EUR/USD Digests Data Ahead of Fed Decision

The EUR/USD pair held steady around 1.1727 USD on Friday, as the US dollar remained under pressure following the release of inflation data that largely met expectations. The figures reinforce the Federal Reserve’s scope to ease monetary policy amid growing signs of labour market softening.

The US August inflation report showed consumer prices rose 0.4% month-on-month, slightly above the forecast of 0.3%, while the annual rate came in at 2.9%, matching expectations. Meanwhile, initial jobless claims increased by 27,000 to 263,000 – the highest level since 2021 – underscoring emerging weakness in the employment sector.

Interest rate futures now indicate a 93% probability of a 25-basis-point cut at the Fed’s 17 September meeting. Market speculation around a more aggressive 50-basis-point reduction is also gradually building.

Across the Atlantic, the European Central Bank left its key rate unchanged at 2.0% for the second consecutive meeting. In political developments, the US and Japan issued a joint statement emphasising that exchange rates should be market-determined and that excessive volatility is undesirable.

Technical Analysis: EUR/USD

H4 Chart:

On the H4 chart, EUR/USD has completed an upward move towards 1.1735 USD. A sustained break above this resistance level signals a continuation of the broader uptrend. However, a short-term pullback toward this level – now potentially acting as support – cannot be ruled out.The MACD indicator supports further gains: both the histogram and signal line remain above zero and are rising, confirming bullish momentum. The primary outlook favours an extension towards 1.1810 USD, with a further target at 1.1870 USD, though intermittent corrections may occur.

H1 Chart:

On the H1 chart, the pair is testing resistance and showing signs of consolidation. A clear break above 1.1735 USD may trigger another leg higher. The Stochastic oscillator is testing the 80 level, suggesting strong upward momentum remains intact. The near-term upside target is 1.1810 USD.

Conclusion

EUR/USD remains well-supported as markets price in growing Fed dovishness, driven by softening labour data and stable inflation. With the ECB maintaining a steady stance and risk sentiment cautiously optimistic, the pair looks poised to extend gains, pending next week’s Fed decision. Technically, the path of least resistance appears upward, though a brief retracement may offer entry opportunities ahead of further advances.

Disclaimer: Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

RoboForex
종류: STP, ECN, Market Maker
규제: FSC (Belize)
read more
The euro's second chance

The euro's second chance

• Trade war de-escalation. • The Fed will continue to cut rates. • Politics is holding back the euro. • Verbal interventions are helping the yen.
FxPro | 7 시간 41 분 전
ATFX Market Outlook 28th October 2025

ATFX Market Outlook 28th October 2025

U.S. equities extended gains on Monday, with all three major indexes closing at record highs for the second straight session. Optimism over a potential U.S.–China trade deal, combined with anticipation for this week’s Big Tech earnings and the Federal Reserve’s policy decision, fueled the rally.
ATFX | 8 시간 11 분 전
Central banks are in the spotlight this week

Central banks are in the spotlight this week

• Increased risk appetite divides G10 currencies • The US and Canada intend to lower rates. • The ECB and BoJ have opted for a wait-and-see approach. • Japan may resume interventions.
FxPro | 1 일 전
​ATFX Market Outlook 27th October 2025

​ATFX Market Outlook 27th October 2025

U.S. September consumer prices rose slightly less than expected, as a surge in gasoline costs was partly offset by a sharp decline in rents, supporting expectations for a Fed rate cut this week. U.S. equities closed at record highs on Friday, driven by the softer inflation data and strong corporate earnings.
ATFX | 1 일 전
Inflation in Focus as Traders Eye BoE’s Next Move | 22nd October 2025

Inflation in Focus as Traders Eye BoE’s Next Move | 22nd October 2025

Markets traded cautiously as investors awaited UK inflation data, a key driver for the Bank of England’s next move. The Pound held firm ahead of CPI, oil extended gains on improving demand, and the US Dollar stayed soft. Broader sentiment was steady as easing US–China trade tensions balanced inflation-driven uncertainty.
Moneta Markets | 6 일 전
ATFX Market Outlook 22nd October 2025

ATFX Market Outlook 22nd October 2025

The U.S. Dollar Index climbed to a six-day high, buoyed indirectly by a weaker yen. Markets reacted to the election of conservative Sanae Takaichi as Japan’s first female prime minister, with speculation that fiscal expansion under her leadership could cloud the country’s interest rate outlook.
ATFX | 6 일 전