EUR/USD Price Forecast – Euro Pushes Toward 1.17 as Dollar Cracks Below 99

EUR/USD Price Forecast – Tariffs, Fed Politics and the 1.15–1.18 Battlefield

Spot EUR/USD compressed between 1.1576 support and 1.1808 resistance

The EUR/USD rate is trading in a tight but highly political range. Price has swung from a recent low around 1.1576–1.1589 (lowest in almost two months and a seven-week low) to highs near 1.1808, which marked a three-month peak in late December.
Right now, EUR/USD is oscillating around 1.1640–1.1685, repeatedly testing the 1.1640–1.1650 area that lines up with the nine-day EMA at roughly 1.1645. Above, the key resistance ladder is very clear: 1.1680, then 1.1740–1.1744, then 1.1800–1.1808, with 1.1918 sitting as the bigger structural cap from June 2021.
On the downside, the first serious floor is 1.1580–1.1589, followed by 1.1520, 1.1468, and then 1.1440 as the deeper bearish extension. The psychological 1.1500 handle divides whether this is just a corrective pullback in EUR/USD or the start of a much heavier Euro leg lower.

Greenland tariffs and ‘Sell America’ flows: macro shock driving EUR/USD

The current move in EUR/USD is not being driven by classic macro data but by a very specific political shock. Trump has tied US trade policy directly to control over Greenland, announcing that from 1 February 2026 imports from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the UK will be hit with 10% tariffs, rising automatically to 25% from 1 June if no Greenland deal is reached.
FX markets have reacted by partially reviving the “Sell America” trade. The US Dollar Index (DXY) has slipped below 99.00 and is trading around 98.8–98.9, after losing key support near 99.065, which now acts as resistance. Immediate DXY supports sit at 98.667, then 98.409, 98.151, and 97.863; the RSI on DXY has fallen below 30, which signals a formally oversold dollar.
For EUR/USD, that mix – tariffs on US allies, a weaker dollar index, higher US yields and risk-off behaviour – has pulled the pair off its lows near 1.1576 back into the 1.16–1.17 band. The Euro is benefiting from the dollar leg taking the damage even though the trade war directly targets European economies. That is exactly why this move is fragile: if tariffs are watered down or if the market decides Europe will get hit harder in growth terms, EUR/USD can flip quickly.

Fed path, rate-cut expectations and political pressure on the USD side of EUR/USD

The second driver for EUR/USD is the Federal Reserve path and the growing political risk premium around US monetary policy. Strong US labour data has pushed investors away from early and aggressive rate-cut scenarios: instead of cuts in January–April, the base case has shifted toward the June and September FOMC meetings, with expectations centred on roughly two cuts in 2026.
At the same time, legal and political attacks on the Fed are helping the Euro indirectly. Subpoenas against the Fed and Chair Jerome Powell over issues linked to the Washington headquarters renovation have raised questions about central bank independence at exactly the moment Trump is openly pushing for lower interest rates. Some large banks warn that sustained pressure on Fed independence is a downside risk for the USD, because it undermines confidence in US policy and encourages more hedging of US asset exposure.
For EUR/USD, this means the dollar is trapped between decent macro data and an increasingly noisy political backdrop. Rate-cut expectations alone would normally cap Euro strength, but the independence risk and tariff shock are preventing a full USD recovery, leaving EUR/USD stuck instead of trending.

Euro-side fundamentals in EUR/USD: data, energy and long-term targets

On the Euro side, the story is less dramatic but still important. The short-term calendar is packed with German Producer Price Index at 09:00 (Egypt time), Eurozone current account at 11:00, then German ZEW sentiment an hour later. Stronger-than-expected ZEW and a still-healthy current account tend to support the Euro, while weak PPI or deterioration in the external balance would give the dollar some room to breathe.
One structural drag on EUR/USD comes from energy. Higher energy prices, especially in natural gas, put pressure on the Eurozone’s trade balance and can limit how far the Euro can run, even when the dollar is weak. That’s exactly why some analysts are cautious about chasing the pair far beyond 1.18 in the current environment.
Longer term, major banks still broadly see EUR/USD higher by late 2026, but with trimmed expectations. One camp has cut its year-end EUR/USD forecast from 1.24 to around 1.20, expecting that level to be reached later rather than earlier. Another house still talks about 1.22 by the end of 2026. The reasoning is consistent: narrowing interest-rate differentials, more hedging against US assets, and incremental rotation into European assets as Eurozone growth stabilises. Even those bullish houses, however, underline that the path higher is uneven and that short-term dollar rallies remain very likely.

Daily chart structure in EUR/USD: bearish bias below 50-day EMA, but 1.1580 floor is visible

Technically, the EUR/USD daily chart still carries a bearish bias, even after the rebound. Price is trading below the 50-day EMA currently clustered around 1.1670, and oscillating around the nine-day EMA near 1.1645. The 14-day RSI sits in the 44–45 region, neutral-to-bearish, while MACD signal lines are sloping down, confirming that sellers still have medium-term control.
Clear support levels are stacked on the downside: the recent low at 1.1576–1.1589, then 1.1520, then 1.1468, and finally 1.1440, which marks a deeper bearish extension level. The psychological 1.1500 handle is the line where pressure would turn into a more structural Euro setback rather than just a tactical dip.
On the topside, resistance starts around 1.1680, continues at 1.1740–1.1744, then 1.1800, then 1.1808, the recent three-month high, before 1.1918, the highest level since mid-2021. Importantly, EUR/USD is trading below both the short- and medium-term moving averages, which caps the upside unless the pair can base above 1.1670–1.1740. Right now, the structure says: medium-term downtrend, short-term bounce.

Intraday structure for EUR/USD: breakout above 1.1694 or snapback toward 1.1640–1.1576

On the intraday side, EUR/USD has briefly pushed through resistance around 1.1640–1.1650 and tested the 1.1690–1.1700 band, with one key level at 1.1694 acting as the immediate breakout pivot. Around 1.1684–1.1685, the pair has been trading near the upper edge of a short-term ascending channel that still sits inside a larger down-trending structure.
The 50-period and 200-period moving averages on short-term charts are starting to converge, hinting that the directional bias could be shifting away from pure downside toward a more balanced market. At the same time, the intraday RSI has pushed toward or above 70, flagging overbought conditions. That opens the door to a pullback, especially given that the dollar index is oversold with an RSI below 30 and DXY sitting around 98.837 after losing channel support.
If EUR/USD definitively holds above 1.1694, the next intraday upside checkpoints are 1.1744 and then the 1.1800–1.1808 band. If the breakout fails, the first downside retracement levels are 1.1640, then the previous low zone around 1.1576–1.1589. In other words, the pair is one failed spike away from retesting the lower half of the 1.15–1.18 range.

Trading map for EUR/USD: how the 1.1560–1.1730 band is being used

The way trade setups are clustered tells you a lot about how professionals see EUR/USD right now. One popular structure is to use 1.1560–1.1580 as an accumulation area and 1.1730–1.1800 as a distribution zone.
A typical long idea is to buy EUR/USD around 1.1560, targeting 1.1800, with a stop near 1.1470. That trade assumes that the current geopolitical and Fed-related shocks are already largely priced in below 1.16, and that any additional tariff headlines or Fed noise will struggle to push the pair far under the 1.1500 psychological floor without a true macro deterioration in the Eurozone.
On the flip side, a classic short idea is to sell EUR/USD near 1.1730, looking for a move down toward 1.1500, with a stop at 1.1800. That setup leans on the daily downtrend, the overbought intraday RSI and the oversold dollar index, and it recognises that seasonal patterns in February typically favour the USD. The underlying bet is simple: the first test of 1.1740–1.1800 is more likely to fail than to break cleanly while the Fed is still resisting a deep rate-cut cycle.
Put together, these structures show a market that sees two-sided risk and respects the 1.1560–1.1730 corridor as the core zone for range trading, not a one-way trend.

Positioning stance on EUR/USD: tactical sell on strength, strategic hold

Combining the macro shock, central-bank politics and the technicals, EUR/USD is not in a clean trend; it is in a hard political range. Tariffs tied to Greenland and open attacks on Fed independence are clearly negative for the dollar and have already dragged DXY below 99.00 and lifted EUR/USD off 1.1576 back into the mid-1.16s. At the same time, the pair is still trading below the 50-day EMA around 1.1670, the 14-day RSI sits near 45, and the bigger chart still points to a downtrend with clear risk of retests toward 1.1580–1.1520 and even 1.1468–1.1440 if the shock fades.
Medium term, large banks projecting EUR/USD at 1.20–1.22 by late 2026 are effectively saying that Euro appreciation is real but slow, and that upside from current 1.16–1.17 levels is capped for now. Short term, intraday readings show an overbought Euro and an oversold dollar, with price threatening the 1.1694–1.1744 resistance band.
On that basis, my stance is straightforward: EUR/USD is a HOLD with a tactical bearish bias. Strength into the 1.1730–1.1800 area favours selling rallies, while dips into 1.1560–1.1500 favour buying weakness, as long as the geopolitical shock and Fed noise stay unresolved. The pair is not a clean directional buy or sell at 1.16–1.17; it is a range instrument where disciplined level-based trading makes more sense than chasing headlines in either direction.

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