The Fed could shake up EURUSD: markets pause ahead of Jackson Hole

The USD is gradually strengthening ahead of the Federal Reserve Chairman's speech, while the EURUSD pair is forming a correction, with the rate currently at 1.1655. Discover more in our analysis for 25 August 2026.

EURUSD forecast: key takeaways

• The Jackson Hole Symposium remains the key event of the week
• The market is pricing in the possibility of ECB rate hikes
• EURUSD forecast for 25 August 2026: 1.1615 and 1.1715

Fundamental analysis

The EURUSD forecast takes into account that the pair is forming a corrective wave after its rise and is testing the 1.1655 level. Today, the market continues to assess the outlook for Federal Reserve monetary policy and the impact of high Treasury yields. The US Dollar Index remains near 99.00, while the euro continues to see strong demand.

The Jackson Hole Symposium remains the week's key event. Investors are awaiting signals on the future path of the Fed's interest rate. Softer rhetoric could increase pressure on the dollar, while a focus on inflation and the need to keep rates high could temporarily restore support for the US currency.

Persistent inflation risks in the eurozone, primarily linked to energy, are prompting the market to price in the possibility of ECB rate hikes. Traders expect the interest rate to rise to 2.5% in September, with the likelihood of a further hike to 3.0% by September 2027 increasing significantly.

The expansion of US sanctions against Iran is supporting demand for the dollar as a safe-haven asset. Tensions in the US government debt market remain an additional factor.

The forecast for 25 August 2026 takes into account that the main support for the USD comes from expectations of Fed monetary policy easing alongside increasingly hawkish expectations for the ECB. The main risk for the euro is geopolitics and high energy prices, which could revive demand for the dollar as a safe-haven currency. In the coming days, the key event will be Kevin Warsh's speech at Jackson Hole.

Technical outlook

On the H4 chart, the EURUSD pair formed a Shooting Star reversal pattern near the upper Bollinger Band. At this stage, the price continues to correct as this signal plays out, with a potential downside target at the 1.1615 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. The price could continue its upward trajectory and test the 1.1715 resistance level without first testing support.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (intraday)
• Trend: bullish
• Key resistance levels: 1.1670 and 1.1715
• Key support levels: 1.1615 and 1.1565

EURUSD trading scenarios for today

Main scenario (Buy Stop)

A breakout above the resistance level and consolidation above 1.1670 would create conditions for opening long positions, with the first target at 1.1715.

• Current price: 1.1655
• Entry price: 1.1670
• Stop loss: 1.1650
• Take profit: 1.1715
• Risk-to-reward ratio: more than 1:2

Alternative scenario (Sell Stop)

A breakout and consolidation below the 1.1615 support level would indicate increased selling pressure and a continued corrective wave.

• Current price: 1.1655
• Entry level: 1.1615
• Stop loss: 1.1635
• Take profit: 1.1565
• Risk-to-reward ratio: more than 1:2

The trade idea is valid until 12:00 AM on 25 August 2026.

Risk factors

The main risks to the EURUSD upside scenario remain long-term fundamental factors, including hawkish Fed rhetoric and potential ECB policy easing, which could push the EURUSD rate lower.

Summary

The euro remains influenced by energy prices and expectations ahead of the Federal Reserve chairman's speech. EURUSD technical analysis suggests a correction towards 1.1615 before growth resumes.

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