The Fed and ECB clash over EURUSD

The EURUSD pair continues to correct ahead of the Federal Reserve Chairman’s speech at Jackson Hole, with the rate currently at 1.1652. Discover more in our analysis for 27 August 2026.

EURUSD forecast: key takeaways

• The US PCE price index for July came in at 3.7% year-on-year, above the forecast of 3.6%
• The market is increasingly pricing in an ECB rate hike to 2.5% in September
• EURUSD forecast for 27 August 2026: 1.1715 and 1.1615

Fundamental analysis

The EURUSD forecast takes into account that the pair continues its corrective wave after the recent rise and is testing the 1.1652 level.

US PCE inflation for July stood at 3.7% year-on-year, above the expectations of 3.6%, while the monthly reading increased by 0.2%. The actual data fuelled expectations of a possible Fed interest rate hike in September.

Today, the market is turning its attention to the Jackson Hole Symposium ahead of a speech by Federal Reserve Chairman Kevin Warsh. Investors will be looking for signs that the regulator is prepared to tighten policy amid persistent inflation.

ECB Executive Board member Isabel Schnabel said the current level of interest rates is insufficient to return inflation sustainably to the 2.0% target. The market is increasingly pricing in an ECB rate hike to 2.5% in September.

Recent data indicates relatively resilient business activity, with Germany posting stronger-than-expected economic growth. This reduces the need to stimulate the economy while allowing the ECB to focus more on inflation.

The forecast for 27 August 2026 takes into account that the fundamental backdrop for the EURUSD pair remains mixed, with a moderate advantage for the euro. Higher US inflation has temporarily strengthened the dollar, but a potential ECB rate hike and the relatively resilient eurozone economy provide a counterweight. The main driver today is anticipation of the Fed chair’s speech in Jackson Hole.

Technical outlook

On the H4 chart, the EURUSD rate formed a Hammer reversal pattern near the lower Bollinger Band. At this stage, the price may form an upward wave as the signal develops, with the upside target at the 1.1715 resistance level. A breakout above this mark would open the way for a continued uptrend.

At the same time, today’s EURUSD forecast also suggests another scenario. The price may continue the correction and test the 1.1615 support level before resuming growth.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (intraday)
• Trend: bullish
• Key resistance levels: 1.1675 and 1.1715
• Key support levels: 1.1615 and 1.1525

EURUSD trading scenarios for today

Main scenario (Buy Stop)

A breakout and consolidation above the 1.1675 resistance level would create conditions for opening long positions and indicate the end of the bearish correction.

• Current price: 1.1652
• Entry price: 1.1675
• Stop loss: 1.1650
• Take profit: 1.1715
• Risk-to-reward ratio: more than 1:2

Alternative scenario (Sell Stop)

A breakout below the support level would indicate increasing bearish pressure, while consolidation below 1.1615 would signal a continuation of the corrective wave.

• Entry level: 1.1615
• Stop loss: 1.1635
• Take profit: 1.1525
• Risk-to-reward ratio: more than 1:4

The trade idea is valid until midnight on 28 August 2026 (server time, UTC+3).

Risk factors

The main risk to EURUSD growth is a potentially hawkish statement on monetary policy tightening by Federal Reserve Chairman Kevin Warsh at Jackson Hole, which could trigger aggressive buying of the US dollar.

Summary

The fundamental backdrop remains mixed: higher US inflation supports the USD, while expectations of an ECB rate hike limit the dollar’s advantage. EURUSD technical analysis suggests a rise towards 1.1715 after the correction is complete.

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