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 1.1474, boxed between 1.1455 and 1.1498 for four sessions beneath the broken 1.1535 neckline. A daily close beneath 1.1455 opens 1.1400 and 1.1370, a close above 1.1540 invalidates the bearish structure. Live levels and scenarios are below.
Ken’s Take. The euro is about 1.1474 on TwelveData and Investing.com, a touch firmer on a Monday close of 1.1464, in a session running 1.1462 to 1.1478. The scorecard since this desk’s last published note: the bearish branch is still live and unresolved. It stays valid beneath 1.1535, the euro has closed beneath it every day since, and the published 1.1400 objective has not been reached, because the market has spent four sessions boxed between about 1.1455 and 1.1498. That box is exactly what Ken drew on Monday: a consolidation sitting on his 1.1465 zone, with a possible sweep of the Asian range high and Thursday’s high near 1.1498 before a continuation lower towards his 1.1370 zone. Ken’s video for today is on this page, and it leans the same way: hawkish Federal Reserve speakers and rising hike odds supporting the dollar, the euro and the pound pointing to lower lows, and gold under pressure after Monday’s bearish close. The structural zones here are read off his Monday chart. What matters today is that oil fell 3.4 per cent on Monday, which should have helped an energy importer, and the euro fell anyway.
What changed. Oil fell hard on Monday and the Federal Reserve trade did not move. Brent settled at 100.34 dollars, down 3.4 per cent and its lowest since 9 September, on diplomacy at the United Nations, President Trump saying he would probably meet Iran’s President Pezeshkian, and Saudi exports partly recovering. On the Treasury’s own curve the 2 year closed unchanged at 4.76 per cent while the 10 year fell 5 basis points to 4.96 and the 30 year to 5.29, and the 10 year real yield fell 6 basis points to 2.62 while breakevens barely moved. Chicago Fed President Austan Goolsbee said supply shocks have come more frequently, hit harder and lasted longer, that the Federal Reserve can no longer look through them, and that the fight is going to be painful. October hike pricing sits roughly between 52 and 60 per cent depending on the source. The Nasdaq closed at a record. Overnight a tanker was struck by a projectile on an inbound Hormuz transit, Iran’s Revolutionary Guard said the war is not over, and Brent bounced about 1.5 per cent towards 101 to 102 dollars. The Treasury says Iranian airlines will be shut out worldwide from Wednesday. At 07:00 the ONS said UK public sector borrowing was 18.3 billion pounds in August, 3.5 billion above the Office for Budget Responsibility forecast and the second highest August on record, with the year to date 8.1 billion over forecast and debt interest of 8.8 billion the highest for any August. In Europe, German politics is still in the tape after the Chancellor’s CDU took 4.9 per cent in the Mecklenburg-Western Pomerania state election, and France’s 10 year spread over Bunds is holding near 100 basis points. Dutch gas fell 2.5 per cent to about 77.55 euros a megawatt hour.
Main driver. Two things are pressing on the euro and only one of them is the Federal Reserve. The United States 2 year is pinned at 4.76 after the hike, and Goolsbee’s comments on Monday made it harder to argue the Federal Reserve will look through the oil shock, so the rate gap stays wide. The second is euro specific: a French spread near 100 basis points for the first time since 2012 and a German government whose party fell below the 5 per cent threshold in a state election. On this desk’s decomposition the euro leg was about half of the dollar index’s 0.21 per cent rise on Monday, on a day when falling oil and gas should have been a terms of trade gift to Europe. That refusal is the tell. The European Central Bank at 2.50 per cent is tightening into an imported energy bill, which reads as damage limitation rather than strength, and vendor pricing for its October meeting is too scattered to lean on.
What the desk is watching. Whether the box breaks, and which way. Four sessions of lows at 1.1455 to 1.1462 sit on Ken’s 1.1465 zone, and four sessions of highs at 1.1492 to 1.1498 sit just under 1.1500. Ken’s map is a sweep of the top of the box first, then a break lower. On the United States side, John Williams at 15:05 and the 2 year auction at 18:00 decide whether the 2 year holds 4.76. On the euro side, watch the French spread and German headlines, then Wednesday’s flash PMIs, where weak output and high input prices would read as stagflation. Watch oil: if Brent falls again on United Nations diplomacy and the euro still cannot rally, the problem is European. Watch the yen too, because an intervention in the Tokyo holiday would drag the dollar lower and lift the euro without any change in Europe. Name that channel before calling it euro strength.
Key liquidity areas. The obvious pool sits under the floor of the box. Four sessions of lows at 1.1455, 1.1456, 1.1461 and 1.1462 have built equal lows directly on Ken’s 1.1465 zone, and the stops beneath protect everyone who has bought the bottom of the range since the Federal Reserve day. Beneath that the next resting orders sit at 1.1400, the round number, then around 1.1370, Ken’s zone and his drawn target, then 1.1323 to 1.1340, this desk’s swing low and the approximate measured target of the head and shoulders. Above, the stops of the range sellers sit over 1.1492 to 1.1498, the three session highs and Thursday’s high, which is the sweep Ken is watching for, then over 1.1520, Ken’s zone, and the 50 and 100 day averages at 1.1539 and 1.1547.
Key levels. Resistance begins at 1.1492 to 1.1498 which is the three session highs and Thursday’s high, then 1.1520 which is Ken’s zone, then 1.1539 to 1.1547 which is the 50 day average and the 100 day average on this desk’s settled closes, then 1.1580 to 1.1584 which is Ken’s upper zone and the 20 day average, then 1.1628 which is the 200 day average. Support begins at 1.1455 to 1.1465 which is four sessions of lows and Ken’s 1.1465 zone, then 1.1400 which is the round number, then about 1.1370 which is Ken’s zone and drawn target, then 1.1323 to 1.1340 which is this desk’s swing low and the approximate measured target of the head and shoulders.
Key technical levels. After the head and shoulders broke on the Federal Reserve day, the euro has gone sideways rather than down. Four sessions have printed inside about 43 pips, lows between 1.1455 and 1.1462, highs between 1.1492 and 1.1498, the tightest range since the break, and on Ken’s 4 hour chart that is a bear flag sitting on support. Every average on this desk’s settled closes sits above price: the 50 day at 1.1539, the 100 day at 1.1547, the 20 day at 1.1584 and the 200 day at 1.1628, with the 50 day now beneath the 100 day. The measured move of the head and shoulders still projects to about 1.1340 to 1.1350. A tight range after a break usually resolves in the direction of the break, but a close back above 1.1540 would say the sellers have run out of road.
What would invalidate the view. The bearish branch is live. A daily close beneath 1.1455, the floor of the four session box, is the trigger, with 1.1400 and then Ken’s 1.1370 zone as the objectives. The clean version is the United States 2 year holding 4.75 or higher, a dollar index holding above 100.18, and the euro failing to rally even if oil falls again. A daily close above 1.1540, which clears Ken’s 1.1520 zone and the 50 day average, invalidates the bear flag and puts 1.1580 to 1.1584 back in play. The clean version of that is Williams sounding patient on October, a tail at the 2 year auction, and an easing of the French spread. A sweep of 1.1498 that closes back inside the box is Ken’s scenario and is not an invalidation. If the euro rallies only because the yen does, write it as a dollar story, not a euro story.
Data and event risk. Tuesday 22 September: UK public sector finances for August at 07:00; Bank of England’s Mills at 09:35; the United States ADP weekly employment count at 13:15 and the Richmond Fed survey at 15:00; Federal Reserve Bank of New York President John Williams at 15:05 and Governor Philip Jefferson at 15:20, then Richmond Fed President Tom Barkin at 18:00; a 69 billion dollar 2 year Treasury auction at 18:00; the United Nations General Assembly general debate opens, with President Trump expected to speak; the October WTI contract expires; Tokyo stays shut through Wednesday. Wednesday 23 September: the United States bans Iranian airlines worldwide; flash PMIs for the euro area, the UK and the United States; a 70 billion dollar 5 year auction. Thursday 24 September: President Trump meets President Xi at the White House; the Swiss, Norwegian and Swedish central banks decide; United States jobless claims and a 44 billion dollar 7 year auction. Friday 25 September: United States durable goods and the final University of Michigan survey with its inflation expectations. United States August PCE inflation is on 30 September, and the next Federal Reserve decision is 28 October, the same day as Chancellor John Healey’s first Budget.
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.
Brent settled at 100.34 dollars on Monday, down 3.4 per cent and its lowest since 9 September, on United Nations diplomacy and President Trump saying he would probably meet Iran’s President Pezeshkian, and it has bounced about 1.5 per cent this morning after a tanker was struck in Hormuz and Iran’s Revolutionary Guard said the war is not over. The United States 2 year closed unchanged at 4.76 per cent on the Treasury’s curve while the 10 year fell 5 basis points to 4.96 and the 10 year real yield fell 6 to 2.62: the oil drop never reached the front end. Chicago Fed President Goolsbee said the Federal Reserve can no longer look through supply shocks. October hike pricing sits roughly between 52 and 60 per cent depending on the source. The dollar index closed at 100.43, its highest close since late July, and the Nasdaq closed at a record. US diesel set another record. At 07:00 the ONS said UK borrowing was 18.3 billion pounds in August, 3.5 billion above the official forecast. Today brings New York Fed President Williams at 15:05, Governor Jefferson at 15:20 and a 69 billion dollar 2 year auction at 18:00; Tokyo is shut through Wednesday.
| 1.1492 to 1.1498 | the three session highs and Thursday’s high, the sweep Ken is watching |
| 1.1520 | Ken’s zone |
| 1.1539 to 1.1547 | the 50 and 100 day averages; a daily close above 1.1540 invalidates the bearish structure |
| 1.1580 to 1.1584 | Ken’s upper zone and the 20 day average |
| 1.1455 to 1.1465 | four sessions of lows and Ken’s 1.1465 zone; a daily close beneath 1.1455 is the bearish trigger |
| 1.1400 | the round number |
| 1.1370 | Ken’s zone and drawn target |
| 1.1323 to 1.1340 | this desk’s swing low and the measured target of the head and shoulders |
Spot cross referenced across two or three independent vendors this morning. Every equal high and equal low is read off the settled historical series, never off a quote page. 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.
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