US weakness and government debt concerns push EURUSD higher

The euro continues to strengthen against a weakening USD, with the EURUSD rate currently at 1.1695. Find out more in our analysis for 21 August 2026.

EURUSD forecast: key takeaways

• Eurozone manufacturing Purchasing Managers' Index (PMI): previously at 51.9, projected at 51.8
• US manufacturing PMI: previously at 53.9, projected at 54.0
• EURUSD forecast for 21 August 2026: 1.1750 and 1.1660

Fundamental analysis

The EURUSD forecast takes into account that the pair is forming a corrective wave after its rise and is testing the 1.1700 level.

The main theme today is the rise in Treasury yields alongside declining investor confidence in the actions of the US Treasury, which is trying to prevent further instability in the bond market. Against this backdrop, concerns about the US budget deficit and debt burden are increasing, while the dollar is becoming less attractive.

Following weak employment data and moderate inflation, expectations for Federal Reserve policy tightening have eased markedly. The market is now increasingly pricing in a softer path for US interest rates. At the same time, inflation risks in the eurozone, fuelled by high energy prices, still leave room for more hawkish statements from the ECB.

European markets remain resilient despite the prolonged conflict between the US and Iran. Investors are responding positively to corporate earnings, calmer economic expectations, and a relatively stable fiscal situation in Europe. All of this further supports demand for the euro.

The forecast for 21 August 2026 takes into account that the market is awaiting the release of PMI data from the US and the eurozone. If European indicators prove stronger amid a further slowdown in the US economy, this could further reinforce the euro's current fundamental advantage.

Technical outlook

On the H4 chart, the EURUSD pair formed a Shooting Star reversal pattern near the upper Bollinger Band. At this stage, quotes are forming a correction as the signal develops, with a potential target for a pullback at the 1.1600 support level. A rebound from this mark would open the way for the uptrend to continue.

At the same time, today's EURUSD forecast also suggests another scenario. Quotes could continue their upward trajectory and test the 1.1750 resistance level.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (intraday)
• Trend: bullish
• Key resistance levels: 1.1700 and 1.1750
• Key support levels: 1.1660 and 1.1582

EURUSD trading scenarios for today

Main scenario (Buy Stop)

A breakout and consolidation above the 1.1700 resistance level would confirm continued strong upward momentum and create conditions for further growth.

• Current quote: 1.1695
• Take Profit: 1.1750
• Stop Loss: 1.1685

Alternative scenario (Sell Stop)

A breakout and consolidation below the 1.1660 support level would indicate a continued correction after the pair's rise.

• Take Profit: 1.1582
• Stop Loss: 1.1680

Trade idea validity: 12:00 AM, 21 August 2026

Risk factors

The main risks to further EURUSD upside are associated with hawkish signals from the Federal Reserve, which could revive expectations of a rate hike and support the dollar. Geopolitics remains an additional factor.

Summary

The euro continues to strengthen ahead of US and eurozone PMI data. EURUSD technical analysis suggests a correction towards the 1.1660 support level before further growth.

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