EURUSD tests 1.1500 as the Fed and ECB prepare a new market shock

Positive eurozone data supported the euro, prompting the EURUSD rate to surge and test the 1.1535 level. Discover more in our analysis for 31 July 2026.

EURUSD forecast: key takeaways

• Eurozone Q2 GDP: previously at −0.2%, actual reading 0.4%
• The eurozone economy strengthened more than analysts expected in Q2
• EURUSD forecast for 31 July 2026: 1.1480 and 1.1565

Fundamental analysis

The EURUSD forecast takes into account that the pair continues to correct after its rapid rise and is testing the 1.1500 level.

Following its July meeting, the Federal Reserve kept interest rates unchanged, although three FOMC members called for a rate hike. This strengthened market expectations that monetary policy tightening could once again become a key issue as early as September.

New data showed that the eurozone economy strengthened more than analysts expected in Q2. In addition, July business activity indices and the region’s GDP returned to positive territory for the first time in several months. Against this backdrop, market participants became more confident about the state of the European economy, supporting the euro.

Following the stronger data and amid persistently high inflation risks, the market began to speculate that the European Central Bank could raise interest rates again before the end of the year. The ECB continues to maintain a cautious approach, but the likelihood of additional policy tightening has increased noticeably.

The forecast for 31 July 2026 takes into account that the euro is bolstered by strong eurozone data and expectations of further action from the ECB. At the same time, the Federal Reserve’s hawkish rhetoric is preventing the US dollar from weakening significantly. The pair’s further movement will largely depend on US inflation data and new statements from the US central bank.

Technical outlook

On the H4 chart, the EURUSD pair formed a Hanging Man reversal pattern near the upper Bollinger Band. At this stage, the price continues to form a corrective wave as the signal plays out, with a potential pullback target at the 1.1480 support level. A rebound from this level would open the way for continued upward movement.

At the same time, today’s EURUSD forecast also considers an alternative scenario. The price may continue its upward wave and test the 1.1565 resistance level without first testing support.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (intraday)
• Trend: bullish
• Key resistance levels: 1.1535 and 1.1565
• Key support levels: 1.1480 and 1.1428

EURUSD trading scenarios for today

Main scenario (Buy Stop)

A breakout and consolidation above the 1.1535 resistance level would confirm continued upward momentum and create conditions for further EURUSD growth.

• Take Profit: 1.1565
• Stop Loss: 1.1520

Alternative scenario (Sell Stop)

A breakout and consolidation below the 1.1480 support level would indicate easing buying pressure and a continued correction following the pair’s sharp rise.

• Take Profit: 1.1428
• Stop Loss: 1.1500

Risk factors

The main risk to the EURUSD bullish scenario remains a recovery in demand for the US dollar amid hawkish comments from Federal Reserve officials or renewed inflation concerns due to the conflict in the Middle East. As long as the price remains above 1.1500, buyers have the upper hand. However, overbought indicator readings increase the likelihood of a decline.

Summary

The euro gained support after the release of eurozone macroeconomic data that surprised the market. EURUSD technical analysis suggests a correction towards the 1.1480 support level before further growth.

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