Currency pairs forecast: EURUSD

Trend bias:

Pair finished unchanged last week, continuing its rangebound trend

Factors in price action:‍

French politics has kept pressure on EUR but weak job numbers also putting pressure on USD

This week:

• Eurozone: ECB Interest Rate Meeting
• US: Inflation numbers in the form of PPI and CPI

Key risks ahead:

• No fireworks expected by the ECB and no rate change expected either. Big surprise would be a dovish tone in ECB statement to hint at future rate cuts. A move to the upside could be seen should we see a set of weak inflation numbers stateside to pile further pressure on rate cut bets and pressure USD

Trend bias:

Sideways, consolidating within a tight range

Factors in price action:

• EUR underpinned with French political risks
• USD undermined by rate cut expectations – more expected by the Fed than by the BoE this year.

This week:‍

EU CPI on Tuesday and US job numbers on Friday

Key risks ahead:

• Likely to see a bigger reaction on the EUR should the EU CPI numbers undershoot and thus raising the prospect of further rate cuts by the ECB this year – EUR weakness if this is the case
• Strong US job numbers should ease off rate cut expectations following last months lower revisions as well as boosting sentiment about the US economy

Trend bias:‍

Upside bias near term, but rallies likely capped by weak Eurozone growth backdrop.

Factors in price action:‍

The euro rallied over 1% last week as Powell opened the door to Fed easing but moves were given up after Fed Cook pushed back against Trumps calls for her to resign.

This week:

• Eurozone: Ifo sentiment (Mon) and ECB minutes (Thu). French and German CPI.
• US: Core PCE Friday remains key.

Key risks:

• Softer Ifo or dovish CPI numbers could limit euro upside.
• Hawkish surprise from Fed speakers or stronger US inflation data could reverse recent EURUSD gains.

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Trend Bias:‍

Sideways to slightly bearish, unless USD weakens materially

Factors in Price Action:

The euro remains stuck in ranges, with upside capped by sluggish growth dynamics. Moves are driven by the USD leg, as euro-area data continues to highlight external demand weakness.

This Week:

• Eurozone: Flash PMIs (Thu), Q2 wage data (Fri).
• US: FOMC minutes (Wed), Powell at Jackson Hole (Fri).

Key Risks Ahead:

• EUR: Soft PMI or wage prints could highlight euro-area stagnation.
• USD: A hawkish Powell or strong US data could drive another leg lower; dovish tilt would give EUR some relief.

Trend bias

EURUSD continues to grind higher, with momentum underpinned by speculative flows and technical breakouts.

Factors in Price Action:

The euro remains stuck in ranges, with upside capped by sluggish growth dynamics. Moves are driven by the USD leg, as euro-area data continues to highlight external demand weakness. The euro remains the market’s preferred way to express dollar bearishness, and fresh two-week highs were printed last week. Political developments in Europe have not dented sentiment, with EUR holding firm.

The USD remains under pressure after dovish-leaning comments from US Treasury Secretary Bessent and softer data trends. That said, upcoming Fed speakers and US data could provide a short-term challenge to the move.
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‍This week:

• Eurozone flash PMIs (Thursday) are the main test — softer prints could pause the uptrend.
• US PPI Ex Food & Energy (Tuesday) and Retail Sales (Friday) are key for the dollar.