EURUSD: BUY 1.1625, SL 1.1575, TP 1.1700 | 28 August 2025

EURUSD: The euro is receiving moderate support amid waning confidence in the independence of the U.S. Federal Reserve after headline news out of Washington. Political risks around the regulator have reinforced expectations for a softer U.S. rate path and narrowed the yield differential that typically favors the dollar. During the Asia–Europe session the pair is holding near 1.16, consistent with a cautious bid for risk and limiting the USD’s upside potential.

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For the euro area today, Germany’s consumer sentiment expectations and the broader flow of inflation/growth headlines matter, but the key driver remains in the U.S.: the repricing of the Fed’s rate trajectory and the short-term risk premium in the dollar. Any signs of accelerated easing in the U.S. (declines in short-dated Treasuries) would support EUR through the interest-rate channel and capital flows.

Risks to the bullish scenario include a sudden clarification of the situation around the Fed or unexpectedly strong U.S. data, either of which could restore demand for the dollar. From a fundamental perspective, absent a sustained positive U.S. surprise, the balance of factors still favors a moderate EUR recovery.

Trading recommendation: BUY 1.1625, SL 1.1575, TP 1.1700

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