608 and the 100-day SMA at 1.1564, which together suggest a tentative underlying bid, while it remains capped by the 200-day SMA at 1.1634. Momentum fades, with the 14-day Relative Strength Index (RSI) indicator easing at around 56 and the 14-period Momentum indicator nearing its midline from above, suggesting buyers are losing interest.

On the weekly chart, EUR/USD trades above the 20-, 100-, and 200-week SMAs, with the shortest SMA at 1.1562 providing immediate dynamic support. The broader price placement comfortably above the 100-week SMA at 1.1337 and the 200-week SMA at 1.1075 suggests the medium-term uptrend remains intact, yet technical indicators, holding around their midlines and directionless, suggest investors are unwilling to take stronger positions.

On the topside, immediate resistance is at the 200-day SMA around 1.1634; a daily close above this barrier would open the way for a retest of recent highs in the 1.1710 region, ahead of the 1.1800 threshold. On the downside, initial support is seen at the 20-day SMA near 1.1608, with the 100-day SMA at 1.1564 providing a deeper cushion if the pair slips back. A break beneath this latter level would likely open the door for a steeper decline, with 1.1470 as the next level to watch.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Economic Indicator ECB Monetary Policy Statement At each of the European Central Bank’s (ECB) eight governing council meetings, the ECB releases a short statement explaining its monetary policy decision, in light of its goal of meeting its inflation target. The statement may influence the volatility of the Euro (EUR) and determine a short-term positive or negative trend. A hawkish view is considered bullish for EUR, whereas a dovish view is considered bearish.

Read more.

Next release: Thu Sep 10, 2026 12:15

Frequency: Irregular

Consensus: -

Previous: -

Source: European Central Bank

EUR/USD attracts buyers on Thursday as a sharp rally in the Japanese Yen (JPY), softer United States labour-market data and a pullback in US Treasury yields weigh on the US Dollar (USD). At the time of writing, EUR/USD trades around 1.1622, up roughly 0.30% on the day.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99.00, near a one-week low, after reaching 99.86 on Wednesday, its highest level since August 14. Meanwhile, the benchmark 10-year US Treasury yield falls for the second consecutive day to around 4.74%, retreating from 4.81%, its highest level since October 2023.

Dovish comments from Federal Reserve (Fed) Governor Christopher Waller prompt traders to scale back bets on a rate hike this month. Waller said he is “finally seeing some signs of disinflation in recent data” and that the “rate decision in September hinges on August inflation.” He added that he would support keeping interest rates unchanged if the August data confirm recent progress.

Waller also said the Fed’s mandate is to achieve “price stability and full employment, not financial conditions,” adding that the current interest-rate setting “could get us back to 2% inflation.”

According to the CME FedWatch Tool, the probability of a rate hike at the Fed’s September 15-16 meeting has fallen to around 48% from 63% a day earlier.

Meanwhile, mixed US economic data offers conflicting signals. Initial Jobless Claims increased to 206K in the week ending August 29, slightly above the market forecast of 205K and the previous reading of 204K. However, the ISM Services PMI rose to 55.4 in August from 54.1 in July, exceeding expectations of 54.3. The Prices Paid and Employment indices increased to 72.6 and 47.8, respectively. Traders now await Friday’s Nonfarm Payrolls (NFP) report for fresh clues on the Fed’s monetary policy outlook.

Across the Atlantic, the European Central Bank (ECB) is widely expected to raise interest rates at next week’s monetary policy meeting. The move would mark the second rate hike this year as the central bank seeks to curb inflation, which has been driven largely by elevated Oil prices linked to the war in the Middle East.

A Reuters poll showed that all 65 economists surveyed expect the ECB to raise its Deposit Facility Rate by 25 basis points to 2.50% on September 10. Around 91% expect the rate to stay at 2.50% through the end of the year, while 78% see it holding at that level through mid-2027.

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 British Pound.

USDEURGBPJPYCADAUDNZDCHFUSD-0.29%-0.18%-2.02%-0.31%-0.28%-0.32%-0.59%EUR0.29%0.10%-1.75%-0.08%0.01%-0.10%-0.31%GBP0.18%-0.10%-1.85%-0.16%-0.09%-0.18%-0.41%JPY2.02%1.75%1.85%1.72%1.78%1.67%1.45%CAD0.31%0.08%0.16%-1.72%0.04%-0.06%-0.27%AUD0.28%-0.01%0.09%-1.78%-0.04%-0.08%-0.30%NZD0.32%0.10%0.18%-1.67%0.06%0.08%-0.19%CHF0.59%0.31%0.41%-1.45%0.27%0.30%0.19% 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).

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Summary:

The EUR/USD remains vulnerable below 1.1621 as USD strength still remains despite Monday's pullback move to the upside. Current Setup Current sentiment: cautiously bearish EUR/USD.

The pair is up 0.33% on the day and trading around 1.1616. The modest intraday recovery comes as traders who were long USD take profits. However, sentiment still favors USD strength, and that is why this bias for EUR/USD is cautiously bearish. The Euro is getting some support from expectations of a potential rate hike by the European Central Bank in September, especially as renewed tensions between the US and Iran have driven oil prices higher and raised concerns about imported inflation in the Eurozone. 

Macro Drivers for the EUR/USD 1) Fed Hawkish Expectations

After the Fed Chair’s hawkish comments at the Jackson Hole symposium on Friday, 28 August, markets are now pricing in a much higher probability of a September Fed hike. US bond yields rose sharply, which continues to support the dollar while limiting the EUR/USD’s upside. This upside retracement was capped at 1.1621 on 31 August.

2) The ECB Policy Meeting

The ECB is also expected to raise rates in September in direct response to the hike in oil prices following the renewed tensions in the Middle East. Eurozone yields have also risen sharply, which should be ok to ward off a major euro sell-off unless the ECB disappoints and the Fed’s monetary policy expectations are repriced more hawkishly.

3) Geopolitics

Renewed US-Iran military tensions are keeping Brent crude above $90/barrel. This supports defensive positioning into the dollar, even as the risk of imported inflation makes an ECB rate hike more likely. Geopolitics is clouding the EUR/USD outlook, and the next two weeks should provide additional clarity on the situation.

Price Catalysts This Week 1. Non-Farm Payrolls: The major price catalyst this week is the Non-Farm Payrolls report. A weak payrolls report undermines any September Fed-hike expectations. This could strongly support EUR/USD amid ECB rate-hike expectations. However, a better-than-expected US jobs report favors additional dollar strength.

2. Other Macroeconomic Data: Other price catalysts include the US ISM Manufacturing PMI data and the Eurozone Core CPI Flash Estimates YoY (2.5% consensus vs 2.5% prior).

3. Brent crude prices: This is important to establish the level of defensive positioning into the US Dollars, and also the extent to which any ECB rate hike bets are repriced.

EUR/USD Weekly Forecast Scenarios Base case: EUR/USD remains under pressure below 1.1640.

Bull case: Euro gets support from hawkish ECB expectations. Additionally, weak US jobs data → fall in Fed hike expectations → weaker USD → allows EUR/USD to rebound toward 1.17.

Bear case: strong US jobs data + higher oil prices + hawkish Fed → reinforces USD strength. EUR/USD breaks 1.1570 and targets 1.1550.

EUR/USD Technical Outlook Technically, 1.1621 (31 August intraday high) is the next important resistance. Below it, EUR/USD remains vulnerable to 1.1577, followed by the 8 June and 4 August lows at 1.1506. A breakdown of 1.1577 support unlocks the downward path to a retest of the uncapped neckline of the completed double bottom at 1.1506.

On the flip side, a break of 1.1621 clears the pathway to 1.1682. A further move north brings in 1.1743, a potential pitstop before 1.1813 comes into the picture.

EUR/USD has regained ground in recent sessions, with the pair trading near 1.17 as broad-based weakness in the US dollar continues to dominate the foreign-exchange market. The main driver remains the changing monetary-policy outlook, with investors focused on whether the Federal Reserve can maintain a restrictive stance while the US economy shows signs of slowing.

The dollar faces a key test this week as Fed Chair Kevin Warsh prepares to deliver his first speech at Jackson Hole on Friday. Persistent inflation and rising long-term Treasury yields could encourage a hawkish tone, particularly if Warsh signals that rate cuts in September are far from guaranteed. Conversely, weaker US growth or softer inflation data would reinforce expectations of easier monetary policy and could extend the dollar’s decline.

In Europe, euro-area inflation rose to 2.9% in July, keeping price pressures above the ECB’s 2% target. The ECB has kept interest rates unchanged since June, but higher energy prices and renewed inflation risks could limit the scope for further easing.

With EUR/USD trading near multi-month highs, the Jackson Hole symposium and upcoming US PCE inflation data could determine whether the euro can extend its advance or whether a hawkish Fed response triggers a renewed recovery in the dollar.

Technical Analysis of EUR/USD

As the daily EUR/USD chart shows, the pair has broken decisively above the descending trendline that had capped price action since the February highs, marking a significant shift in the medium-term structure.

The pair is now trading around 1.1665, comfortably above both the 100-period EMA at 1.1546 and the 0.382 Fibonacci retracement at 1.1579. The breakout has also lifted EUR/USD away from the 1.1537–1.1495 support area, leaving the 1.1714 Fibonacci resistance level as the next major test.

Bullish Scenario If buyers can maintain control above the 1.1579 Fibonacci level and the 100-period EMA, the bullish structure remains intact.

A break above 1.1714 would open the way towards the 1.1775–1.1800 resistance zone, where previous price action has repeatedly stalled. A sustained move above this area would strengthen the case for a broader recovery and suggest that the longer-term downtrend may have been decisively reversed.

Bearish Scenario Conversely, a rejection at 1.1714 followed by a break below 1.1579 would weaken the current setup and expose the 100-period EMA around 1.1546, which is closely aligned with the 0.5 Fibonacci level at 1.1537.

A deeper decline through this confluence would bring the 0.618 retracement at 1.1495 into focus, followed by 1.1435 and the 0.786 Fibonacci level as the next downside references.

With EUR/USD testing major Fibonacci resistance after breaking above its descending trendline, the key question is whether buyers can turn the breakout into a sustained advance towards 1.1800, or whether resistance will once again send the pair back towards its key support zone.

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EUR/USD has broken above its 200-day average as Goldman Sachs argues Treasury support may force the Dollar to absorb more of the adjustment. The Euro to Dollar (EUR/USD) exchange rate traded around 1.1700 on Friday morning, up 0.11% on the day and 1.12% higher over the previous five sessions.

The pair has gained 2.61% over the past month, with the latest leg higher following Washington's decision to increase long-dated Treasury buybacks.

Goldman Sachs believes the policy shift matters more for the Dollar than for the underlying rates outlook.

The Treasury said it would at least double liquidity-support buybacks for longer-dated bonds to $4bn per operation, a move that initially drove the 30-year yield almost 10 basis points lower and knocked around 0.7% from the Dollar index.

Goldman's Treasury desk estimates the larger programme could amount to at least $18bn of additional long-end purchases per quarter, or $72bn annualised, with total long-end buybacks potentially reaching around $144bn a year.

Supporting Bonds Could Shift the Pressure into FX Goldman Sachs G10 FX options trader Praneet Shah argued that the move should not be read simply as a rates story.

“I do however think this is more meaningful for the USD,” Shah wrote, noting that Washington had shown it was willing to become more inventive when supporting the long end of the Treasury market.

The key risk for the currency is that policy support for bonds changes where the adjustment takes place.

“Supporting bonds may come at the expense of letting the USD become the adjustment valve,” Shah said, framing the trade-off as one between restraining yields and allowing more of the pressure to show up through the exchange rate.

That interpretation is important because the bond-market move itself may not be large enough to generate a lasting decline in yields.

Goldman's rates team expects buybacks to help cap the long end rather than drive a major repricing lower, while fiscal deficits and heavy supply remain persistent upward pressures.

For foreign exchange, however, a credible perception that the Treasury is willing to lean against long-end stress could be enough to keep the Dollar under pressure even if yields stop falling.

The EUR/USD technical picture has also shifted.

Goldman's 20 August chart showed EUR/USD around 1.1693 against a 200-day moving average near 1.1630, leaving the pair clearly above that long-term trend measure.

Shah said the break was “interesting” and highlighted the possibility of a sustained move if positioning and low volatility continue to support the Euro.

Image: ERUK's EUR/USD sentiment survey poll results for next 4 quarters 2026, into 2027 The Exchange Rates UK Research Currency Forecast Sentiment Survey currently places the median EUR/USD forecast at 1.1650 for the fourth quarter of 2026 and 1.18 for the first quarter of 2027.

That means spot is already trading above the near-term consensus median.

In our view, holding above the 1.1630-1.1650 area would keep the Goldman technical signal intact, while a clean move through 1.1710 would strengthen the case for a further advance towards the upper 1.17s.

The wider implication is more significant than a single technical break: if the Treasury increasingly tries to suppress stress in the bond market, the Dollar itself may become the release valve.

The Euro (EUR) posts a fresh three-month high at around 1.1693 against the US Dollar (USD) during the European trading session on Thursday. The major currency pair strengthens as the US Dollar takes a hit due to plunging United States (US) long-dated bond yields after the Treasury Department’s announcement that it will double down on its bond-buying operations to curb higher borrowing costs.

Strategists at Danske Bank note that EUR/USD “spiked higher” after the US Treasury announced an increase in buyback volumes of longer-dated Treasury bonds, a move that coincided with a flattening of the US yield curve. They highlight that the 10Y UST, at “4.64% currently, … is now 10bp below the peak on Tuesday,” and that the adjustment in US yields has “only partly spilled over to Europe, where the primary market has opened with plenty of SSA and covered bond deals.”

In the European session, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, extends its decline and posts a fresh 11-week low near 98.70.

US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD-0.15%-0.17%0.16%-0.24%-0.01%-0.33%0.15%EUR0.15%-0.02%0.30%-0.08%0.13%-0.19%0.30%GBP0.17%0.02%0.32%-0.07%0.15%-0.15%0.32%JPY-0.16%-0.30%-0.32%-0.40%-0.17%-0.50%-0.01%CAD0.24%0.08%0.07%0.40%0.24%-0.08%0.39%AUD0.01%-0.13%-0.15%0.17%-0.24%-0.31%0.16%NZD0.33%0.19%0.15%0.50%0.08%0.31%0.50%CHF-0.15%-0.30%-0.32%0.01%-0.39%-0.16%-0.50% 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).

On the Euro front, financial markets are confident that the European Central Bank (ECB) will raise interest rates at the September meeting. In contrast, the Federal Reserve (Fed) is expected to leave them steady in the same month.

EUR/USD Technical Analysis

EUR/USD trades at 1.1693, extending its advance above the 20-period exponential moving average (EMA) at 1.1547. The pair’s position comfortably above this short-term trend indicator suggests a constructive near-term bias, though the Relative Strength Index (RSI) at 73.98 signals overbought conditions that could cap upside in the very short run.

On the downside, initial support is located at the 20-day EMA around 1.1547, where a pullback would likely be tested before any deeper correction unfolds. Looking up, the pair could advance towards May's high at around 1.1800 once it stabilizes above 1.1700.

Analysts at UOB Group are also constructive on the pair in the near-term horizon, recalling that they “turned positive on Monday (17 Aug, spot at 1.1570), indicating that ‘the price action suggests EUR is likely to trade with an upside bias.’” On Tuesday (18 Aug, spot at 1.1580), they maintained that “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 and beyond can be expected.” That condition was met yesterday as EUR “broke above 1.1615, as it rallied sharply to 1.1679,” with the pair closing “at a three-month high of 1.1677, up by 0.89%.”

UOB now judges that, “given the strong momentum, there is room for further upside in EUR toward 1.1725,” and will “maintain our positive EUR view as long as it stays above 1.1600 (‘strong support’ level previously at 1.1525).”

(The technical analysis of this story was written with the help of an AI tool. Know more.)

US Dollar FAQs The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

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.

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.

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.)

Rabıobank's Senior FX Strategist Jane Foley discusses recent EUR/USD strength, noting it was mainly driven by a softer Dollar after weak United States (US) labour data reduced Federal Reserve (Fed) rate hike expectations. Foley highlights resilient Eurozone data but also growth headwinds and limited appetite for strong Euro appreciation. Rabobank now expects EUR/USD to reach 1.16 in three months, assuming no major Eurozone growth surprises.

Euro gains on softer US outlook"At the end of last month EUR/USD lurched higher. On Friday, the currency pair traded at its highest levels since June 17. This may give the illusion of a buoyant EUR."

"The release of the surprisingly soft US July labour market report was the clear trigger for the move higher in EUR/USD on Friday. The softer data dealt a blow to expectations of Fed rate hikes which knocked US yields and the greenback lower."

"Indeed, it is RaboResearch’s view that the Fed will hold rates steady this year, which suggests scope for further softness in the USD."

"Given than another ECB rate hike is already in the price, a move is unlikely to provide much additional upside incentive for the EUR. We see scope for a modest upside bias in EUR/USD in the months ahead, mostly reflecting a reduction in Fed rate hike speculation and we have brought forward our forecast of a move to 1.16 from 6mths to 3mth."

"That said, in the absence of upside growth surprises in Q3, we are doubtful that the market will be keen to rebuild substantial EUR long positions in the coming months."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Commerzbank’s Michael Pfister notes that reduced expectations for Federal Reserve (Fed) tightening have helped EUR/USD climb, but questions how justified this move is. He stresses that Kevin Warsh’s lack of forward guidance does not preclude rate hikes, and that stronger US labour data could shift expectations back toward tighter policy. Commerzbank has cut its EUR/USD forecast by two cents across its horizon as perceived Dollar hike risks rise.

dollar risks reprice on Fed uncertainty"Since last week's Fed meeting, expectations of interest rate hikes have been priced out. Rather than tightening by roughly 44 basis points by the end of the year, the expectation is now for 'only' 33. This is likely the main reason why EUR-USD has recently climbed higher again."

"The key point is this: the absence of forward guidance does not mean that there will be no change in interest rates. It simply means that any change will not be announced in advance. This shifts the focus to the decision itself and places greater emphasis on the data."

"Today's labour market figures could provide an initial indication of the direction of future monetary policy. Our economists expect 100,000 new jobs to be created, which is a stronger increase than the current Bloomberg consensus forecast of +80,000. However, the USD’s reaction will depend not only on the headline figure, but also on the extent of revisions to previous months' figures and the unemployment rate."

"If today's figures are more positive than expected, this would strongly suggest possible interest rate hikes. While we still do not believe that the Fed ultimately intends to take this step, the market is unlikely to be deterred from continuing to bet on a rate hike. This is one of the main reasons why we have revised our EUR/USD forecast downwards by two cents over our whole forecast horizon this week."

"This is because, even though we have not adjusted our Fed forecast, the risk of an interest rate hike has clearly increased in recent weeks."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Summary:

The EUR/USD forecast is for a potential upside continuation as US Pres Trump says a Hormuz deal could be reached on Wednesday. The EUR/USD is inching higher this Wednesday as the US Dollar retreats following a shift in sentiment, with hopes for positive negotiations between the US and Iran on the geopolitical front gaining momentum. This Wednesday, the greenback is broadly lower as the markets digest the impact of falling US bond yields and softer US labor market indicators. Falling oil prices have also removed the safe-haven appeal of the US Dollar, with investors now willing to assume more market risk.

Furthermore, the US Dollar is also taking a beating after the ADP Non-Farm Employment Change surprised to the downside. US private sector employment as measured by this data set came in at 44K, lower than the market expectation of 68K and the prior of 95K.

The EUR/USD is currently trading 0.1% higher as of writing.

EUR/USD Macro Drivers 1) Retreating Treasury Yields

Today’s biggest macro driver is the decline in US bond yields due to softer US labor market data and reduced dollar appeal from falling oil prices and geopolitical de-escalation. Additional factors include profit-taking from recent dollar longs and rotation away from defensive dollar positioning toward a risk assumption.

2) Easing Geopolitical Fears

The recent pause in new US strikes has provided some relief to the markets on the geopolitical front. Despite the unresolved conflict, any headlines that point to a pause in hostilities are a piece of much-needed good news for a market that is looking drained by the elongated nature of the war. Oil prices are trading below $80 a barrel, suggesting a reduction in the geopolitical risk premium and improved market sentiment.

3) Markets Now Reassessing the Fed Outlook

Last week’s Federal Reserve meeting was interpreted as a hawkish hold. However, the reduction in fuel prices, the lowering of US bond yields, and the underwhelming US labor data released so far are forcing markets to reassess the Fed’s outlook. If the NFP data points to a slowing of US public sector employment and further inflation data suggests moderation, the Fed expectations could start turning dovish.

4) Stable Eurozone Fundamentals

Despite the growth concerns and the impact of rising energy costs on the energy-import-dependent single area, the single currency is benefiting from the ECB’s cautious stance. Furthermore, recent inflation data (Eurozone Core CPI Flash Estimates YoY: actual 2.5%, consensus/prior: 2.4) indicate that inflation has not disappeared totally. These factors are helping to create stability for ECB expectations and are currently supportive of Euro strength.

EUR/USD Near-Term Price Catalysts 1) US Data: Upcoming data from the US that will be on the watchlist of traders include Friday’s Non-Farm Payroll report. Subsequently, the consumer spending and consumer/producer price index data will also hit the newswires. If the data points to lowered US economic resilience, the weakness in the US Dollar could continue.

2) US Treasury Yields: Declining US bond yields will lead to a reduced demand for USD-denominated assets, which invariably supports further gains on the EUR/USD. On the flip side, USD strength is restored if bond yields start rising once more.  

3) Middle East geopolitics: Headlines around the state of shipping or military encounters in the Strait of Hormuz will impact oil prices. If there is a renewal of bombardments, the markets will interpret this as a sign of escalation, and this would revive the USD’s safe-haven appeal at the Euro’s detriment.

EUR/USD Forecast Scenarios Base case: moderate bullishness is expected, with the recent pullback in the USD expected to extend if US bond yields remain pressured. Furthermore, the cooling of geopolitical tensions and stable ECB policy expectations are expected to provide further support for the pair.

Bull case: a combination of weak US data, continued de-escalation on the geopolitical front, and additional declines in US bond yields could see more USD longs being liquidated. Under these conditions, the EUR/USD may reclaim the 1.1670 resistance level or higher.

Bear case: if US bond yields resume the upside trend, coupled with better-than-expected US data and renewed fighting between the US and Iran, this is supportive of a bear case scenario. This scenario sees a further widening in the interest yield differential between the Euro and US Dollar, and a retreat in Fed rate cut expectations.  A retreat towards support levels below 1.14 is the price expectation here.

EUR/USD: Technical Outlook The break of the neckline at 1.1480 confirms the bottoming pattern (progressing rising lows at 1.1324 and 1.1363). This unlocks the door for a measured move that is expected to complete at 1.1577, the prior low of 19 January 2026 and the lower edge of the resistance zone, with 1.1581 as the upper edge. Only when this zone is breached can the 1.1671 resistance (30 April 2026 low and neckline of the 16 April and 12 May 2026 double top) become available as a new upside target.

Fig 1: EUR/USD daily chart showing key price levels (snapshot taken on 5 August 2026) On the flip side, this upside move is only invalidated if the bottoming price levels are degraded, which leaves room for continuation of the recent near-term downtrend towards 1.1269, the high of 17 July 2023. A further downside target at 1.1210 (23 September 2024 high) becomes the next downside target if 1.1269 is breached.

EUR/USD begins the week around 1.1540. Following a volatile week, market attention has shifted from the Federal Reserve meeting to US economic data. Investors will assess whether incoming figures reinforce the case for a September rate hike or, conversely, point to a cooling of the US economy.

Monday brings business activity indices from China and the US. The US ISM Manufacturing PMI is expected at approximately 53.0, down from 53.3 previously. Holding firmly above 50 would support the dollar, while a more pronounced slowdown would raise doubts about economic resilience and provide support for EUR/USD. On Tuesday, attention turns to JOLTS job openings, with forecasts pointing to a decline to 7.3 million from 7.594 million.

Wednesday’s highlight is the ISM Services PMI, expected to rise to 55 from 54. A strong reading would support the dollar, as services remain a key component of the US economy and an important source of inflationary pressure. Thursday’s calendar is relatively quiet, leaving the pair to consolidate ahead of Friday’s key releases.

On Friday, Germany will release foreign trade data, with the surplus expected to narrow to €11.2 billion from €19.1 billion. The main event, however, will be the US labour market report. Non-farm payrolls are forecast to rise by 79,000, up from 57,000, while unemployment is expected to hold steady at 4.2%. A stronger reading would reinforce expectations of a Fed rate hike and weigh on EUR/USD, while weak job growth or rising unemployment would support the euro.

Technical analysis

On the H4 chart of EUR/USD, the market has formed a consolidation range around the 1.1533 level, currently extending between 1.1524 and 1.1538. This range is nearing completion. An upside breakout would suggest a corrective move towards 1.1556, followed by a decline to 1.1480. A direct downside breakout would open the way for a move to 1.1400. The MACD indicator supports this scenario, with its signal line above zero but pointing downwards, reflecting weakening upward momentum.

On the H1 chart, the market has completed an upward move to the 1.1556 level. A consolidation range is currently forming below this level. Today, a move lower towards 1.1480 is expected, followed by a move higher to 1.1518, and then a continuation of the downward move to 1.1400, with scope for the trend to extend to 1.1330. The Stochastic oscillator confirms this scenario, with its signal line below 80 and pointing downwards towards 20, indicating increasing short-term downside pressure.

ConclusionEUR/USD begins a data-heavy week with markets focused on US economic indicators following the Fed’s policy decision. The ISM manufacturing and services PMIs, JOLTS job openings, and Friday’s labour market report will be crucial in shaping expectations for a potential September rate hike. A strong set of data would support the dollar, while weaker readings could support the euro. Technically, the pair appears to be consolidating around 1.1533, with a potential corrective move towards 1.1556 before resuming its broader bearish trajectory towards 1.1400 and possibly 1.1330. The week’s data releases will be the key catalysts for direction.

Joint intervention distorts dollar's strongest macro relationships EUR/USD tests January downtrend amid intervention threat Euro area data surprises strongest since early 2023 July payrolls to decide if dollar weakness persists EUR/USD is testing long-running downtrend resistance in early Asian trade on Monday, reacting to an artificial, and potentially temporary, slide in the dollar late last week. Rather than the economic calendar or technicals, it's likely the Japanese yen that determines whether resistance holds or snaps, with the threat of further joint intervention by Japanese and US authorities likely to dominate proceedings.

Yen intervention remains the dominant FX driver Markets widely expect Japan to announce on Monday that it coordinated with the US to support the yen last week, marking the first joint intervention by the two nations in decades. But the bigger question is whether authorities have finished.

As outlined in our USD/JPY week ahead report released over the weekend, prior intervention episodes suggest there's a strong chance of further action should yen weakness re-emerge. With USD/JPY already rebounding from the earlier session lows, the risk of additional intervention cannot be overlooked on Monday.

That points to further artificial downside in the dollar, driven by factors other than fundamental market forces. Should the intervention episode continue, it would likely provide another tailwind for EUR/USD, increasing the risk the recent rebound extends further.

However, whether that weakness lasts beyond the short term is another matter entirely. A heavy slate of US economic data, including Friday's non-farm payrolls report, will likely determine whether the move can grow into something more sustainable.

Traditional dollar relationships weaken

Source: TradingView

Assessing whether dollar weakness can be sustained is more difficult because some of this year's strongest relationships have weakened sharply over the past week. Over the past month, the US Dollar Index has continued to display a reasonably strong relationship with the Fed funds futures curve, reflecting market expectations for Fed rate hikes between June this year and June next year, along with US two-year Treasury yields, with 20-day correlation coefficients of 0.62 and 0.65 respectively.

However, over the past five sessions those relationships have deteriorated sharply. The correlation with the Fed funds futures curve has fallen to just 0.29, while the relationship with US two-year Treasury yields has weakened to only 0.14. Correlations with other drivers, including energy prices, have also deteriorated over the same period.

While month-end flows may explain part of the shift, the intervention episode unfolding in Japan also appears to be distorting the broader market message. What has driven the dollar for much of this year isn't necessarily what's driving it right now.

Euro data turns a corner

Source: LSEG Workstation

While intervention may be helping propel EUR/USD higher in the short term, it's not the only factor at work. Euro area economic data has staged a remarkable turnaround in recent months, with the Citi Economic Surprise Index, which measures whether data is beating or missing economists' forecasts, rebounding sharply from the lows seen during the early stages of the Iran conflict.

The recovery has been nothing short of V-shaped. Having languished in deeply negative territory in April, the index has surged to its highest level since early 2023, pointing to a growing prevalence of upside surprises across the euro area. Friday's inflation report only reinforced that trend, with both headline and underlying inflation accelerating, strengthening the case for another ECB rate hike.

By contrast, while the US economy continues to outperform, it is finding it harder to deliver upside surprises relative to elevated market expectations. That suggests EUR/USD's rebound is not solely a by-product of intervention-driven dollar weakness, with improving relative fundamentals also helping underpin the move.

The calendar takes a back seat

Source: TradingView

Speculation surrounding further intervention, along with the associated flows through the Japanese yen, are likely to remain the dominant influence on EUR/USD during Monday's session. As a result, the economic calendar may struggle to generate sustained moves unless it delivers a surprise.

Of the scheduled releases, US ISM services PMI looks the most likely candidate to spark a fundamentally driven move, although even that may be giving it too much credit in the current environment. The US Treasury's quarterly refunding announcement will also attract attention, but it's typically Wednesday's release detailing the composition of debt issuance that has the greater market impact.

The Senior Loan Officer Opinion Survey rounds out the calendar. While it has influenced markets before, it's a backward-looking report and, against this unique backdrop, its ability to generate meaningful volatility looks extremely limited.

Trendline showdown

Source: TradingView

Looking at EUR/USD on the daily timeframe, the technical stakes today are high with the pair now trading through downtrend resistance that's been in place since the highs set in late January.

The descending triangle structure that had contained price action last week was shattered following the Fed decision last Wednesday, delivering a breakout that saw EUR/USD push not only through former resistance at 1.1480, but also the 50-day simple moving average, extending the move into a test of the long-running downtrend. That becomes the key level to watch today, along with the 100-day simple moving average sitting marginally above at 1.1569.

A clean break and close above the trendline would strengthen the view that a trend change may be taking place, opening the door towards the 23.6% Fibonacci retracement of the January 2025 to January 2026 bull move at 1.1633, which also coincides with the 200-day simple moving average. Beyond that, 1.1670 is the next level to watch, with a break above opening the door towards 1.1800 and 1.1850.

On the downside, should the downtrend continue to cap gains, a reversal back towards the confluence of the 50-day simple moving average and former resistance at 1.1480 may be on the cards. A break beneath that would open the door for a retest of the support zone comprising the 38.2% Fibonacci retracement of the January 2025 to January 2026 bull move, horizontal support at 1.1364, and the June 24 swing low at 1.1325.

The oscillators continue to favour further upside. RSI (14) continues to push above the neutral 50 level without entering overbought territory at 64, while MACD has confirmed the bullish signal with a crossover above the signal line and a move back into positive territory. However, that message comes with the caveat that artificial factors have played a significant role in the latest bout of euro strength.

ING expects EUR/USD to remain supported around 1.1500 following the sharp Dollar selloff, although a sustained move above 1.1600 would require a further dovish repricing of US interest rates. The Euro to US Dollar exchange rate (EUR/USD) gained just over 1% in July, recovering from a monthly low near 1.1354 and reaching a high around 1.1547.

EUR/USD pair remains 1.7% lower for 2026, having fallen from January’s peak at 1.2075 to a year-to-date low of 1.1325 in June.

Image: EUR/USD exchange rate performance over 48h chart The latest 48-hour chart above shows the pair rising from below 1.1440 to above 1.1530, leaving it close to the upper end of its recent range. The daily chart also shows EUR/USD moving back above its 20-day moving average, although it remains close to the declining 50-day average.

ING believes the sharp change in Dollar momentum leaves the Euro better supported in the near term.

The Greenback came under pressure after the Federal Reserve delivered a more dovish message than markets had expected. Investors were left questioning whether policymakers would follow through on their inflation-fighting rhetoric with actual rate increases.

The US Dollar’s decline accelerated after US core PCE inflation rose only 0.1% in June and second-quarter growth undershot expectations.

Suspected Japanese intervention against the Yen added to the pressure by triggering a sharp fall in USD/JPY and spilling over into broader Dollar sentiment.

Positioning may also keep the move going.

ING estimates that speculative long-Dollar exposure against other major currencies was at its most stretched since January 2025, while leveraged funds held their largest EUR/USD short positions since 2021.

According to the bank, “there may still be room for further USD long-squeezing”, making it too early to call a firm bottom in the Dollar selloff.

Analysts at ING note EUR/USD broke through 1.1500 “with little resistance” and expects the level to attract buyers for a while longer.

The bank sees near-term risks tilted towards further Euro gains, although it is cautious about chasing a sustained move above 1.1600.

Such a break would probably require another material repricing lower in US rates, together with an easing in Middle East tensions.

Image: EUR/USD Year-to-Date historical chart For now, ING expects buyers to continue emerging around 1.1500, with 1.1600 marking the more difficult test for the recovery.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

TL;DR: EUR/USD’s rebound reflects broad-based Euro strength as oil’s rebound since mid-week pushes markets toward the ECB’s own hawkish scenario, lifting September hike odds to roughly 70%.

Euro’s Broad-Based Strength Tells a Bigger Story EUR/USD has staged a notable rebound in the last 24 hours, but attributing the move solely to Dollar weakness misses a broader shift taking place in currency markets. The Dollar has indeed softened after investors pared expectations for a September Fed rate hike. Yet the Euro has strengthened not only against the Dollar, but against most major peers. That broad-based performance suggests investors are repricing the European Central Bank itself, rather than merely rotating away from weaker currencies.

Oil Is Moving the ECB’s Reaction Function in a Hawkish Direction The catalyst isn’t that the ECB has changed its policy stance, but that the assumptions feeding its reaction function have shifted. In its March staff projections, the ECB outlined a baseline scenario built around Brent crude averaging around $90 and European natural gas around €57/MWh through 2026, while an adverse scenario assumed oil near $120 and gas around €102/MWh — resulting in materially higher inflation.

That framework has become relevant again. At the ECB’s July 23 press conference, held as Brent broke above $100, President Christine Lagarde remarked that the earlier US-Iran ceasefire had been “short-lived,” leading to “serious developments on commodity markets.” She also stressed the ECB’s reaction function was “very well understood” by markets and projected inflation to remain well above target into the first half of 2027. This week’s renewed attacks involving Iran, US forces, and Saudi energy infrastructure have reversed much of the earlier decline in oil prices, pushing markets back toward the ECB’s own baseline energy scenario.

Oil Doesn’t Trigger Hikes Automatically Importantly, the ECB hasn’t become mechanically more hawkish simply because oil prices have risen. Lagarde has repeatedly emphasized that policymakers ultimately look for second-round effects — particularly stronger wage growth, firmer services inflation, and higher inflation expectations — before concluding inflation is becoming entrenched.

However, higher oil prices still matter because they shift the starting point. A sustained rise in energy costs lifts the projected path for headline inflation, making it easier for the Governing Council to conclude another rate hike is warranted. In effect, stronger oil prices lower the evidentiary burden for tightening even if second-round effects have yet to fully emerge, because the ECB’s own scenario analysis already treats prolonged energy shocks as sufficient to generate materially higher inflation.

GDP Removes One of the Dovish Arguments Today’s stronger-than-expected GDP data reinforce that assessment. Eurozone GDP expanded 0.4% qoq in the second quarter, beating expectations and rebounding from the flat first quarter. While hardly signaling an economic boom, the figures weaken one of the main dovish arguments — that growth is too fragile to absorb another rate increase. With activity proving more resilient than expected, the ECB has greater room to tighten policy without immediately risking recession.

Markets and Banks Are Converging on a September Hike That combination has fed directly into market pricing. Investors now assign roughly a 70% probability to a September rate hike, with much of this week’s repricing driven by renewed oil strength outweighing the more dovish tone that emerged from the ECB’s Sintra forum earlier this month.

Several major banks have moved in the same direction:

Deutsche Bank now describes a September increase to 2.50% as “highly likely” and close to a “done deal.” UOB expects one final 25 basis point hike followed by an extended pause. ING notes that around 23 basis points are already priced and argues the ECB has historically preferred to fully telegraph its policy moves. What to Watch Next Attention now turns to whether the oil rally proves durable. If tensions involving Iran continue to support energy prices into September, the ECB’s adverse inflation scenario will become increasingly relevant. Conversely, a renewed de-escalation could quickly reduce the urgency for another hike. Investors will also closely monitor upcoming remarks from ECB officials to see whether the stronger GDP data strengthens confidence that another move is becoming appropriate.

ActionForex’s Technical View on EUR/USD Technically, EUR/USD has improved but has yet to confirm a bullish reversal. The pair remains capped below 1.1499, which has switched from support to resistance. Encouraging signs are nevertheless emerging: the 4H MACD continues to strengthen, price has broken its near-term falling trend line, and the daily MACD continues to display bullish divergence. The pair is also finding support around the 38.2% retracement of 1.0176 to 1.2081, at 1.1353.

A decisive break above 1.1499, followed by sustained trading above the 55-day EMA at 1.1484, would strengthen the case that the decline from 1.2081 completed as a three-wave correction at 1.1323, opening the way toward 1.1848 and potentially higher.

Nevertheless, failure to overcome 1.1499 would keep the broader decline intact and leave scope for a deeper fall toward the 100% projection of 1.2081 to 1.1408 from 1.1848  at 1.1175.

Key Takeaways EUR/USD’s rebound reflects broad Euro strength against most major peers, not just Dollar weakness from fading Fed hike bets. Oil’s return above $100 is pushing markets toward the ECB’s own adverse inflation scenario, lowering the bar for another hike without requiring new second-round effects. Stronger-than-expected Q2 Eurozone GDP (0.4% qoq) removes the argument that growth is too fragile to absorb another rate increase. Markets now price roughly a 70% probability of a September ECB hike, with Deutsche Bank, UOB, and ING all leaning toward a move to 2.50%. EUR/USD needs a decisive break above 1.1499 and the 55-day EMA at 1.1484 to confirm the decline from 1.2081 has completed as a corrective structure.

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EUR/USD enters the final week of July at 1.1369. Friday's modest decline in energy prices reduced expectations that the Federal Reserve could raise rates as early as its upcoming meeting, scheduled for Tuesday and Wednesday.

At the same time, the main currency pair remains very close to the monthly low recorded in late June. Markets continue to price in at least one Fed rate hike before the end of the year.

Inflation risks have risen following a renewed escalation in the US–Iran conflict. Restrictions on the movement of energy tankers in the Persian Gulf and the Red Sea have pushed oil and fuel prices higher.

Additional support for the dollar is coming from strong US economic data. S&P PMIs showed the fastest pace of private business activity growth this year. Meanwhile, the number of initial jobless claims fell at the fastest pace in nearly six decades, confirming the resilience of the labour market.

Technical analysis

On the H4 chart of EUR/USD, the market has formed a consolidation range around the 1.1389 level, currently extending between 1.1336 and 1.1413. This range is nearing completion. An upside breakout would suggest a corrective move towards 1.1420, followed by a decline to 1.1313. A direct downside breakout would open the way for a move to 1.1313. The MACD indicator supports this scenario, with its signal line below zero and pointing firmly downwards, reflecting continued bearish momentum.

On the H1 chart, the market has completed an upward move to the 1.1414 level. A consolidation range is currently forming below this level. Today, a move lower to 1.1390 is expected, followed by a move higher to 1.1420, and then a decline to 1.1370, with scope for the trend to extend to 1.1313. The Stochastic oscillator confirms this scenario, with its signal line below 80 and pointing downwards towards 20, indicating increasing short-term downside pressure.

ConclusionEUR/USD remains under pressure as it approaches the final week of July, hovering near monthly lows. The modest retreat in energy prices at the end of last week briefly reduced expectations of an immediate Fed rate hike, but markets continue to price in at least one increase before the end of the year. Renewed US–Iran tensions and supply disruptions in the Persian Gulf and the Red Sea have pushed oil prices higher, reinforcing inflation risks. Strong US economic data – including robust PMI readings and a sharp decline in jobless claims – continue to support the dollar. Technically, the pair may see a temporary corrective move towards 1.1420, but the broader bearish structure remains intact, with downside potential towards 1.1313. The Federal Reserve meeting this week will be the key catalyst.

The Euro remains supported by expectations of further ECB tightening, but EUR/USD is still struggling to escape the lower end of its July range. EUR/USD traded close to 1.1371 at the end of the latest session, leaving the pair near July’s low after a subdued week for the single currency.

The Euro has fallen in six of the past eight completed sessions and is down around 0.4% for July, having retreated from a monthly high near 1.1481 to within one cent of June’s 1.1325 low.

Both ING and Nordea expect the European Central Bank to maintain a hawkish bias, with further interest-rate increases still likely.

However, neither the rate outlook nor the latest ECB meeting has generated enough momentum to push EUR/USD out of its narrow trading range.

ING expects the pair to remain supported by higher Eurozone rates, but retains a near-term downside bias towards 1.1380.

Nordea goes further, forecasting three additional 25-basis-point rate increases that would lift the ECB deposit rate from 2.25% to 3.00% by March 2027.

Latest — Exchange Rates:

Euro to Dollar (EUR/USD): 1.137117 (-0.05%)

Pound to Dollar (GBP/USD): 1.332498 (+0.09%)

Dollar to Yen (USD/JPY): 163.85169 (0.00%)

ING Sees September Hike Remaining in Play ING had expected the ECB to leave rates unchanged while preserving the hawkish market pricing already embedded in Eurozone interest rates.

Its baseline was for a hawkish hold, with policymakers attempting to prevent inflation expectations from becoming unanchored as European gas and global energy prices remain elevated.

“The aim today could be – once again – to preserve market pricing to limit the risk of inflation expectations de-anchoring,” says ING FX strategist Francesco Pesole.

ING argued that achieving this might require a clear indication that a September rate increase remained possible, either through the press conference or subsequent guidance.

The bank noted that the market had already priced approximately 45 basis points of tightening by the end of 2026, setting a relatively high hurdle for the ECB to deliver an additional Euro-positive surprise.

“The hawkish bar set by the market via pricing isn’t low,” says Pesole.

ING nevertheless expected a firm ECB stance to limit the downside for short-dated Eurozone rates and, by extension, the Euro.

The difficulty is that supportive rate differentials have not translated into a decisive EUR/USD advance.

“A central bank meeting would normally be a prime catalyst for EUR/USD to break out of its tight trading range, but we do not expect that to happen,” ING says.

The bank retained a near-term downside bias, arguing that currency markets remained too relaxed about the potential consequences of further escalation in the Gulf.

“Unless the newsflow becomes more constructive, we look for EUR/USD to slip towards 1.1380 in the coming days.”

That target has already been reached, with the pair ending the latest session near 1.1371.

Nordea Forecasts Three More ECB Rate Increases Nordea believes the ECB remains in a genuine tightening cycle rather than delivering one or two isolated increases.

The bank forecasts 25-basis-point hikes in September, December and March 2027, which would raise the deposit rate to 3.00%.

“The ECB did not touch rates today, but the message was in line with more rate hikes to come,” Nordea says.

“Our updated forecast still sees three more rate increases, but at a quarterly pace as opposed to a faster speed before.”

Nordea says the ECB’s latest communication left the door “wide open” to a September increase.

It highlights the central bank’s assessment that energy prices remained close to the assumptions used in its June forecast, which showed core inflation staying above 2% throughout the projection period even with two further rate increases already included.

The bank’s conviction does not depend on another major escalation in the Middle East or a renewed surge in oil.

Instead, Nordea expects broader price pressures and a relatively resilient Eurozone economy to keep the ECB tightening for longer.

“We think that we are amidst a hiking cycle rather than one or two isolated rate moves, and continue to expect the ECB to raise rates three more times.”

The bank has slowed the expected pace of tightening because oil prices have fallen from their earlier highs and the growth outlook has become less certain.

A rapid improvement in the geopolitical backdrop could reduce the need for further action, while a prolonged conflict and renewed energy-price increase could produce faster or additional rate increases.

Image: Nordea chart showing 25-basis-point ECB hikes in September, December and March 2027, taking the deposit rate to 3.00% - Courtesy of Nordea. Energy Inflation May Take Time to Spread Nordea argues that markets and policymakers may still be underestimating the delayed second-round effects of higher energy costs.

Its research notes that during the previous inflation cycle it took several months for rising energy prices to feed into food, goods and services inflation.

It also took considerably longer for forward inflation expectations to peak than for spot inflation itself.

“We still see risks biased towards more second-round impact on inflation than what markets and the ECB expect,” Nordea says.

This possibility supports the case for further tightening even if the immediate increase in oil and gas prices begins to reverse.

The bank also points to inflation expectations that remain above the ECB’s target across several measures.

Its report shows five-year market inflation expectations around 2.26%, while household and large-company measures remain closer to 2.9%.

Nordea expects Eurozone growth of approximately 1% in 2026, although it acknowledges that the risks are tilted to the downside.

The bank nevertheless says the economy has remained more resilient than weak purchasing managers’ surveys would suggest.

Manufacturing output and retail sales increased in the available April and May data, while second-quarter growth may have been around 0.3%.

Nordea expects household consumption to remain the primary source of positive growth, supplemented by investment in technology and defence.

EUR/USD Technical Outlook Despite the increasingly hawkish ECB outlook, the EUR/USD chart shows little evidence of sustained buying momentum.

The pair is trading close to 1.1371, below its 20-period moving average near 1.1372 and beneath session VWAP around 1.1381.

It also remains below the 200-period moving average near 1.1392, leaving the immediate intraday structure tilted to the downside.

EUR/USD attempted to recover towards 1.1390 during the latest session but failed to sustain the move.

The retreat confirms a band of resistance between approximately 1.1380 and 1.1392, with the 1.1400 level providing the next major barrier.

RSI stands around 44, having recovered from levels close to 30.

This indicates that selling pressure has eased and the pair is no longer oversold, but momentum remains below the neutral 50 threshold.

The technical picture is therefore consistent with consolidation near the lows rather than the start of a convincing Euro recovery.

Initial support is located around 1.1368, followed by July’s low near 1.1362.

A sustained break below that area would expose the June low around 1.1325.

On the upside, EUR/USD must first recover above 1.1375 and 1.1381.

A move through the 1.1390-1.1400 region would provide the first meaningful evidence that the Euro is developing greater breakout power.

Image: EUR/USD 15-minute chart showing support at 1.1362, resistance at 1.1380 and the 1.1390-1.1400 breakout zone Why ECB Hikes Have Not Lifted the Euro The lack of a stronger EUR/USD response reflects the fact that much of the hawkish ECB outlook is already priced into the market.

Nordea notes that almost a full rate increase is priced by September, another is largely priced by December and part of a further hike is reflected in March 2027 contracts.

This leaves limited room for interest-rate expectations to move further in the Euro’s favour without a fresh inflation shock or more forceful ECB guidance.

The US Dollar also retains support from higher US rates, geopolitical uncertainty and the risk that elevated energy prices eventually damage global risk appetite.

ING says the current low-volatility environment may be underestimating how quickly Dollar demand could return if financial markets lose their tolerance for higher oil and gas prices.

The Euro is therefore receiving support from ECB tightening expectations, but not enough to overcome simultaneous demand for the Dollar.

Euro Forecast 2026: Latest Bank Projections ING and Nordea both see a hawkish ECB, but the implications for EUR/USD remain restrained.

Nordea expects three further rate increases and a 3.00% deposit rate by March 2027, while ING believes policymakers will keep a September hike in play and defend current market pricing.

These forecasts should limit the risk of an immediate collapse in the Euro.

However, the rate outlook is already heavily reflected in market prices, while geopolitical and energy risks continue to favour the Dollar.

EUR/USD therefore remains vulnerable while below 1.1390-1.1400.

A break beneath 1.1362 would expose the June low near 1.1325, while only a sustained recovery above 1.1400 would suggest that hawkish ECB expectations are finally generating a meaningful upside breakout.

It was not an easy week for the euro. Now, EUR/USD has accumulated a decline of more than 0.4% over the last 2 trading sessions, reflecting significant short-term weakness in the European currency.

For now, selling pressure remains relevant, in a context where the European Central Bank decision failed to generate greater appeal for the euro. In addition, the U.S. dollar continues to show some strength as global risk events drive demand for liquidity and more defensive assets.

If this dynamic continues, selling pressure could continue to shape EUR/USD movements over the next few trading sessions.

Does the ECB fail to support the euro? During the week, the European Central Bank held its interest rate decision. The deposit rate remained unchanged at 2.25%, while the refinancing rate stayed stable at 2.4%.

In its message after the meeting, the central bank maintained a cautious pause. The institution noted that inflationary pressures could remain relevant, but also highlighted that economic dynamics in Europe may not support consistent interest rate increases.

For this reason, the ECB showed a fairly neutral stance toward possible changes in monetary policy. It also emphasized that future decisions will depend on economic data meeting by meeting, without committing to a specific path in the short term.

After the event, the central bank’s neutrality did not generate a relevant increase in the euro’s relative appeal. This is mainly because the ECB did not confirm an outlook for higher rates, while in the United States, the Federal Reserve continues to show signs that it could adopt a more aggressive stance over the coming months.

This difference keeps in place a dynamic that has been relevant for several months in the bond market. Currently, U.S. 10-year Treasury yields remain above 4.6%, while European bond yields barely reach the 3.6% area.

Source: TradingEconomics

The differential between both markets continues to favor dollar-denominated investments. The United States maintains a more attractive bond market, supported by a potentially more aggressive Fed, while Europe faces a more indecisive central bank and a less competitive bond yield.

This dynamic could continue to limit appetite for the euro in the short term. If the rate differential remains in place, EUR/USD could continue to face selling pressure over the next few trading sessions.

Is uncertainty becoming relevant? The week was also marked by important risk events for markets. On one hand, new escalations in the Middle East conflict pushed WTI crude oil above 90 dollars per barrel. On the other hand, new comments from the U.S. government pointed to a global tariff plan of up to 12.5% for several countries.

Both events have revived market concerns about a broader trade conflict and possible additional inflationary pressure. This combination could be affecting risk sentiment and driving flows toward safe-haven assets in the short term.

In this scenario, the behavior of the U.S. dollar is key. In previous months, the currency had already acted as one of the market’s main liquidity safe havens. During this week, that dynamic became evident again in the DXY index, which measures the dollar’s strength against its main peers.

As risks increased across markets, the DXY maintained consistent gains and moved back above the 101-point area, approaching the year’s highs again. This behavior reflects relevant demand for the dollar in an environment of greater uncertainty.

Source: TradingEconomics

The role of the U.S. dollar remains fundamental. If the market once again sees the currency as a liquidity safe haven, and risk events continue to generate uncertainty, demand for the USD could remain strong.

This would make a consistent recovery in the euro more difficult and could continue to generate selling pressure on EUR/USD over the next few trading sessions.

Technical forecast for EUR/USD Source: StoneX, Tradingview

Sideways range begins to emerge: Although the daily EUR/USD chart still maintains a major long-term bearish trend line, a short-term sideways range has also started to form. This range has an upper barrier near 1.14742 and a lower area around 1.13538. If selling pressure fails to stabilize consistently, this sideways structure could remain relevant over the next few trading sessions.
  RSI: Now, the RSI remains below the neutral 50 level, suggesting that selling impulses continue to dominate the average of the last 14 sessions. If this dynamic continues, the indicator could keep highlighting a relevant selling bias in EUR/USD over the next few sessions.
  TRIX: The TRIX also remains below the neutral 0 line, indicating that bearish strength in the exponential moving averages remains relevant. This reading reinforces the possibility that the selling bias could continue to be important in the short term.
  Key levels:

1.14742 – Relevant resistance: This recent weekly high coincides with the area of the 50-period simple moving average. Price movements above this level could start to put the bearish structure and current sideways range at risk, opening room for a more relevant buying bias over the coming weeks.
  1.14125 – Near-term barrier: This level corresponds to an important retracement area on the daily chart. If price fails to move consistently away from this reference, it could continue to highlight a phase of indecision and give more relevance to the current sideways channel over the next few sessions.
  1.13538 – Definitive support: This level corresponds to the 2026 low zone and represents the most important bearish barrier in the short term. Moves below this area would mark new relevant lows for the year and could reinforce a dominant selling bias, potentially extending the long bearish trend line over the coming weeks.
  Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25

ING’s Francesco Pesole expects the ECB to leave rates unchanged but deliver a hawkish hold, with Middle East tensions and rising European gas prices keeping hawks in control. He argues policymakers aim to preserve market pricing of around 45bp of tightening by year-end, likely via a familiar post-meeting media leak, which should support front-end Euro rates even as ING’s near-term EUR/USD bias remains tilted lower toward 1.1380.

"The ECB is widely expected to leave rates unchanged today, but a surprise hike cannot be fully ruled out."

"Our baseline is a hawkish hold. The re-escalation in the Middle East and European gas prices rising faster than oil prices should keep hawkish voices dominant in the governing council, in our view."

"The aim today could be – once again – to preserve market pricing (45bp by year-end) to limit the risk of inflation expectations de-anchoring."

"Achieving that may well require some indication that a September hike remains in play – more likely through a familiar post-meeting media leak than directly in the press conference."

"A central bank meeting would normally be a prime catalyst for EUR/USD to break out of its tight trading range, but we do not expect that to happen today. Our near-term bias remains tilted to the downside, as we believe FX markets are dangerously complacent about developments in the Gulf. Unless the newsflow becomes more constructive, we look for EUR/USD to slip towards 1.1380 in the coming days."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

The EUR/USD pair is seen consolidating during the Asian session on Tuesday and trading just above the 1.1400 mark, or a four-day low touched the previous day. Market participants seem hesitant and keenly await the highly-anticipated European Central Bank (ECB) meeting on Thursday before positioning for the next leg of a directional move.

In the meantime, energy-driven inflation fears bolster US Federal Reserve (Fed) rate hike bets and support the US Dollar (USD) amid escalating US-Iran tensions. This could act as a headwind for the EUR/USD pair, warranting caution before confirming that the recent pullback from a four-week high, touched last Wednesday, has run its course.

Spot prices keep a bearish tone following last week's failure near the 1.1480-1.1485 region, which coincides with the 200-period Simple Moving Average (SMA). Moreover, the Moving Average Convergence Divergence (MACD) indicator remains below zero with a negative reading, while the Relative Strength Index (RSI) at 40.95 stays under the midline.

Momentum indicators together suggest waning bullish momentum and reinforce the downside bias while the EUR/USD pair remains capped beneath the 200-period SMA. This, in turn, backs the case for an eventual break below the 1.1400 round figure and a further decline towards retesting the year-to-date low, around the 1.1325 region, touched on June 24.

On the topside, initial resistance is located at the 200-period SMA around 1.1480. A sustained move above this level is needed to ease the current bearish pressure and open the way for a more constructive outlook. Nevertheless, the sub-50 RSI and negative MACD suggest that the path of least resistance for the EUR/USD pair remains to the downside.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

EUR/USD 4-hour chart

Economic Indicator ECB Press Conference Following the European Central Bank’s (ECB) economic policy decision, the ECB President gives a press conference regarding monetary policy. The president’s comments may influence the volatility of the Euro (EUR) and determine a short-term positive or negative trend. If the president adopts a hawkish tone it is considered bullish for the EUR, whereas if the tone is dovish the result is usually bearish for the Euro.

Read more.

Next release: Thu Jul 23, 2026 12:45

Frequency: Irregular

Consensus: -

Previous: -

Source: European Central Bank

Summary:

EUR/USD traded near 1.1440 after recovering from recent lows, supported by expectations that the European Central Bank could raise interest rates again in September. The euro’s advance remains limited as escalating US-Iran tensions and oil prices above $90 increase safe-haven demand for the US dollar. EUR/USD must clear the 1.1470–1.1500 resistance zone to strengthen its recovery, while 1.1400 remains the first major support level. The EUR/USD exchange rate held near 1.1440 on Monday as traders weighed the prospect of another European Central Bank interest rate increase against renewed demand for the US dollar amid escalating tensions between Washington and Tehran.

The currency pair was trading around 1.1437 at the time of writing, having pulled back from last week’s high near 1.1480. The euro remains supported by expectations that the ECB will retain a hawkish bias at this week’s policy meeting, even though policymakers are widely expected to leave borrowing costs unchanged.

However, the dollar has regained some ground as the US-Iran conflict intensifies and disruption to oil shipments through the Strait of Hormuz pushes energy prices higher. Brent crude rose above $90 a barrel, reviving inflation concerns and strengthening the case for the Federal Reserve to maintain higher interest rates.

Why Is EUR/USD Rising Today? The euro has found modest support from changing expectations for ECB monetary policy.

The ECB is expected to keep its deposit rate unchanged at 2.25% when officials meet on Thursday. Nevertheless, a Reuters poll found that most economists expect another rate increase later this year, with September emerging as the most likely timing.

That outlook has become more credible following the renewed increase in energy prices. Eurozone inflation eased to 2.8% in June but remains above the ECB’s 2% target, while rising oil and gas costs threaten to create another wave of price pressure.

Consequently, the euro has retained support even as the ECB prepares to pause after its previous rate increase. Traders will pay close attention to President Christine Lagarde’s comments for any indication that September remains a live option.

Will the ECB Raise Interest Rates in September? A September rate increase is increasingly becoming the central question for the EUR/USD forecast.

Around 70% of economists surveyed by Reuters expect the ECB to raise rates once more before the end of 2026. However, policymakers must balance renewed inflation risks against a weak eurozone economy, which expanded by only 0.2% during the latest quarter.

The ECB’s challenge is that higher energy prices can simultaneously lift inflation and weaken economic activity. Businesses face higher operating costs, while households have less disposable income available for other goods and services.

A clearly hawkish message from Lagarde could help EUR/USD challenge 1.1500. Conversely, a more cautious tone that emphasises weak growth could encourage traders to reduce expectations for a September move and weigh on the euro.

How Are US-Iran Tensions Affecting EUR/USD? Escalating hostilities between the United States and Iran are preventing a stronger euro recovery.

The United States carried out a ninth consecutive night of strikes, while Iran warned that the Strait of Hormuz would remain unsafe for oil, gas and petrochemical shipments. Ship traffic through the strategically important waterway has declined sharply, contributing to Brent crude’s move above $90 and WTI’s rise beyond $84.

The development creates two headwinds for EUR/USD.

First, geopolitical uncertainty increases demand for the US dollar as investors move toward highly liquid safe-haven assets. Second, Europe is particularly exposed to imported energy costs, meaning a sustained oil shock could weaken the eurozone growth outlook even while forcing the ECB to keep monetary policy restrictive. The dollar has therefore remained resilient despite recent evidence that US inflation had begun to moderate. Markets are also pricing an increased possibility of another Federal Reserve rate rise before the end of the year.

EUR/USD Technical Analysis: Can the Euro Break Above 1.1500? The one-hour chart shows EUR/USD consolidating near 1.1437 after its retreat from the 1.1480 area. Price is hovering around the middle Bollinger Band near 1.1436, indicating that neither buyers nor sellers currently have firm control.

The Moving Average Convergence Divergence indicator is beginning to stabilise after turning negative during the latest pullback. However, momentum remains limited, suggesting that the pair may continue trading sideways unless a fresh fundamental catalyst emerges.

Immediate resistance is located between 1.1445 and 1.1470, where the upper Bollinger Band and recent intraday highs are concentrated. A sustained move above 1.1470 would expose the psychologically important 1.1500 level.

A close above 1.1500 would improve the short-term structure and could open a move toward 1.1580 and 1.1620.

On the downside, 1.1425 provides initial support near the lower Bollinger Band. The more important level is 1.1400, which has repeatedly attracted buyers. A decisive break beneath 1.1400 would weaken the recovery and bring 1.1375 back into focus, followed by 1.1320.

EUR/USD Outlook Ahead of the ECB Rate Decision The immediate EUR/USD outlook hinges on whether the ECB validates market expectations for another rate increase in September.

A hawkish policy statement could help the euro test 1.1470 and 1.1500, particularly if Lagarde signals that higher energy prices pose a material threat to inflation. However, the dollar is likely to remain supported while the US-Iran conflict disrupts energy markets and drives investors toward safety.

For now, EUR/USD appears caught between a more hawkish ECB outlook and a stronger geopolitical bid for the dollar. That leaves the pair vulnerable to further consolidation until Thursday’s ECB decision provides a clearer policy signal.

Why is EUR/USD rising today?

EUR/USD is finding support as investors expect the European Central Bank to retain a hawkish stance and potentially raise interest rates again in September. However, gains remain limited by safe-haven demand for the US dollar.

How will the ECB interest rate decision affect EUR/USD?

A hawkish ECB decision would likely support the euro by strengthening expectations for higher interest rates. A cautious statement focused on weak economic growth could weigh on EUR/USD and bring the 1.1400 support level back into focus.

The Euro to Dollar exchange rate is trading around 1.1440 after remaining relatively resilient through July, but HSBC expects renewed US Dollar strength to weigh on EUR/USD over the coming months.

HSBC argues that the recent Dollar recovery reflects a combination of resilient US growth, interest-rate expectations and the relative attractiveness of US assets.

The bank expects the Federal Reserve to remain cautious on easing policy, while the Eurozone faces weaker growth prospects and ongoing uncertainty linked to energy prices.

HSBC’s outlook is based on a view that the Dollar’s recent weakness will prove temporary as markets refocus on rate differentials and the strength of the US economy.

The bank highlights that geopolitical risks and higher energy prices remain particularly challenging for Europe, with renewed pressure on gas supplies posing a threat to Eurozone growth and inflation.

According to HSBC, the Euro’s recent resilience does not change the broader outlook, with the currency still vulnerable if investors return to favouring US assets.

The bank sees EUR/USD falling towards 1.10 as the Dollar gradually regains ground, with the widening contrast between US economic performance and European challenges expected to remain a key driver.

However, HSBC acknowledges that the path lower may not be straightforward, with periods of Dollar consolidation possible as markets continue to assess Federal Reserve policy and global risk conditions.

ING’s Francesco Pesole argues that the EUR/USD short-term rate differential is currently supporting the Euro as Gulf tensions rise, helped by a recovery in EUR front-end rates. However, he doubts this can last if Oil and Gas prices keep climbing, given limited scope for more ECB hikes and worsening eurozone terms of trade. ING warns that EUR/USD could risk a move toward 1.10 under higher energy prices.

Euro buoyed by rates for now"The EUR:USD short-term rate differential is – for now – helping to keep EUR/USD afloat in this Gulf re-escalation. The two-year swap rate gap has re-tightened around 15bp since the start of July, primarily because the rebound in oil prices happened at a time when ECB hike bets were dwindling, leaving more upside room to recover for EUR front-end rates."

"We aren’t convinced this rate gap can offer sustainable support to EUR/USD if energy prices continue to rise though."

"Markets may find it harder to price in more than two ECB hikes by year-end (now, 46bp) considering the less hawkish stance by ECB officials of late, and the medium-term negative implications of an energy crisis – combined with Fed tightening – for the EUR, tend to outweigh the positive of EUR hikes."

"The spike in gas prices is particularly concerning, as it weighs on the eurozone’s terms of trade more than oil."

"In a scenario where Brent returns to $90-100/bl and TTF around €55-60/MWh, a move to 1.10 becomes a tangible risk in EUR/USD."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)