Bearish momentum in EURUSD continues

The EURUSD rate remains under pressure despite attempts at corrective recovery and stronger expectations that the Federal Reserve will maintain a hawkish policy. The rate currently stands at 1.1598. Discover more in our analysis for 20 May 2026.

EURUSD forecast: key takeaways

• Pressure on the EURUSD pair persists amid a stronger US dollar
• The latest US labour market report showed solid employment growth
• Investors are revising expectations for Fed interest rates
• EURUSD forecast for 20 May 2026: 1.1735

Fundamental analysis

The EURUSD currency pair entered a corrective rally after rebounding from the 1.1595 support level, but pressure on the euro remains in place amid a strengthening US dollar. The US currency remains supported by mounting geopolitical tensions between the US and Iran, which is increasing inflation risks and raising expectations that the Federal Reserve will maintain its tight policy.

President Donald Trump stated that Washington may resume strikes on Iran if Tehran does not accept the proposed peace terms. Against this backdrop, investors are reassessing expectations regarding Fed interest rates. While markets had previously priced in rate cuts this year, they are now increasingly discussing the likelihood of rate hikes before the end of the year, which is intensifying bearish sentiment in the EURUSD pair.

Additional support for the US dollar is coming from resilient US macroeconomic data. The latest labour market report showed solid employment growth, while the May ADP report confirmed that the labour market remains strong. As a result, market participants expect the Fed to move towards rate cuts if inflation slows sustainably.

Technical outlook

The EURUSD pair is undergoing a correction after rebounding from the lower boundary of the descending channel. Despite continued bearish momentum, buyers are still holding support at 1.1595, preventing a deeper decline. The EURUSD forecast for today suggests an attempt to rebound from the lower boundary of the channel, followed by a bullish correction towards the 1.1735 level.

The technical picture remains moderately positive for the pair’s recovery. The Stochastic Oscillator is turning upwards after exiting oversold territory and is forming a bullish crossover, indicating weakening selling pressure. A breakout of the upper boundary of the descending channel and consolidation above 1.1625 would be an additional signal of growth.

An alternative scenario suggests stronger pressure on the euro if the price breaks below the lower boundary of the bearish channel and consolidates below the 1.1565 level. Such a signal would confirm a stronger downward momentum and open the way for a further decline in EURUSD.

EURUSD overview

• Asset: EURUSD
• Timeframe: H1 (Intraday)
• Trend: downward with risks of a bullish correction
• Key resistance levels: 1.1655 and 1.1725
• Key support levels: 1.1595 and 1.1520

EURUSD trading scenarios for today

Main scenario (Buy Stop)

A breakout above the upper boundary of the descending channel, with the price consolidating above 1.1625, would indicate a bullish correction.

• Take Profit: 1.1735
• Stop Loss: 1.1580

Alternative scenario (Sell Stop)

Consolidation below the 1.1565 support level would indicate stronger selling pressure and signal a bearish scenario.

• Take Profit: 1.1475
• Stop Loss: 1.1605

Risk factors

The main risks to the upside scenario are continued selling pressure if buyers fail to consolidate above the key resistance level at 1.1625. An additional risk factor is a possible breakout below the 1.1595 support level, which may lead to renewed downward momentum and cancel the corrective growth scenario.

Summary

EURUSD technical analysis indicates persistent bearish pressure alongside simultaneous attempts to form corrective growth from the current support levels. The implementation of the bullish scenario for EURUSD today will depend on buyers’ ability to hold the key support level of 1.1595 and consolidate above 1.1625. Otherwise, the downward move is likely to resume.

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