EUR/USD Price Forecast: Euro Holds 1.1715 With Focus on Fed Cut Odds and U.S. PCE

EUR/USD Holds Above 1.1700 After Powell’s Dovish Jackson Hole Speech

The EUR/USD pair is trading near 1.1715 in Monday’s European session after a sharp rebound late last week, triggered by Federal Reserve Chair Jerome Powell’s remarks at Jackson Hole. Powell acknowledged rising risks to the U.S. labor market while hinting that current monetary policy is “very restrictive,” effectively signaling that rate cuts could arrive as early as September. Following his comments, futures markets raised the probability of a September Fed cut to nearly 90%, up from 72% before the speech. This shift weakened the U.S. Dollar Index (DXY), which is holding near a four-week low at 97.60, giving the euro space to rally.

Key Technical Levels for EUR/USD

The pair faces a critical resistance barrier at 1.1730. A decisive break above this zone would open the way toward 1.1780 and later the July peak at 1.1830. Beyond that, the round number of 1.1900 becomes the next target, with the 1.2000 psychological level in sight if momentum holds. On the downside, strong support lies at 1.1690, a level tested several times in recent sessions. A sustained move under this zone could pull EUR/USD toward 1.1650, followed by deeper supports at 1.1580 and 1.1520.

Momentum indicators confirm the constructive bias. The 14-day RSI sits at 59, comfortably above neutral without showing overbought pressure, while the MACD is moving closer to the zero line. Price action remains above the 50-EMA at 1.1656 and the 100-EMA at 1.1647, reinforcing the bullish structure in the short term.

Eurozone Data and U.S. PCE Inflation in Focus

Markets are now bracing for the release of U.S. Personal Consumption Expenditures (PCE) inflation data on Friday, the Fed’s preferred gauge. Economists expect the 12-month core reading to rise to 2.9% from 2.8% in June. A softer print would reinforce the case for a September cut and could propel EUR/USD toward 1.1780 or higher. Conversely, a hotter-than-expected number could stall the euro’s rally and hand temporary strength back to the dollar, dragging the pair back under 1.1650.

On the European side, traders are watching the German IFO climate survey and Eurozone inflation numbers later this week. Stronger-than-expected readings could build confidence in the euro, particularly as the ECB is under less pressure to match the Fed’s pace of easing. Analysts see limited room for the ECB to cut aggressively given firmer growth in the bloc, making the euro a default alternative for investors diversifying away from the dollar.

Short-Term Scenarios for EUR/USD

If EUR/USD holds above 1.1690, momentum favors a push through 1.1730 toward 1.1780. Above that, algorithmic buying could trigger a run at 1.1830 and even 1.1900. A break there would likely reignite speculation about a year-end move toward 1.2000, in line with some bank forecasts for late 2025.

However, failure to sustain above 1.1690 risks a retracement. A slide through 1.1650 would shift sentiment back to neutral, with deeper pressure exposing 1.1580 and eventually 1.1520, erasing much of last week’s Powell-driven gains.

Market Sentiment and Positioning

Commitment of Traders data shows speculators have been slowly rebuilding euro long positions, betting on Fed easing to drive further dollar weakness. Meanwhile, retail sentiment is more cautious, with many traders wary of chasing the rally at elevated levels. The divergence suggests that while institutional money is leaning bullish on EUR/USD, retail flow is preparing for potential pullbacks — a mix that could fuel volatility around data releases.

Verdict on EUR/USD

With Powell’s dovish shift and September cut odds at 90%, the dollar remains under pressure, leaving EUR/USD in a constructive setup. But the next move hinges on Friday’s PCE release. A soft print opens the road toward 1.1780–1.1830, while a hot inflation surprise risks a return to 1.1650 or lower. For now, the pair holds a bullish tilt, but traders must respect the 1.1690 line in the sand as the key pivot for direction.

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