Today, the fundamental picture for EURUSD is mostly neutral, suggesting flat trading in the days ahead. The relatively wide monetary gap between the US Federal Reserve (Fed) and the European Central Bank (ECB)—3.75% versus 2.00%—continues to act as an anchor on the pair. Such a spread keeps carry trades in the dollar's favor, nudging investors to stay long on the greenback. But here's where the euro tries to fight back. Market expectations are starting to flip the script. In the United States, borrowing costs are seen going nowhere through year-end, with maybe one cut in 2026. The eurozone is a whole different story: an energy shock and higher inflation forecasts have traders bracing for up to two ECB rate hikes before the year is out. This shift in predictions is slowly closing the real rate gap and giving the single currency a much-needed support.
Technically, the bias leans bullish. The pair has established a solid floor at 1.16800, a level that has already rejected the downside three times. Concurrently, the Relative Strength Index (RSI) has dipped into oversold territory before going higher—a sign that bearish momentum is running on empty. This paves the way for an ascent to the upper boundary of the flat range, with the next target at 1.17500.
The overall recommendation is to buy the EURUSD pair at the current price, aiming for 1.17500 within one month. To protect against adverse market movements, place a Stop Loss order just below the support level (i.e., at 1.16800).
This content is for informational purposes only and is not intended to be investing advice.
