Forecast & analysis
26th August 2025
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.
19th August 2025
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.
12th August 2025
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.
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.
