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Published: 21 August 2026,03:38
Daily Market Analysis New
Key Takeaways:
*EUR/USD has climbed toward 1.1700, reaching multi-month highs as the euro benefits from broad U.S. dollar weakness.
*Expanded U.S. Treasury buybacks have pushed yields lower, weakening the dollar, while markets increasingly expect a 25bp ECB hike in September, providing further support for the euro.
*Today’s Eurozone and U.S. flash PMIs, energy prices, Middle East developments, and Jackson Hole will be crucial. A softer U.S. outlook could extend EUR gains.
The euro has emerged as one of the strongest performers among G10 currencies in recent sessions, advancing to multi-month highs against the U.S. dollar and outperforming most peers. EUR/USD has traded near the 1.1700 area, reflecting a clear shift in relative momentum that has favoured the single currency. This strength stands out in a period when several other major currencies have faced more mixed or defensive conditions.
The primary catalyst has been a pronounced bout of U.S. dollar weakness. The Treasury Department’s decision to expand longer-dated bond buybacks helped drive a sharp decline in U.S. yields, reducing the dollar’s interest-rate support and prompting broad selling of the greenback. At the same time, market pricing has increasingly incorporated expectations of further European Central Bank tightening. With the deposit rate currently at 2.25%, traders assign a high probability to a 25-basis-point increase at the September meeting, which would narrow the policy differential with the Federal Reserve and provide structural support for the euro.
Looking ahead, several near-term factors could pivot the currency’s trajectory. Today’s flash PMI releases for the euro area and the United States will offer an early gauge of relative growth momentum and could influence rate expectations on both sides of the Atlantic. Developments in energy markets and the Middle East remain critical, as any sustained rise in oil prices would complicate the inflation outlook and potentially alter the ECB’s policy calculus. The upcoming Jackson Hole symposium, particularly Federal Reserve Chair Kevin Warsh’s remarks, represents another key risk event that could reprice U.S. policy expectations and reverse recent dollar softness. Finally, any shift in the probability of a September ECB hike—whether through softer data or more cautious central bank communication—would quickly test the euro’s recent gains.
Overall, the euro’s leadership among G10 currencies rests on a favourable combination of dollar-side weakness and rising ECB rate expectations. While this backdrop remains constructive in the near term, the currency’s path is likely to be sensitive to incoming growth data, energy price dynamics, and high-profile policy signals in the weeks ahead.
Technical Analysis
The EUR/USD pair has undergone a bullish structural break after breaking above its long-term downtrend trendline near 1.1400, signaling a significant shift in the pair’s broader technical structure. Since the breakout, EUR/USD has continued to form a higher-high and higher-low price pattern, further confirming the prevailing bullish bias.
The latest price action has provided another positive signal as the pair successfully broke above the 1.1618 resistance level. This breakout indicates that bullish momentum remains strong and that buyers continue to gain control of the market.
Should EUR/USD sustain its momentum above 1.1618, the pair could extend its current bullish rally toward the next major resistance level near 1.1800. This psychological level is likely to attract stronger selling pressure and could become the next key test for the ongoing uptrend.
Resistance Levels:1.1805, 1.1955
Support Levels: 1.1618, 1.1462
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