Euro Extends Bullish Momentum
EUR/USD Forecast: Euro buyers aim to retain control ahead of Fed meeting
The EUR/USD pair extended its bullish momentum on Tuesday, trading near 1.1800 – its highest level since early July – after closing Monday in positive territory. The US Dollar continues to struggle for demand as investors turn cautious ahead of the Federal Reserve’s two‑day policy meeting, allowing the Euro to hold firm.
This week, the Euro has shown its strongest gains against the US Dollar, while also posting modest advances versus most other major currencies:
The heat map highlights that the Euro remains broadly supported, with the most pronounced strength against the Greenback.
With no high‑impact data at the start of the week, improving risk appetite weighed heavily on the US Dollar. Adding to the pressure, the US Senate confirmed White House economic adviser Stephen Miran to the Federal Reserve Board. Miran, widely viewed as dovish, will now have a vote in the upcoming meeting – a development that further undermines the Dollar.
In Europe, Tuesday’s German ZEW survey showed the Current Situation Index falling to ‑76.4 in September from ‑68.6, while the Economic Sentiment Index improved to 37.3 from 34.7. Meanwhile, Eurozone Industrial Production rose 0.3% MoM in July, following a 0.6% contraction in June. These figures had little immediate impact on the Euro’s performance.
Later in the day, the US Census Bureau will release Retail Sales data for August. A stronger‑than‑expected print could provide temporary support for the Dollar, but investors may hesitate to bet on a sustained recovery ahead of the Fed’s decision.
US equity index futures were last seen up between 0.1% and 0.35%, reflecting a constructive risk mood. If risk flows continue to dominate, EUR/USD could extend its upward trajectory.
Technically, the pair is trading near the upper boundary of its ascending channel. The Relative Strength Index (RSI) on the 4‑hour chart remains slightly above 70, signaling strong momentum but also hinting at overbought conditions.
Overall, the Euro remains in control as the Dollar struggles ahead of the Fed’s policy meeting. Unless the 1.1800 resistance caps the rally, EUR/USD could continue to push higher, with 1.1830 and 1.1900 in focus. Market participants will closely watch the Fed’s tone and updated projections to determine whether the Euro’s bullish momentum can be sustained.