EUR/USD Forecast 2026: ECB vs Fed Desk Read
The eur usd forecast hinges on the ECB versus Fed rate gap and relative growth. EUR/USD trades at 1.1697 as of 21 August 2026. The desk reads the near term bias as constructive while 1.1700 holds, and frames direction by structure and the macro path rather than a single target. Live levels and scenarios are below.
Ken’s Take. EUR/USD is 1.16903, 1.1690 and 1.1693 across three sources, under a pip apart, at a three month high and up about 1 per cent on the week. Almost none of this is European, and saying so is the honest way to frame the pair. The euro is the passenger. The driver is a dollar that was sold while US yields went UP overnight, and that combination is the whole week in one sentence. On 18 August this page published 1.1562 as the structural floor. The 19 August low was 1.1566, four pips above it, and it held. From there the pair has run from 1.1570 to 1.1711 in two sessions and it has not given any of it back: Thursday’s low was 1.1669 and today’s is 1.1676, both higher than the last. That is a rising sequence of lows on a published level, and anyone can open the 18 August video and check the number rather than take this page’s word for it.
What changed. The pair is now above the two pieces of evidence that separate a bounce from a trend change, and it was not last week. An independent technical desk anchors this recovery from the 1.1323 low to the 1.1843 April swing high. Its published 61.8 per cent retracement is 1.1644 and its 200 day simple moving average is 1.1631. Those are thirteen pips apart and both now sit UNDERNEATH price for the first time since June. Before publishing them this desk reproduced the ladder from the vendor’s own two anchors: 1.1323 plus 0.618 of 0.0520 is 1.16443 against a published 1.1644, and 1.1323 plus 0.786 of 0.0520 is 1.17317 against a published 1.1731. It reproduces exactly. A vendor level that cannot be rebuilt from its own anchors does not go on this page.
Main driver. The dollar leg, and specifically the reason for the yield rise rather than the yield rise itself. Higher US yields normally pull capital toward the dollar and push this pair down. That is only reliable when yields rise because America is strengthening. This week they rose while the US Treasury was actively trying to cap them, and rose again on Thursday after the Treasury Secretary said he may buy back more, which tells you the market is demanding a larger risk premium rather than pricing better growth. When that is the reason, the euro receives the flow by default and does not need a domestic story at all. The domestic story is in fact mildly supportive but it is not what is moving price: the euro area composite purchasing managers index for July was 52.0, up from 50.0 in June and the strongest in eight months, with services returning to growth alongside manufacturing. The European Central Bank meets on 10 September with the deposit rate at 2.25 per cent. For context only and not as a target, the sell side has already moved: Goldman Sachs and Deutsche Bank are both at 1.2500 for year end, Bank of America and ING at 1.2200, and UBS at 1.2000. The banks are positioned for the thing that started this week, which is a reason to respect the move and also a reason to be alert to how crowded it may become.
What the desk is watching. The 1.1631 to 1.1644 pair, as a single zone rather than two numbers, because losing either on a close costs the pair both. Above price the first thing is the round number at 1.1700, which the session high of 1.1701 has only just cleared, then the 78.6 per cent retracement at 1.1731. Beyond that this desk publishes a ZONE and not a number, and the reason is a genuine conflict worth showing the reader: one desk names the April swing high at 1.1843, a second names the 2026 highs at 1.1805 and 1.1915, and the 52 week high is 1.2079. Three different anchors for the same shelf. Where sources disagree about where a shelf is, the honest output is a zone with the disagreement named, not a tidy single figure chosen because it looks confident.
Key levels. Resistance begins at 1.1701, this session’s high, then 1.1711 which is Thursday’s high, then 1.1731 which is the 78.6 per cent retracement of 1.1323 to 1.1843, then the 1.1805 to 1.1843 shelf where two independent sources disagree about the precise anchor, then 1.1915, then 1.2079 which is the 52 week high. Support sits at 1.1676 the session low, then 1.1669 which is Thursday’s low, then 1.1644 the 61.8 per cent retracement, then 1.1631 the 200 day average, with those last two treated as one zone, then 1.1583 the 50 per cent, then 1.1562 which is the floor this desk published on 18 August and which held by four pips, then 1.1521 the 38.2 per cent, then 1.1445 the 23.6 per cent, then 1.1325 to 1.1323 which is the 52 week low and the anchor of the whole structure. The 52 week range is 1.1325 to 1.2079. No moving average other than the 1.1631 200 day is published for this pair today, and that one is kept only because it was reproduced from the vendor’s own anchors and sits inside thirteen pips of an independently derived retracement.
What would invalidate the view. A daily close back beneath 1.1631 puts price under both the 200 day average and the 61.8 per cent retracement in one move and reverts the entire advance to a retracement inside the old range, with 1.1583 and then the published 1.1562 as the working references beneath. That is the cleanest invalidation available on this pair because two independent forms of support would have to fail together. On the upside a daily close above 1.1731 leaves very little structural resistance until the 1.1805 to 1.1843 shelf. It has to be a close and it has to be on Ken’s own chart. The case against deserves stating plainly: this is a currency at a three month high on the strength of the other side of the pair, and currencies carried by the other side give the move back when that side stops moving. The specific thing that would stop it is a strong US flash purchasing managers index this afternoon, especially on the input cost component.
Data and event risk. Euro area flash purchasing managers indices land at 09:00 London today, with the July composite at 52.0 as the comparison, and the United States flash lands this afternoon with a July composite of 54.5 and input cost inflation at its fastest since November 2022. The European Central Bank decides on 10 September with the deposit rate at 2.25 per cent. The Federal Open Market Committee decides on 16 September with projections, with the target range at 3.50 to 3.75 per cent after five consecutive holds and a 9 to 3 July vote in which all three dissents favoured a hike. The Jackson Hole symposium runs from 27 to 29 August with Chair Kevin Warsh’s first keynote on the morning of 28 August, and it is the principal scheduled risk to this move in either direction. The Treasury buyback size increase takes effect on 9 September and the arrangement is reassessed at the 4 November refunding. The Strait of Hormuz remains the standing tail: 73 transits in the week to 16 August against 91 the week before, US Energy Information Administration flows down from 21.6 million barrels a day in the fourth quarter of 2025 to 4.9 million in the second quarter of 2026, US and Iranian diplomacy effectively collapsed with Oman still mediating, and Brent at 93.36 after gaining more than 5 per cent on the week. The euro area is a net energy importer and that tail is not friendly to this pair.
Educational only, not financial advice. The note above is the desk’s read on the date shown. Trading is leveraged and most retail accounts lose money.
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At 1.1697, EUR/USD sits between nearest support at 1.1700 (daily pivot P + pivot R1 + round 1.17) and first resistance at 1.1740 (pivot R2 + pivot R3 + round 1.175). The near term structure stays constructive while 1.1700 holds on a closing basis, with the next shelf at 1.1652 if it gives way. A sustained push through 1.1740 opens 1.1850.
Cross-asset tape reads risk-off (dollar bias neutral, vol elevated).
| 1.1740 | pivot R2 + pivot R3 + round 1.175 |
| 1.1850 | recent swing high + round 1.185 |
| 1.1700 | daily pivot P + pivot R1 + round 1.17 |
| 1.1652 | pivot S2 + round 1.165 + 21 EMA H4 |
| 1.1618 | round 1.16 + pivot S3 |
Levels from the desk’s six lens confluence scan, refreshed each session. Positioning structure, not a trade instruction. Trading carries risk; most retail accounts lose money.
What actually moves EUR/USD
EUR/USD is the world’s most traded pair and at heart it is a rate differential story. The euro tends to firm against the dollar when the market expects the European Central Bank to hold rates higher relative to the Federal Reserve, and it tends to soften when the Fed is expected to stay tighter for longer. That is why the pair reacts so sharply to inflation prints and central bank meetings on both sides of the Atlantic: each one reprices the gap between the two policy paths.
Relative growth and risk appetite layer on top. A stronger euro area growth surprise narrows the gap the market expects and supports the euro. Broad dollar strength in a risk off episode can override the rate story for a while, since the dollar is the world’s haven. The desk reads EUR/USD as the ECB path minus the Fed path, adjusted for who is growing and where global risk appetite sits.
How the desk reads the chart
EUR/USD respects clean horizontal structure and the big round figures, which makes the level map below the spine of the read. The near term bias stays constructive for the euro while price holds its nearest defended support and prints higher lows; it turns heavy when a support that held repeatedly breaks on a closing basis. The named levels are drawn from a six lens confluence scan, prior day and weekly extremes, round numbers, moving averages, pivots and the volume point of control, rather than from a single indicator.
This is positioning structure, not a trade signal. It shows where the market has defended price so you can build your own plan and risk around it.
Frequently asked questions
What is the EUR/USD forecast right now?
The live read at the top of this page is refreshed every session with the current EUR/USD rate, the day’s move and the nearest support and resistance from the desk’s level scan. Direction hinges on the ECB versus Fed rate gap: when the market expects the ECB to stay relatively tighter, the euro tends to firm, and the reverse when the Fed is expected to hold higher for longer.
What drives EUR/USD?
EUR/USD is mainly a rate differential trade. The euro firms when the European Central Bank is expected to hold rates higher relative to the Federal Reserve, and softens when the Fed is expected to stay tighter. Relative growth surprises and global risk appetite layer on top, with the dollar’s haven status able to override the rate story during risk off episodes.
Will EUR/USD go up in 2026?
That depends on the path of the rate gap. If the Fed eases faster than the ECB, the differential narrows in the euro’s favour and EUR/USD tends to grind higher. If the Fed holds while the ECB cuts, the dollar tends to win. The desk tracks both central bank paths and frames bias by structure rather than a fixed year end target.
What are the key levels for EUR/USD?
The named levels card above lists the current support and resistance zones, each from a six lens confluence scan and tagged with why it matters, for example a prior weekly high or a round figure. The levels refresh every session as structure shifts, so the page always shows the live map.
Is EUR/USD a buy at current levels?
The desk does not post buy or sell instructions here. It posts the structure: where the rate sits versus defended support and overhead resistance and what would flip the near term bias. Use that to frame your own plan and risk. Trading carries risk and most retail accounts lose money.
EUR/USD turns on the ECB versus Fed path. The free KenMacro framework is the same risk-first, macro-aware approach behind this desk view, built so you can apply it to your own trading.
More from the desk: US dollar outlook · world interest rates
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Part of the Dollar and DXY Forecast hub, the desk’s living guide, kept current as markets move.