EURUSD retreats amid strong US service sector

The EURUSD pair is declining amid strong US macroeconomic data, although long-term factors continue to limit the downside potential. The rate currently stands at 1.1676. For more details, see our analysis for 24 August 2026.

EURUSD forecast: key takeaways

• The US service sector expanded at its fastest pace since December 2024
• Markets are pricing in only a 38.9% probability of a Federal Reserve interest rate hike in September
• EURUSD forecast for 24 August 2026: 1.1565

Fundamental analysis

The EURUSD rate is correcting for the third consecutive trading session after buyers failed to consolidate above the key 1.1695 resistance level. Last week, the EURUSD pair showed strong bullish momentum. The main driver of US dollar weakness was a move by US Treasury Secretary Scott Bessent, who announced a doubling of long-term Treasury bond buybacks.

However, strong US macroeconomic data prevented the bulls from extending the uptrend. The services PMI unexpectedly rose to 56.8 in August, marking the fastest pace of expansion in the sector since December 2024. A sharp increase in new orders and employment, together with improved business expectations, indicated a rapid recovery in the US economy, restoring support for the US dollar.

According to market estimates, the likelihood of a Federal Reserve rate hike at the September meeting is currently about 38.9%, while the baseline scenario, with a probability of 61.1%, suggests rates will remain unchanged.

Despite the current profit-taking and correction in the EURUSD pair, large investors remain optimistic about the European currency. UBS has raised its long-term EURUSD target from 1.17 to 1.20. Institutional investors are betting on monetary policy divergence, with the ECB maintaining its hawkish rhetoric while pressure from the Federal Reserve eases.

Technical outlook

The EURUSD rate is declining after rebounding from the upper boundary of the medium-term descending channel. Risks remain that a Double Top reversal pattern could form, with a breakout indicating a stronger bearish correction. The EURUSD forecast for today suggests a rebound from the channel’s upper boundary and a decline towards 1.1565.

Analysis of the Stochastic Oscillator further supports a decline. The oscillator has reached overbought territory and a descending resistance line, indicating a potential downward reversal and increasing selling pressure. A breakout below the boundary of the short-term bullish channel, with the price consolidating below the 1.1665 support level, would confirm the bearish EURUSD scenario for today.

At the same time, the risk of an alternative scenario remains if growth continues. If buyers consolidate above the upper boundary of the descending channel and break through the key 1.1695 resistance level, this would signal an easing of bearish pressure. In this case, the EURUSD pair could continue its bullish momentum towards the nearest target at 1.1785.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (intraday)
• Trend: bullish
• Key resistance levels: 1.1695 and 1.1785
• Key support levels: 1.1665 and 1.1565

EURUSD trading scenarios for today

Main scenario (Sell Stop)

A breakout below the lower boundary of the Double Top reversal pattern, with prices consolidating below 1.1665, would create conditions for opening short positions with the first target at 1.1615.

• Current price: 1.1676
• Take profit: 1.1615
• Stop loss: 1.1680
• Risk-to-reward ratio: 1:3

Alternative scenario (Buy Stop)

A breakout above the upper boundary of the descending channel, with prices consolidating above 1.1695, would indicate increased bearish pressure and continued bullish momentum.

• Take profit: 1.1780
• Stop loss: 1.1670
• Risk-to-reward ratio: 1:3

The trade idea expires on 24 August 2026 at 12:00 AM.

Risk factors

The main risk to the EURUSD downside scenario would be a consolidation above the key 1.1695 resistance level, which would open the way for a rise towards 1.1785. In addition, long-term fundamental factors, including the ECB's hawkish rhetoric and expectations of Federal Reserve policy easing, could limit the depth of the bearish correction and trigger an early upward reversal.

Summary

In the short term, the EURUSD pair is vulnerable to a corrective decline towards 1.1565 amid overbought conditions. However, the long-term downside potential is limited by fundamental support for the euro from the ECB.

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