Currency pairs forecast: EURUSD

Last week's key drivers:

• EUR/USD fell to a five-week low, down around 1.2% on the week, as the Dollar Spot Index posted its best weekly performance since mid-March
• US retail sales added 0.5% MoM in April — reinforcing higher-for-longer and driving USD strength
• ECB officials sent mixed signals — Stournaras and Kazaks flagged oil could force hikes; Vujcic said "everything depends on data." Uncertainty weighed on EUR

This week (Mon–Fri preview):

• Wednesday: Eurozone CPI final — expected to confirm 3.0% YoY; core at 2.2%. FOMC minutes (7:00 PM BST) — the key USD event of the week
• Thursday: Flash PMIs — eurozone composite seen at 48.7, remaining in contraction. US composite at 51.7 — divergence theme intact. ECB consumer confidence also due
• Friday: German IFO (84.2 expected); German GDP final (0.3% QoQ); University of Michigan sentiment

Key risks:

• A break below the April 9 low would wipe out a month of gains and signal a test of the next significant support.
• Hawkish FOMC minutes Wednesday would be the most significant near-term USD positive and likely catalyse the technical break
• Weak eurozone PMIs Thursday confirming the contraction picture would compound EUR pressure
• ECB speakers remaining divided on June hikes removes a key EUR support pillar
• Most likely direction: Lower. The pair is sitting just above a critical technical level with momentum clearly to the downside — a break below current support risks accelerating the move

Last week's key drivers:

• EUR/USD was largely USD-driven — oil's swing from above $115 to below $97 and back dictated haven flows more than any eurozone fundamental
• ECB confirmed a June hike was discussed "in depth" — providing a floor for EUR throughout the week's volatility
• US non-farm payrolls significantly overshot, delivering a firm USD recovery into the weekend close
• US military strikes on Iranian targets Thursday added a late-week geopolitical risk premium back into USD
• This morning, Trump rejecting Iran's peace proposal and fresh Gulf drone strikes have reasserted USD haven demand

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This week (Mon–Fri preview):

• Tuesday: US CPI — headline 3.7% YoY expected; core 2.7%. German ZEW also prints — forecast to deteriorate to -19.9
• Wednesday: Eurozone Q1 GDP second estimate — expected to confirm 0.1% QoQ. US PPI also due
• Thursday: US retail sales — expected to slow sharply to 0.5% from 1.7%. A weak reading is the clearest near-term USD negative
• Thursday/Friday: Trump-Xi summit — the week's biggest wildcard for broad risk sentiment

Key risks:

• Hot US CPI Tuesday is the single most important release — a significant upside surprise drives USD strength and tests key support
• Weak German ZEW could temper ECB June hike expectations — removing a key EUR support pillar
• Weak US retail sales Thursday would offset CPI strength and support the pair
• Trump-Xi summit — positive signals ease USD haven demand; a breakdown does the opposite
• Further Hormuz escalation overrides all data and drives USD sharply higher
• Most likely direction: Rangebound with modest downside bias. US CPI and the Trump-Xi summit are the week's defining events

This week's key drivers (Mon–Tue):

• EUR/USD has rallied to its highest level since late April, driven by broad USD weakness as US-Iran peace deal hopes reduced haven demand for the dollar
• The move has been USD-led rather than EUR-driven — the ECB does not yet see sufficient signs to warrant a rate hike, keeping a lid on outright EURbullishness
• The pair's resilience near recent highs reflects the broader structural USD weakness narrative — the Fed's most divided vote since 1992 and a deteriorating US data picture keep USD offered on rallies

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Rest of the week (Thu–Fri preview):

• Friday: US non-farm payrolls — unemployment expected at 4.4% with payrolls potentially at -15k. A significant miss deepens the Fed's stagflation dilemma and extends USD weakness; a beat provides USD relief and caps the pair

Key risks:

• Hormuz progress or setback remains the dominant macro wildcard — any breakdown in talks would quickly restore USD haven demand and pressure the pair lower
• Weak US payrolls Friday alongside sticky ECB wages would be the most EUR/USD positive outcome; the reverse combination would snap the recent move back sharply
• Most likely direction: Rangebound. Iran headlines are dominating in the near term — Wage Tracker Wednesday and payrolls Friday are the catalysts that determine whether the pair breaks out of the current range or retreats

Last week's key drivers:

• USD fell in four of five sessions — its fourth weekly decline in five — as weak US Q1 GDP, soft ISM manufacturing and sticky PCE painted an uncomfortable stagflation picture for the Fed
• The Fed's most divided vote since 1992 in holding at 3.75% reinforced dollar weakness — policy paralysis with inflation above target is a structurally bearish USD backdrop
• ECB held at 2.00% but Lagarde confirmed a June hike was discussed "in depth" — a hawkish signal that kept EUR well supported through the week
• Iran's Hormuz peace proposal drove risk-on flows, reducing the energy shock premium that had weighed on EUR and adding to the pair's upside momentum
• The combination of Fed paralysis and ECB optionality on June hikes creates a meaningful policy divergence in EUR's favour heading into this week

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This week (Mon–Fri preview):

• Wednesday: ECB Wage Tracker — the critical release for EUR this week. Easing wage expectations would temper June hike pricing and weaken EUR; sticky wages would cement the case for a ECB move and support the pair
• Friday: US non-farm payrolls — unemployment expected to rise to 4.4% with payrolls potentially at -15k versus a 60k consensus. A significant miss would extend USD weakness and push the pair higher; an upside surprise would provide USD relief

Key risks:

• ECB Wage Tracker Wednesday is the most important release for this pair this week — easing wages would meaningfully undermine the June hike case and trigger EUR selling
• Weak US payrolls Friday deepening the stagflation narrative would be the most EUR/USD positive outcome — Fed paralysis with a deteriorating labour market removes any USD support
• An upside payrolls surprise would be the sharpest near-term risk to the bullish view — markets are positioned for dollar weakness and a clean beat would trigger significant short covering
• Hormuz progress remains a background tailwind — further de-escalation reduces the energy shock premium and supports EUR relative to haven USD
• Most likely direction: Modestly bullish. Fed paralysis versus ECB optionality is the dominant theme. Wage Tracker Wednesday and payrolls Friday are the swing factors — weak US data alongside sticky ECB wages would extend the move; the reverse combination would snap it back

Last three days' key drivers (Mon–Wed):

• EUR/USD has fallen for three consecutive sessions and sits at its lowest level in two weeks, with USD haven demand overwhelming the ECBhawkish repricing narrative
• Oil surging 7% overnight Wednesday to around $126 on reports Trump is being briefed on potential military strikes against Iran has dramatically ratcheted up the geopolitical risk premium — USD haven bid is back in force
• EUR has proven more resilient than GBP in the current environment, though energy shock vulnerability for Europe remains a structural headwind
• German CPI printed at 2.9% YoY Tuesday — in line with expectations — providing a first read on Eurozone inflation ahead of Thursday's ECBdecision
• ECB rate hike expectations firmed to 69 basis points by year end, providing some EUR support, but the haven USD move has overpowered the rate differential story
• Fed held as expected; Powell's press conference Wednesday a key USDdirectional moment — any hawkish lean on energy-driven inflation persistence would add further pressure to the pair

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Rest of the week (Thu–Fri preview):

• Thursday: The defining day for this pair
  • Eurozone CPI expected at 3.0% YoY from 2.6%; core at 2.2% from 2.3% — a hot headline with softening core complicates the ECBpicture
  • ECB holds at 2.00%; Lagarde expected to keep June hike options open — a clear hawkish commitment would provide EUR with meaningful support
  • Eurozone Q1 GDP at 0.2% QoQ; German GDP at 0.1% — weak readings would undermine the ECB hike case
  • US Core PCE at 3.2% YoY and US Q1 GDP rebound to 2.0% — both USD positive on an upside surprise
• Friday: US ISM manufacturing (53.3 expected) and ISM prices paid (82 from 78.3) — a hot prices paid print would cement inflation concerns and support USD

Key risks:

• Hot US PCE alongside a weak Eurozone GDP print and cautious Lagardewould be the most bearish combination for the pair this week — key support would quickly come into focus
• A clear ECB commitment to a June hike combined with a dovish Powell lean would be the most supportive outcome for EUR and could stabilise the recent decline
• Oil at $126 and potential US military action against Iran remains the dominant wildcard — confirmed escalation would send USD sharply higher and override the data entirely
• Softening eurozone core CPI alongside weak GDP would materially undermine aggressive ECB hike pricing — if markets begin unwinding those bets, EUR faces a more sustained move lower
• Most likely direction: Downside bias into Thursday. The ECB/Fed and PCE/GDP combination will determine whether this is a temporary dip or the start of a more sustained decline — oil is the wildcard that could accelerate either outcome

Last week's key drivers:

• EUR/USD held near recent highs despite the eurozone bearing the brunt of the energy shock — defying expectations given Europe's import vulnerability
• Eurozone PMIs collapsed to 48.6; flagging stagflation risks; ECB officials increasingly split on whether to hike or look through the shock
• USD weakness mid-week on Trump's ceasefire extension kept the pair supported, though Iranian gunboat incidents repeatedly capped the dollar's decline
• This morning, Iran's Hormuz proposal has softened the dollar further — but the muted reaction underscores growing market fatigue with unresolved geopolitical headlines

This week (Mon–Fri preview):

• Tuesday: ECB Bank Lending Survey — a sharp credit tightening signal would reinforce the case for the ECB to hold its fire, a direct negative for EUR
• Wednesday: Fed holds; Powell press conference the key USD driver
• Thursday: The dominant day for this pair
  • ECB holds at 2.00%; Lagarde expected to flag June hike optionality
  • Eurozone Q1 GDP at just 0.2% QoQ; Germany at risk of 0.1%; core CPI expected to slip to 2.1%
  • US Core PCE at 3.2% YoY and US Q1 GDP rebound to 2.0% — both USD positive on an upside surprise
• Friday: US ISM manufacturing expected at 52.2 from 52.7

Key risks:

• Weak eurozone GDP and softening core CPI Thursday would undermine aggressive ECB hike pricing — a EUR negative if markets unwind those bets
• A hawkish Powell combined with hot PCE data would be the most bearish outcome for the pair this week
• Lagarde keeping June hike optionality alive alongside a cautious Fed would support the medium-term bull case
• Hormuz de-escalation would fade the dollar's haven premium and support the pair — but as this morning's reaction shows, the bar for a sustained geopolitical move is rising
• Most likely direction: Rangebound with two-way event risk. The ECB/Feddynamic Thursday is the defining moment of the week

Last three days' key drivers (Mon–Wed):

• EUR/USD has drifted lower through the week, losing ground on both Tuesday and Wednesday despite the broader dollar softening narrative
• US retail sales beat forecasts on Tuesday, reviving USD demand and driving the pair's sharpest daily decline of the week (-0.37%)
• German ZEW survey showed eurozone sentiment deteriorating sharply in April, reinforcing the view that the energy shock is weighing on the European growth outlook
• Options activity turned more cautious — one-week risk reversals widened to 66 basis points in favour of EUR puts, the most bearish short-term skew since April 13
• ECB officials guided dovishly: Stournaras said the bank "should wait"; Kazaks described the current stance as having the "luxury" of patience — both reinforcing a no-hike stance heading into next week's meeting
• Trump extending the Iran ceasefire on Wednesday initially softened the dollar, trimming earlier EUR/USD losses, but Iranian gunboats firing on Hormuzshipping quickly dampened the relief rally

Rest of the week (Thu–Fri preview):

• Thursday: Eurozone flash PMIs — critical ahead of next week's ECB meeting
  • Composite expected at 50.0 (from 50.7); services forecast to slip to 49.8; manufacturing at 50.8
  • US composite seen rising to 50.5; manufacturing expected at 52.5 — a potentially significant divergence
  • US initial jobless claims also due; consensus 210k vs 207k prior
• Friday: Consolidation expected; position squaring ahead of a weekend with unresolved Middle East risk

Key risks:

• Weak eurozone PMIs Thursday would cement expectations for no ECB hike at next week's meeting and push the pair lower.
• US PMIs printing above consensus simultaneously would amplify the divergence trade, putting further USDbuying pressure on the pair
• Conversely, resilient eurozone PMI data alongside a soft US reading should support the EUR
• The Strait of Hormuz situation remains the dominant wild card — any escalation would quickly restore safe-haven USDflows and override the data signal
• Most likely direction (Thu–Fri):Rangebound. The directional break will be determined by the relative PMIoutcome Thursday. Downside risk into ECB week if European data disappoints; medium-term upside case intact on a dollar turn

Last week’s key drivers

• Hormuz reopening drove the USD Spot Index to its lowest level since February 27.
• EUR gained from both USD weakness and hawkish ECB signals.
• Oil prices fell over 13%, easing inflation concerns and reducing safe-haven demand.
• The S&P 500 rose 1.4%, reflecting improved risk sentiment.

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The week ahead (Mon–Fri preview):

• Tuesday: US retail sales (1.3% expected) and German ZEW survey.
• Wednesday: Eurozone consumer confidence (-17.2 expected).
• Thursday: Flash PMIs — Eurozone at 50.0, US at 50.5. ECB speakers will guide direction.
• Friday: German Ifo and US Michigan sentiment.

Key risks

• Continued easing in geopolitical tensions supports EURUSD upside.
• Strong US data could trigger a USD rebound.
• Dovish ECB signals would cap EUR gains.
• Any renewed Hormuz disruption would quickly reverse risk sentiment and support USD.

Factors in price action:

• The euro rallied sharply mid-week as the ceasefire announcement triggered broad dollar weakness, with truce hopes lifting the pair despite firm US CPI data
• The collapse of weekend peace talks has created renewed uncertainty, though the pair has held near recent highs despite deteriorated market sentiment
• Hungary's pro-European opposition secured a landslide victory in Sunday's election, expected to unlock billions in EU funding and providing near-term support for the euro
• The ECB's more resilient rate cut outlook continues to underpin EUR, with Sleijpen's weekend warning that elevated oil prices will feed through to wages and broader prices adding to hawkish chatter

Rest of the week (Mon–Fri preview):

Key data ahead:

• Monday: US Existing Home Sales (Mar) — consensus 4.08m vs. prior 4.09m
• Tuesday: US PPI Final Demand MoM (Mar) — consensus 1.2% vs. prior 0.7%; PPI Ex Food and Energy MoM — consensus 0.5% vs. prior 0.5%
• Wednesday: French CPI EU Harmonised YoY (Mar F) — consensus 1.9% vs. prior 1.9%; French CPI YoY (Mar F) — consensus 1.7% vs. prior 1.7%; US Empire Manufacturing (Apr) — prior -0.2; Import Price Index MoM (Mar) — prior 1.3%
• Thursday: Eurozone CPI YoY (Mar F) — consensus 2.5% vs. prior 2.5%; CPI Core YoY (Mar F) — consensus 2.3% vs. prior 2.3%; US Initial Jobless Claims (Apr 11) — prior 219k; Philadelphia Fed Business Outlook (Apr) — prior 18.1; Industrial Production MoM (Mar) — consensus 0.1% vs. prior 0.2%

Middle East developments:

• US-Iran peace talks broke down over the weekend, with Trump ordering a naval blockade of the Strait of Hormuz beginning Monday morning, sending oil prices surging over 8%
• Iran has condemned the blockade as piracy
• The UK and France will co-host a summit this week on protecting Strait of Hormuz shipping
• Russia has offered to take in Iran's enriched uranium as part of any potential peace deal
• If a ceasefire is eventually secured, the inflation spike may increasingly be viewed as temporary, potentially allowing the Fed to resume rate cuts from September

Key risks ahead:

• The pair is caught between two opposing forces — EUR benefits from a more resilient ECB rate cut outlook, but faces headwinds from renewed USD haven demand following the breakdown of peace talks
• Thursday's Eurozone final CPI, expected to confirm 2.5% YoY, is the key data point for the pair this week — any upside surprise would further reduce ECB rate cut expectations and provide EUR with additional support against USD
• Tuesday's US PPI printing above expectations could add to dollar strength and cap the pair near current levels
• Most likely direction: rangebound with two-way risk — de-escalation or a CPI upside surprise would favour EUR; a persistent Hormuz blockade and firm US data would reinforce USD strength

Factors in price action:

• The US-Iran ceasefire triggered a sharp unwind of safe-haven dollar flows on Wednesday, with the Bloomberg Dollar Spot Index erasing its entire 2026 gain
• This morning, ceasefire optimism has faded with Iran accusing the US of breaching the agreement, causing Treasury yields to stabilize and oil prices to edge higher

Rest of the week (Thu–Fri preview):

Key data ahead:

• Thursday: US personal income and spending (Feb), PCE inflation (headline 2.8% YoY, core 3.1% YoY prior), jobless claims (202k prior), and Q4 GDP third estimate (0.7% prior)
• Friday: German CPI final readings (2.7% YoY expected) and US CPI (headline 2.4% YoY, core 2.5% YoY prior)

Middle East developments:

• The two-week ceasefire remains fragile, with Iran accusing the US of breaching the agreement just hours after the deal was announced
• EU Economy Commissioner warned Thursday that the EU risks stagflation due to the Iran war, with growth potentially 0.2-0.4 percentage points lower than projected

Key risks ahead:

• Ceasefire breakdown would reverse Wednesday's gains sharply as safe-haven flows return to the dollar
• Hotter US inflation data (especially Friday's CPI) could support the dollar and pressure the euro back lower

Factors in price action:

• Pair consolidating in a tight range as traders focused on Iran ceasefire negotiations and Trump's Tuesday deadline
• Dollar weakness on ceasefire hopes provided temporary support, with EUR/USD rising 0.3% on Monday
• Eurozone sentiment collapsed—Sentix investor confidence plunged to -19.2 in April from -3.1 in March, the lowest in a year, as the Iran war dampened recovery prospects
• Friday's strong US jobs report (178,000 payrolls) eliminated Fed easing bets, providing structural USD support

Rest of the week (Tue–Fri preview):

Key data ahead:

• Tuesday: Final March PMIs—Eurozone Services 50.1, Composite 50.5; France Services 48.3, Composite 48.2; Germany Services 51.2, Composite 51.9; US Durable Goods Orders
• Wednesday: German Factory Orders (+2.0% vs -11.1% prior—critical rebound signal); US MBA Mortgage Applications
• Thursday: German Industrial Production (+0.6% vs -0.5%); US Core PCE (0.4% MoM, 3.0% YoY); Personal Income/Spending; Initial Jobless Claims; Q4 GDP revision
• Friday: Final German CPI (1.1% MoM, 2.7% YoY); US CPI (1.0% MoM, 3.4% YoY—major risk event); University of Michigan Sentiment
• Middle East: Trump's Tuesday 8pm ET deadline for Iran to reopen Strait of Hormuz or face infrastructure destruction

Key risks ahead:

• Geopolitical binary risk dominates: Iran deadline failure could trigger USD safe-haven bid and oil price spike, pressuring EUR given energy import vulnerability
• Eurozone sentiment crash (Sentix -19.2) signals deteriorating growth outlook; weak German factory/production data would compound EUR downside
• Friday's US CPI expected to surge to 3.4% YoY (from 2.4%), likely driven by energy prices—hot print reinforces hawkish Fed, supporting USD
• High energy prices expected to show up in March US inflation data, creating upside risk to consensus
• German data rebound (Factory Orders +2.0%, Industrial Production +0.6%) critical to stabilize EUR; disappointment would accelerate downside

Most likely direction:

• Downside bias toward the March low if Iran escalates and US CPI prints hot; upside limited to the March 10^th high even with ceasefire given weak Eurozone fundamentals

Factors in price action:

• Dollar safe-haven unwind: The dollar fell versus all major currencies as President Trump said the US could exit the Iran war within two to three weeks, reducing safe-haven demand.
• ECB hawkish support: Markets still price 63 basis points of ECB rate increases by year-end, contrasting with expectations for Federal Reserve cuts if the Iran conflict ends. This policy divergence supports the euro.
• Oil price decline: Brent crude fell below $100 per barrel on de-escalation hopes, easing inflation pressures and supporting expectations for Fed rate cuts.
• Risk sentiment improvement: Stocks surged and volatility declined as war-risk premiums were priced out, benefiting the euro over the dollar.

Rest of the week (Thur–Fri preview):

Key data ahead:

• ‍Thursday: US trade balance expected to widen to -$59.4 billion in February from -$54.5 billion. Weekly jobless claims forecast at 212,000, with continuing claims rising to 1.833 million.‍
• Friday: Critical US employment report expected to show 60,000 jobs added in March, rebounding from February's -92,000 decline. Unemployment rate forecast to hold at 4.4%. Eurozone industrial production expected to decline 0.1% month-on-month in February. US services and composite PMI final readings also due.‍
• Middle East developments: Near-term direction hinges on whether de-escalation holds. A genuine ceasefire would benefit EURUSD

Key risks ahead:

• Downside risks for euro: If Friday's US jobs data significantly beats expectations, dollar strength could return. If Middle East tensions re-escalate or Trump's address disappoints, safe-haven flows could reverse recent euro gains.
• Upside risks for euro: Weak US employment data or accelerated Iran de-escalation would support further euro gains. ECB maintaining hawkish stance while Fed turns dovish reinforces upside.

Most likely direction (Thu-Fri):‍

• Modest consolidation or slight euro strength expected. The pair has upside bias with resistance near 4^th March and 10^th March highs.

Factors in price action:

• Iran war is the dominant driver, keeping dollar supported through elevated oil prices and risk aversion. Euro particularly vulnerable given Europe's energy dependence.

This week (Mon–Fri preview):

• ‍Monday, March 30: Fed Chair Powell speaks at Harvard (10:30 AM ET). Light data calendar.‍
• Tuesday, March 31: Eurozone March CPI flash estimate expected to jump to 2.6% - the biggest increase since 2022, driven by energy costs.‍
• Thursday, April 2: US Retail Sales data will test consumer resilience. Bank of Japan releases Policy Summary of Opinions.‍
• Friday, April 3: US March Jobs Report - the week's critical release. Non-Farm Payrolls and Unemployment Rate will signal job market strength and influence Fed policy expectations.

Key risks ahead:

• Hot eurozone inflation Tuesday could trigger hawkish ECB commentary, providing temporary support. However, energy shock fundamentals favor continued euro weakness.
• Strong US jobs data Friday would reinforce dollar strength.
• Main upside catalyst remains Middle East de-escalation, which would remove dollar's energy tailwind and allow euro recovery.

Trend bias:

• Downward trend with EUR under pressure from dollar strength and energy shock concerns
• Euro fell to its lowest level since August on 13 March
• Modest recovery on Thursday 19 March following hawkish ECB tone, though gains limited

Factors in price action:

• Surging energy prices and widening Middle East conflict dragging euro lower
• ECB held rates with markets now pricing more than 50 basis points of tightening this year
• Two ECB rate hikes are part of the baseline scenario, according to ECB Governing Council Member Gabriel Makhlouf
• Dollar strength driven by elevated oil prices, hawkish Fed positioning, and safe-haven flows
• Euro longs have remained sticky despite conflict being clearly supportive of the dollar, pointing to more downside as positioning adjusts
• Europe's energy shock feeds straight into inflation expectations, but this is externally driven and growth-negative

This week (Mon–Fri preview):

• Monday: EUR Consumer Confidence expected to weaken to -14.6; US Chicago Fed Activity Index and Construction Spending
• Tuesday: Eurozone PMIs forecast to decline (Manufacturing 49.3, Services 50.5, Composite 50.5); US PMI data also due
• Wednesday: German IFO indicators anticipated to weaken significantly (Business Climate from 88.6 to 86.3); US Import Prices and Current Account Balance
• Thursday: German GfK Consumer Confidence, Eurozone confidence indicators, M3 Money Supply; US weekly jobless claims
• Friday: Geopolitical risk positioning ahead of weekend; continued focus on energy prices and Middle East developments

Key risks ahead:

• EURUSD downside risks: Continued dollar strength from geopolitical tensions and elevated oil prices; weak German economic data (IFO deterioration); conflict in Middle East keeps downside risks in play; positioning adjustment as euro longs unwind
• EURUSD upside risks: ECB hawkish repricing with April hike risk supporting euro; de-escalation in Middle East conflict; weaker US data
• Most likely direction: Lower - dollar likely to extend gains as war persists and Fed appears hawkish; euro trapped between oil shock and growth concerns despite hawkish ECB pivot; scope for dollar to extend gains further

Factors in price action:

• Surging energy prices and widening Middle East war dragging euro lower
• Euro fell to 1.1467 versus dollar on March 13, lowest level since August
• 14-day RSI in oversold territory with March low at 1.1507 acting as near-term support
• Fed's hawkish hold signaling only one cut provided anchor for dollar strength
• Oil trading around $100 a barrel compounding pressure on energy-importing eurozone

This week (Thurs–Fri preview):

• ECB decision Thursday expected to hold deposit rate at 2%
• Real action lies in updated staff projections and how President Lagarde frames the rate path
• Markets now price more than 50 basis points of ECB tightening this year
• Hawkish guidance could bring relief to euro if it materializes

Key risks ahead:

• Euro and expected to continue underperforming as Middle East war weighs on energy-importing nations, according to Standard Chartered
• Break below November low at 1.1491 would open path to further downside
• ECB's inflation projections will have limited value as cut-off date likely preceded the war
• Most likely direction: continued weakness unless ECB delivers unexpectedly hawkish guidance to counter oil-driven inflation fears

Factors in price action:

• Oil price surge adding inflation pressure to energy-dependent Europe
• Euro down approximately 2% since Iran conflict began
• Dollar climbed to highest level this year on Friday as haven demand and oil prices surged

This week (Mon–Fri preview):

• ECB decision March 19: expected to hold rates unchanged
• Fed meeting March 17-18: expected to hold and maintain wait-and-see stance
• War with Iran and its impact on oil prices will remain key factors shaping investor sentiment
• Geopolitics and ECB path will shape direction

Key risks ahead:

Further energy price increases could drive euro lower as Europe faces negative supply shock. Oversold conditions suggest potential technical rebound before further downside. ECB dovish tilt could accelerate weakness. FX volatility has jumped to eight-month high. Most likely direction: continued downside pressure with potential for tactical rebounds from oversold levels.

Factors in price action:

• EUR initially gained as G7 and IEA interventions calmed oil prices and eased inflation fears.
• ECB rate expectations remain cautious, initial hawkish pricing unwinding as energy prices ease.
• USD firmed slightly after CPI prints.

This week (Thu–Fri preview):

• EUR: France CPI (final Feb) — headline inflation key for market positioning; German data also relevant for ECB guidance.
• USD: Core PCE, PCE, Durable Goods, GDP Price Index — watch for flow into safe-haven USD.

Key risks ahead:

• USD surprises → EURUSD lower.
• Energy price volatility → EUR sensitivity.
• ECB commentary → directional bias.

Factors in price action:

• EUR weakness accentuated by geopolitical risk and surging oil prices, with markets wary of ECB’s ability to normalise policy aggressively.

• USD safe-haven demand and stronger US ISM data pushed EURUSD lower.

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This week (Mon–Fri preview):

• Eurozone: French and German CPI, German factory orders — influence EUR sentiment.

• US: Core PCE, GDP, durable goods, personal consumption, JOLTS — key for USD flows and EUR/USD direction.

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Key risks ahead:

• Energy-driven inflation or renewed Middle East tensions → USD bid → EURUSD lower.

• Eurozone data surprises → EUR supported temporarily.

• Safe-haven demand remains dominant driver.

Factors in price action:‍

• EUR softened early in the week due to risk-off flows and high energy costs, with Germany and Eurozone activity under scrutiny.
• USD strength driven by US data (ISM, oil-driven inflation risk) pushed EURUSD to multi-week lows.

This week (Thu–Fri preview):‍

• Eurozone: GDP final 4Q and German factory orders — gauge Q4 growth.
• US: Payrolls, unemployment, retail sales — will influence USD flows and EURUSD direction.

Key risks ahead:‍

• Strong US data → USD rally → EURUSD lower.
• Downside Eurozone surprises → EUR weaker.
• Geopolitical or energy shocks → safe-haven USD flows → EUR capped.

Factors in price action:‍

• EUR softened on USD strength and risk-off flows tied to US-Iran tensions.

• German sentiment remained weaker, while Eurozone PMIs and wage growth supported a stabilising tone.

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This week (2–6 Mar):‍

• Eurozone: February CPI, unemployment, and PMIs — gauge inflation credibility and ECB policy expectations.

• US: February nonfarm payrolls, unemployment, retail sales — drive USD flows and influence EURUSD direction.

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Key risks ahead:‍

• Strong US labour/retail data → USD strengthens → EURUSD lower.

• Eurozone CPI above expectations → EUR supported → EURUSD higher.

• Risk-off sentiment → USD safe-haven flows → EUR capped.

Factors in price action:

• EUR softened amid stronger US economic releases and persistent risk-off sentiment.

• German sentiment remained weaker, and ECB leadership uncertainty weighed on EUR, though stable wage growth and PMIs provided some support.

• Market attention is on Eurozone CPI and February national inflation prints to gauge ECB policy direction.

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This week (23–27 Feb):

• Eurozone: Final CPI (1.7% YoY, core 2.2%), national inflation data from France and Germany, HCOB/flash PMIs — track activity and inflation trends.

• US: Durable goods, factory orders, consumer confidence, regional Fed surveys, weekly jobless claims, PPI — drive USD direction and EURUSD moves.

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Key risks ahead:‍

• Strong US data → USD firm → EURUSD lower.

• Eurozone inflation or PMI surprises → EUR supported.

• Geopolitical or tariff-related risk-off flows → USD safe-haven strength → EUR capped.

Factors in price action:

• EUR steadied initially due to holiday-thinned liquidity, then softened on stronger US data and rising geopolitical risk.

• Weak German sentiment weighed on EUR, contributing to a multi-day EURUSD slide.

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This week (Thu–Fri preview):

• Eurozone: HCOB flash PMIs — track activity and inflation trends.

• US: Core PCE, GDP, PMIs — drive USD sentiment and EURUSD direction.

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Key risks ahead:‍

• Strong US data → USD strength → EURUSD lower.

• Eurozone PMIs above expectations → EUR supported.

• Risk-off sentiment → USD safe-haven demand → EUR capped.

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Factors in price action (Mon–Wed):

‍• USD fell Monday–Tuesday on weaker retail sales and guidance, then rebounded Wednesday after a stronger-than-expected January payrolls report and lower unemployment.

This week (Thu–Fri preview):

‍• Eurozone: Trade data (Fri) — US tariffs may weigh on exports; potential diversion of Chinese shipments provides a partial offset.
• US: Jan CPI (Fri) — critical for near-term USD and risk sentiment.

Key risks ahead:

‍• USD strength post-CPI → EURUSD lower.
• Euro-area trade surprises → EUR supported temporarily.
• Broader risk-off → USD safe-haven bid → caps EUR upside.

Underlying trend:

‍Neutral-to-mild upside — EUR supported by USD corrective moves, but euro-area growth and US tariffs weigh.

Factors in price action:

‍• Last week, USD gains early in the week were capped by intervention speculation and risk-off flows.
• EUR remained under pressure from ongoing disinflation, modest ECB hawkishness, and the looming impact of US tariffs on European exports.
• Euro-area CPI continued to ease, reinforcing expectations that ECB will remain cautious.

This week (9–13 Feb):

‍• Eurozone: Trade data likely to reflect US tariff impact and possible Chinese shipment diversion.
• US: Jan Jobs Report (Wed) and Jan CPI (Fri) remain the main drivers for USD, indirectly influencing EURUSD.
• ECB communication expected neutral, with no policy changes scheduled.

Key risks ahead:

‍• Strong USD via robust US payrolls → EURUSD lower.
• Euro-area trade surprise or USD softening → EURUSD higher.

Underlying trend:

‍Two-way — USD stabilisation offsets disinflation-driven EUR headwinds.

Factors in price action:

‍• EUR benefited from last week’s broad USD selloff driven by intervention speculation and risk aversion.
• Late-week USD rebound reversed some gains, particularly after Warsh’s nomination and firmer US PPI.
• Euro-area growth data surprised positively, but EUR still underperformed on Friday amid USD strength.
• Markets remain sensitive to any ECB discomfort with current EURUSD levels, following comments last week.

This week (2–6 Feb):

Eurozone:‍

– January inflation expected to dip further below 2% on energy base effects.
– Core inflation likely remains sticky.
– ECB expected to hold rates and maintain a neutral tone.

US:

‍– Payrolls and ISM manufacturing drive USD direction.
– Labour softness vs hawkish Fed repricing is the key tension.

Key risks ahead:

‍• Clear downside inflation surprise → reinforces ECB easing path → EURUSD lower.
• ECB rhetoric pushing back on EUR strength → caps rallies.
• Weak US labour data → USD downside resumes → EURUSD higher.

Underlying trend:

‍Two-way with headline risk — USD weakness supports EUR, but Greenland issue still remains

Factors in price action:

‍• Broad USD weakness linked to potential US–Japan FX coordination has provided near-term EUR support.
• Euro-area growth remains fragile, limiting the region’s ability to absorb external shocks.
• ECB remains in wait-and-see mode, offering little immediate policy insulation from geopolitical risk.

This week (26–30 Jan):

‍• Eurozone: Preliminary Q4 GDP and confidence indicators.
• US:  Fed meeting the highlight with rate expected to be unchanged
• Trade and geopolitical headlines likely to dominate intraday price action.

Key risks ahead:‍

• Stabilisation in USD/JPY or pushback on intervention talk → USD rebounds → EURUSD lower.
• Continued FX-intervention speculation + weak US data → USD softness persists → EURUSD supported.
• Escalation in trade or geopolitical risk → volatility rises, EUR likely underperforms defensively..

Trend bias:‍

Downside risks building — EUR vulnerable to political and trade-driven headlines.

Factors in price action:‍

• Trump’s renewed tariff threats on the EU over Greenland reintroduce trade uncertainty, weighing on EUR sentiment.
• Euro-area macro outlook remains subdued, limiting the region’s ability to absorb external shocks.
• ECB firmly in wait-and-see mode, offering little policy backstop against geopolitical risk.
• USD benefits from risk-off flows as markets reassess global trade stability.

This week (19–23 Jan):

‍• Eurozone: Flash PMIs (Fri) — manufacturing stabilisation remains the key focus.
• US: Core PCE inflation numbers (Thur) expected to show firm but easing inflation – may not more the needle too much
• Trade headlines likely to overshadow second-tier data.

Key risks ahead:‍

• Further tariff escalation rhetoric → EUR underperforms → EURUSD lower.
• PMI upside surprise → temporary EUR relief.
• Broader risk-off environment → USD strength dominates.

Underlying trend:‍

Rangebound — EUR supported by relative stability, but lacking catalysts without a USD trigger.

Factors in price action:

‍• Euro-area disinflation remains intact, reinforcing expectations for ECB cuts later in 2026.
• ECB messaging remains cautious and backward-looking, limiting volatility.
• USD demanded clouded by “Sell America” theme returning.

This week (12–16 Jan):

‍• Eurozone: Final December CPI prints and industrial production data.
• US: December CPI the key release; retail sales later in the week offer secondary confirmation on demand.
• ECB speakers continue but unlikely to challenge the broader policy path.

Key risks ahead:

‍• Softer US CPI → USD selling → EURUSD higher.
• Upside inflation surprise → USD strength → EURUSD lower.
• Weak euro-area data caps EUR rallies.

Trend bias:

‍Rangebound with a mild upside bias — EUR supported by relative stability, but USD data dominates.

Factors in price action:

‍• Eurozone outlook remains steady after disinflation progress late last year.
• ECB firmly in wait-and-see mode early in 2026, limiting policy volatility.
• USD direction driven by US job data and ISM surveys rather than inflation.

This week (5–9 Jan):

‍• Eurozone: December CPI – focus on whether disinflation progress continues
• US: ISM services and December job numbers towards the end of the week will set the tone for USD. Fed speakers return, though unlikely to materially shift near-term pricing.

Key risks ahead:

‍• Weak US jobs report → USD selling → EURUSD higher.
• Job resilience → USD strength → EURUSD pressured.
• Risk-off tone → EUR underperforms USD but holds vs high-beta FX.

Trend bias:‍

Two-way — EUR supported by stabilisation hopes, but USD job data dominates.

Factors in price action:

‍• Flash PMIs will be watched closely for signs of manufacturing stabilisation in the euro area.
• ECB expected to hold rates, with forecasts in focus rather than policy changes.
• USD volatility driven by the November jobs report, particularly the unemployment rate.
• Broader risk sentiment likely to swing on job-market perceptions rather than inflation.

This week:

‍• Mon: Euro-area industrial production.
• Tue: Eurozone flash PMIs; US nonfarm payrolls (Nov).
• Wed: Germany Ifo survey; Fed speakers.
• Thu: ECB policy decision (hold expected); US jobless claims and US CPI
• Fri: US existing home sales.

Key risks ahead:‍

• PMI improvement → EUR support → EURUSD higher.
• Weak US job data → USD selling dominates → EURUSD upside.
• Hawkish ECB forecasts or tone → EUR firmer.
• Strong US job resilience → USD strength → EURUSD lower.

Trend bias:

‍Two-way but slightly EUR-positive — Eurozone data is stabilising while USD faces heavy Fed risk.

Factors in price action:

• Markets focused in on what the Fed policy will be in a post Powell Federal Reserve, with likely successor to be a dove, causing a broad weaker USD
• EUR supported on data supporting that the ECB will likely not cut rates any further.

This week:

Eurozone:

• Germany Industrial Production (Oct): expected +0.4% MoM after last month’s strong rebound; upside possible.
• Germany trade data: softer exports but a larger surplus

US:‍

• FOMC (Dec 10): expected 25 bp cut but Powell likely keeps January as a live meeting.
• Weekly jobless claims (Thu) remain important for trend confirmation.

Key risks ahead:‍

• Strong German IP or upbeat trade → EUR support.
• Hawkish Powell → USD firmer → EURUSD lower.
• Weak US jobs/claims + dovish tone → USD softens → EURUSD higher.

Trend bias:

‍Mild support — EUR can grind higher with USD lacking direction.

Factors in price action:

‍• Fed leaning toward a 25 bp cut on 10 Dec, with last week’s weak Beige Book labour signals doing the heavy lifting.
• Possible appointment of Kevin Hassett as next Fed Chair emboldened dovish pricing on Fed rates.

• Moves to end Russia/Ukraine war supported EUR

This week (1–5 Dec):

‍• Euro-area: CPI, wages, unemployment — the key drivers for EUR tone.
• US: ISM + ADP + claims, but none seen as decisive for the Fed.

Key risks ahead:

‍• Above-consensus EUR CPI or wages → EUR gains vs G10.
• Weak euro-area data + risk-off → EUR pressured vs USD and safe havens.
• Fed expectations shifting sharply → broad USD volatility influencing EUR.

Trend bias:

‍Downside bias — GBP remains the weaker leg unless eurozone inflation undershoots materially.

Factors in price action:

‍• GBP continues to trade heavy amid UK fiscal uncertainty and soft demand data.
• EUR has a busy week of domestic inflation and sentiment inputs, giving it relative stability vs GBP.
• Cross continues to follow the relative data surprise model: weak UK + steady EU → GBPEUR lower.

This week (24–28 Nov):

‍• Budget focus: Chancellor Rachel Reeves faces a major credibility test — with income-tax hikes reportedly ruled out, reliance on smaller revenue measures may not fully reassure markets.
• Eurozone: German, French, Spanish, Italian inflation; German Ifo; Lagarde & Lane speeches.

Key risks ahead:

‍• Strong euro-area CPI → GBPEUR lower.
• Reeves fails to deliver a credible fiscal path → sustained GBP underperformance..

Our view:

‍GBPEUR trades vulnerable going into budget backdrop and the fallout will likely determine future direction of the pair

Trend bias:‍

Mildly bearish — EUR still constrained by weak momentum and political uncertainty, but with room for short-covering if USD softens.

Factors in price action:

‍• EUR has been reacting to European political noise and concerns about sticky services inflation.
• The dollar leg remains dominant, especially with Thursday’s NFP release reintroducing a meaningful US data driver.

This week:

‍• Eurozone final HICP (Oct) to clarify what drove the rise in services inflation.
• ECB negotiated wage indicator (Q3) gives insight into wage pressures.
• Eurozone Flash PMIs to gauge early Q4 activity.
• US: NFP (Thu 20 Nov) could be a major volatility catalyst after weeks of relatively light US data.

Key risks ahead:

‍• Sticky eurozone services inflation or stronger wage settlements could support EUR.
• Weak PMIs or renewed European political noise would weigh on EURUSD.
• A soft NFP could reawaken USD selling; a strong NFP would reinforce EURUSD downside.

Our view:

‍EURUSD likely trades in a wide range driven by euro-area inflation/wage specifics and the NFP volatility burst. Direction hinges on NFP’s impact on the USD leg.

Trend bias:

‍Slightly bearish to neutral with the paid in a gradual 2 month downtrend

Factors in price action:‍

Political noise in Europe plus tepid growth momentum has kept EUR on the back foot; moves will be sensitive to headlines.

This week

• EUR: Second estimates of growth and job data due on Friday but unlikely to have a big impact unless we have a big deviation.
• USD: Waiting to see if US government shutdown is going to end which could then allow for key CPI and job data

Key risks / scenarios:

• We will likely need to see a big deviation from the first estimates see a big move on the pair. An end to the US government shutdown should lift the pair on improved risk appetite.

Trend bias:‍

Moderately bearish-to-neutral — USD strength has been the driving factor in the current trend

Factors in price action:

• The euro-area GDP flash shows very modest growth of +0.2 % in Q3 for the euro-zone, signalling soft momentum.
• USD firmed up following hawkish rate cut last week which eased the number of rate cuts expected by the Fed over the next 12 months

This week (3–7 Nov):

• ADP will release a weekly private payrolls report which will give some gauge of how the US job market is faring,

Key risks ahead:

• The absence of the usual key data points due to the government shutdown means that the ADP weekly private numbers will have a larger bearing on the pair and anything to suggest the job market is doing well could see the pair test the July/August lows.

Trend bias:‍

Bearish to neutral — downside pressure still intact but the risk of retracements increases if USD weakens.

Factors in price action:‍

• The EUR remains supported by the ECB’s cautious tone and lingering inflation concerns, even as eurozone growth slows.

•  USD demand in general picking up as markets ease the number of rate cuts over the next 12 months

This week (27–31 Oct):‍

• Eurozone: On Thursday: ECB rate decision, Q3 preliminary GDP, unemployment, consumer confidence and CPI prints
• US: Fed expected to cut rates by 25 bps on Wednesday which is fully priced in by markets. Language for future policy will be in focus as well GDP numbers at the end of the week

Key risks ahead:‍

• Weak eurozone growth or inflation numbers would add downside pressure.
• A hawkish Fed surprise or resilient U.S. data could drag EURUSD lower.

Trend bias:

‍Slightly bearish (or neutral-tilted) — EUR is under pressure, but may find limited support if risk sentiment stabilizes.

Factors in price action:

‍• EUR remains vulnerable to European political spillovers (especially in France) and weaker macro signals. S&P Global
• The flash PMIs at week’s end will be especially watched for confirmation of eurozone momentum. S&P Global

This week (20-24 Oct):

‍• Eurozone: Flash PMI (Friday) will be a key input into growth momentum.
• Other: With focus shifting to inflation and PMIs, EURUSD may be more reactive to surprises than sustained trend drivers.

• September’s long awaited US CPI numbers are due on Friday.

Key risks ahead:

‍• A weak eurozone PMI print or negative sentiment surprise could worsen EURUSD downside.
• A stabilising risk tone or broad USD pullback might allow some rebound towards prior highs
• Any European political jolt or fiscal surprise could unsettle EUR.
• Volatility will likely pick up into the flash PMI release — positioning risks are higher.

Trend bias:‍

Bearish bias — with rally attempts capped and new 2 month low made

Factors in price action:‍

• EUR dragged lower by political stress: France PM resignation undermines euro zone credibility.
• USD strength as markets digest global political developments and US macro data.

This week (13–17 Oct):

• ‍EU: CPI data, ECB commentary.‍
• US: Very light on data this week — USD moves likely driven by external risk flows rather than fresh macro prints.

Key risks ahead:

A soft eurozone CPI could add pressure on EUR

Any global risk event or geopolitical development that favours the USD could exacerbate EURUSD weakness

‍

Trend bias:‍

Consolidating following breakdown of the Aug – Sep uptrend.

Factors in price action:‍

Investor morale in the euro continues to be relatively strong following CPI prints last week that back the markets call that they do not expect any rate ECB rate cuts over the next 12 months. the U.S. government shutdown has led to a delay in key economic data releases, contributing to market uncertainty resulting in USD weakness

This week:

• Eurozone: ECB Minutes
• US: Fed Minutes

Key risks ahead:

• It would need a dovish minutes to see EUR sentiment weaken.
• Delays in U.S. economic data releases may prolong market uncertainty and volatility

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.

‍

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.

‍

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.
‍

‍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.