EUR/USD Price Forecast - Euro Bulls Target 1.1830 With Fed Cuts and ECB Confidence

EUR/USD Price Analysis: Bulls Eye 1.1830 as Fed Cut Cycle Looms and Lagarde Signals Confidence

Euro Regains Momentum Above 1.1700

EUR/USD is trading around 1.1733, recovering from repeated failures near 1.1780, a level that has capped upside attempts across September. Support zones at 1.1710 and 1.1660 remain in play, with buyers defending each dip as dollar momentum stalls. The move follows a bullish breakout from an inverse head-and-shoulders pattern and a bull pennant, both signaling that structural support for euro strength remains intact.

ECB Signals End of Disinflation, Shifting Policy Narrative

European Central Bank President Christine Lagarde stated the “disinflationary process is over”, suggesting the eurozone economy is stabilizing. The ECB has likely reached the end of its easing path, a stark contrast to the Federal Reserve preparing to cut rates. This divergence sets the tone for relative currency performance, giving EUR/USD bulls fresh conviction. Eurozone fundamentals remain fragile, but the absence of further ECB cuts supports the euro at a time when the dollar’s policy premium is fading.

Fed Policy Path to Define Dollar Weakness

Markets are pricing a 94% probability of a 25bp cut at the September 17 FOMC meeting, with expectations of three additional cuts into 2026. U.S. labor data has softened sharply, with jobless claims hitting 263,000 and the Bureau of Labor Statistics revising 911,000 jobs lower for the prior year. Nonfarm payrolls at 22,000 in August reinforced the view that U.S. growth is slowing. Inflation at 2.9% year-over-year remains sticky, but the market believes the Fed cannot maintain restrictive policy without risking recession.

Technical Landscape Points Toward Breakout

The near-term ceiling between 1.1780 and 1.1789 remains the critical breakout zone. A close above this region would expose the three-year high at 1.1830, a level that could trigger momentum buying. The 1.1748 Fibonacci retracement acts as interim resistance, while the 1.1710 zone offers short-term higher-low support. If EUR/USD breaks below 1.1660, it would disrupt bullish structure and shift the bias back toward a dollar-driven retracement. For now, the series of higher highs and higher lows supports continuation.

Speculative Positioning and CFTC Data

CFTC figures show net long euro positions rising to €125.7K contracts, up from €119.6K the prior week. This steady build reflects speculative appetite aligning with the technical backdrop. Dollar positioning has weakened across commodities and equities, reinforcing the narrative of a softer greenback into year-end.

Macro Events That Could Trigger Volatility

The upcoming FOMC meeting is the defining catalyst. A hawkish tone could delay EUR/USD’s breakout, while confirmation of a dovish path would accelerate euro gains. U.S. retail sales, the Empire State manufacturing survey, and weekly jobless claims remain key short-term drivers. On the European side, inflation indicators and PMI surveys will determine if Lagarde’s confidence holds weight or if eurozone weakness resurfaces.

Verdict on EUR/USD

Verdict: BUY — With EUR/USD defending 1.1700 and bulls positioned for a push toward 1.1830, the balance of technical and macro data favors further upside. Dollar weakness tied to labor cracks and Fed easing supports a bullish stance. Any sustained break above 1.1780–1.1789 unlocks a path to 1.1830, while downside invalidation sits at 1.1660.

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