EUR/USD Holds Key Ground as Markets Weigh Rates and Trade Headlines
Euro steady around 1.1400 zone amid Fed policy signals and trade reprieve
Today, EUR/USD finds itself perched in a tense yet intriguing zone, flirting with the 1.1400–1.1700 range as markets digest mixed inflation data and renewed clarity on trade tensions. This pair, central to the Forex sector, is drawing intense attention as investors await the next moves from central banks and Washington.
A fresh EUR/USD Price Forecast published today points to the 1.1400 region as the critical barrier holding the downside for now. The Euro rebounded this Tuesday, inching toward 1.1700, driven by a weakened US Dollar after mixed results in the US CPI release. With markets now pricing in two potential Fed rate cuts—likely in September and December—the USD Index (DXY) slipped to two-week lows near 98.00.
A major lift came from trade policy developments: President Trump extended the US-China tariff truce by another 90 days through November 10, averting new levies at the last minute. Meanwhile, the US-EU accord remains in motion, cutting most European export tariffs to 15% from the threatened 30%. Yet sectors like steel and aluminium still face 50% duties, while Europe has pledged $750 billion in US energy, defence orders, and over $600 billion in investments.
But the sentiment is fragile: German Chancellor Merz warned the deal may strain an already fragile manufacturing base, and France’s Macron lamented it as a “dark day” for Europe. On the policy front, the Federal Reserve is holding steady—though Powell’s cautious tone and dissent from other governors suggest traders are bracing for eventual easing. Meanwhile, ECB head Lagarde described Eurozone growth as “solid, if a little better,” but markets have pushed expectations for rate cuts to spring 2026.
In positioning, speculator net longs in EUR/USD dropped to five-week lows (≈116K contracts), while commercial players trimmed shorts to around 163.5K, and open interest hit a four-week low (≈828.3K)—a sign of caution across the board.
From a technical perspective, the resistance cluster sits at the weekly high of 1.1788 (July 24), followed by 1.1830 (July 1), and the September 2021 peak of 1.1909. On the downside, support kicks in near the August low of 1.1391 and the 100-day SMA, with deeper support around 1.1210 (May 29 floor). Momentum indicators such as RSI (~55) suggest mild bullish potential, but the ADX (~15) signals the trend remains lackluster.
In essence, EUR/USD is hovering in a tight corridor of suspense, and its next move hinges on central bank pronouncements and how trade headlines evolve. Unless either the Fed surprises with dovish hints or trade frictions cool significantly, the pair is set to remain in rangebound mode, with the Greenback’s path being the main driver.
