Currency pairs forecast: EURUSD

Trend bias:‍

August uptrend broken but support found on the 11th September low

Factors in price action:‍

Mainly USD driven on diverging voices amongst the Fed on the path of future rate cuts.

This week:

• Eurozone: EU CPI
• US: JOLTS, US shutdown deadline, ISM manufacturing and services and nonfarm payrolls

Key risks ahead:

• Given markets are firmly pricing in no more rate cuts by the ECB – sharp fall in CPI could spur on rate cut bets and weaken EUR
• If US shutdown averted then USD gains should continue and then attention will turn to the nonfarm payroll numbers on Friday. Is shutdown not averted then likely release of job numbers will be delayed and will likely pile pressure on USD

Trend bias:‍

Slightly bearish bias unless Eurozone data surprises on the upside, but with upside caps strong for now.

Factors in price action:

• Eurozone sentiment still under pressure from weak PMIs, trade concerns, and political risks (e.g. France).
• EUR/USD gains were tempered after USD fought back after Fed meeting suggesting perhaps have peaked pricing in Fed rate cuts

This week:

• Eurozone: Flash PMIs and ECB minutes this week to give insight into growth/inflation.
• US: GDP, Core PCE, plus Fed commentary to guide USD direction.

Key risks ahead:

• Strong US macro print could re-strengthen USD and press EUR/USD lower toward support.
• Dovish ECB or weaker Eurozone PMIs could add downside pressure on EUR/USD.

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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.