EURUSD weekly forecast: Fed to test the euro’s resilience

The EURUSD pair ended the week near 1.1605 after several sessions of consolidation. The euro received support from another ECB rate hike, but strong US producer inflation once again bolstered the position of those favouring a hawkish Federal Reserve policy.

The new September week kicks off with central bank decisions in focus, so volatility in the currency market could increase noticeably.

EURUSD forecast for this week: quick overview

• Market focus: the Federal Reserve meeting will be the key event of the week for the EURUSD pair. Following the stronger PPI reading, the market currently estimates the likelihood of a rate hike at 71%, up from 62% before the data release, so investors are once again preparing for a fairly hawkish signal from the US regulator. For the pair, the focus will be not only on the rate decision itself but also on the assessment of the future policy trajectory. If the Fed is prepared to continue tightening, the dollar will gain the upper hand. Conversely, cautious comments following a potential hike would boost demand for the EURUSD pair
• Current trend: on the daily chart, the EURUSD rate remains within the ascending channel formed after the July lows, but momentum is gradually weakening. After rising towards the 1.1680–1.1700 area, the pair pulled back to 1.1605 and is currently trading near the middle Bollinger Band. MACD remains in positive territory but is declining, indicating that buyers are losing strength. The Stochastic Oscillator has turned down from the upper half of its range and also signals a risk of a continued local correction. The broader upward structure, however, remains hidden for now
• Weekly outlook: the baseline scenario suggests increased volatility within the ascending channel, with a risk of further correction early in the week. To regain sustained buying momentum, the EURUSD pair needs to rise above 1.1663. Consolidation above this level would shift the focus back to 1.1722 and the upper boundary of the current channel. A decline below 1.1545 would signal a deterioration in the technical structure and open the way towards 1.1486

EURUSD fundamental analysis

The European Central Bank raised its deposit rate to 2.50% at its September meeting, marking the second increase in 2026 after the June move and strengthening expectations that the tightening cycle in the eurozone is not yet over.

Christine Lagarde maintained a hawkish tone, pointing to the risk of inflation remaining noticeably above the 2% target. Rising energy costs and geopolitical tensions are adding further pressure to prices, so the ECB is keeping the door open to additional rate hikes. This backdrop could limit pressure on the euro even if the dollar remains strong.

On the US side, conditions are also becoming more hawkish. The higher PPI reading fuelled expectations of a Federal Reserve rate hike at the upcoming meeting, with the market estimating the likelihood of such a move at around 71%. The regulator faces the ongoing challenge of curbing inflationary pressure without causing excessive damage to economic activity.

The EURUSD pair is therefore entering a phase where both currencies are being supported by tighter monetary policy. The key factor will be the relative difference in expectations: if the Fed convinces the market that further tightening will be necessary after September, the advantage could shift to the dollar. If, however, the rate hike proves to be close to the end of the cycle, the ECB’s recent hawkish signal would support the euro.

EURUSD technical analysis

On the daily chart, the EURUSD pair has remained within an ascending channel since late July. The sequence of higher lows remains intact, so the medium-term structure still favours buyers despite the pullback from the August high.

The nearest resistance level is located at 1.1663, with the next targets at 1.1722 and 1.1781. The lower boundary of the current structure lies in the 1.1545–1.1560 area. A breakout below it would increase the likelihood of a move towards 1.1486 and then 1.1427.

Following the recent expansion, Bollinger Bands are beginning to stabilise, and the price has returned to the middle band. MACD remains above zero, but its downward trajectory indicates weakening momentum. The Stochastic Oscillator is in neutral territory and pointing downwards, which does not yet confirm a new upward wave.

As a result, the technical backdrop remains moderately positive in the medium term, but the short-term balance is shifting towards consolidation and correction.

EURUSD trading scenario

The current structure remains moderately positive, but an entry makes sense only after confirmation that buying momentum has returned. Consolidation above 1.1663 would suggest a continued move within the ascending channel.

• Entry level: buy stop 1.1665
• Take profit: 1.1722
• Stop loss: 1.1628
• Risk-to-reward ratio: approximately 1:1.5

The trade idea is valid until 8:00 AM on 18 September 2026 (server time, UTC+3).

If the EURUSD pair remains below 1.1663, the trade idea will not be activated.

Summary

The EURUSD pair maintains its medium-term upward structure, but waning momentum and the approaching Federal Reserve meeting increase the likelihood of sharp moves in both directions. The pair’s near-term direction will be determined by a breakout from the 1.1545–1.1663 range.

The EURUSD forecast for 14–18 September remains neutral with a moderately bullish bias while the price holds within the ascending channel.

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