EURUSD: BUY 1.1705, SL 1.1645, TP 1.1760 | 26 Agustus 2025

Event to watch today:

25.08 17:00 EET. USD - Primary Home Sales

EURUSD:

The euro is supported by a sharp strengthening of expectations for a Fed rate cut as early as September and a subsequent easing cycle in 2025–2026. The Federal Reserve’s rhetoric has turned softer, with officials highlighting risks to the labor market and a readiness to respond to cooling activity. This pushes U.S. Treasury yields lower and weakens the dollar, which is fundamentally supportive for EURUSD over the current horizon.

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On the European side the picture is mixed: the ECB resumed its easing cycle in June but stresses data dependency, while weak growth risks in the euro area persist. At the same time, disinflation and a calmer energy backdrop reduce pressure on consumers, and a widening in real-rate differentials as U.S. yields slip favors the euro. Political uncertainty in the U.S. further limits demand for the dollar as a safe haven.

In the near term, the balance of factors points to further normalization higher in EURUSD as markets adapt to the prospect of a Fed cut and a softer dollar amid easier financial conditions. Focus is on fresh U.S. inflation prints and FOMC communication: a dovish tilt, absent negative macro surprises, would be a catalyst for testing higher levels in the pair.

Trading recommendation: BUY 1.1705, SL 1.1645, TP 1.1760

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