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The EUR/USD pair declined for six days, but this week the bulls have strong reasons to launch a new advance. The pair remained virtually unchanged for seven full days, but eventually we saw a reaction to imbalance 20, while imbalance 21 was not invalidated. Thus, both bullish patterns remain valid, and a buy signal was effectively formed when the price rejected imbalance 20. Of course, at any point, something may not go according to plan. The key risk for the bulls at present is the US inflation report due on Friday. If it comes in above forecasts, accelerating inflation in August could bring the FOMC closer to tightening monetary policy. However, I still do not expect such a move in September. I would also note that market expectations for the monetary policies of the ECB, Bank of England, and Federal Reserve are highly inconsistent with the economic reality. By the end of 2027, the market expects another two rate hikes from the ECB, three from the Bank of England, and three from the Federal Reserve. While I believe the ECB could deliver three rate hikes, I have doubts regarding the Bank of England and the Federal Reserve. In the United Kingdom, inflation is at a relatively low level, while in the United States, the labor market is preventing a safe tightening of monetary policy. In my view, the euro currently occupies the most favorable position in the market.
Overall, in my view, the information backdrop continues to strongly support the bulls. First, any chart clearly shows that the euro began its rise from relatively low levels, compared with the average price over the past year. This means that it still has room for further growth. Second, the market continues to question an FOMC monetary-policy tightening in September, regardless of what Warsh says. Third, US economic data have recently been disappointing. Fourth, geopolitics no longer supports the bears or the dollar. Fifth, the ECB may implement another monetary-policy tightening as early as this week. Sixth, the US Treasury has decided to increase its purchases of long-term bonds, reducing demand for the dollar. Seventh, a new trade war between the United States and Canada and between the United States and China could begin in the near future. Eighth, the US labor market in 2026 is performing only marginally better than in 2025, which could undermine the market's hawkish expectations. Therefore, I currently see no reason for a bearish advance.
US labor-market data over the past 4–6 months have more often been weak than strong, inflation has slowed over the past two months, and GDP growth has decelerated over the past three quarters. These three factors make me question an FOMC rate hike not only in September but also through the end of the year. In my view, the bears' only current opportunity lies in a new escalation in the Middle East, rather than in individual economic reports.
The current chart structure indicates that bullish momentum is being maintained. The price has completely filled the latest bullish imbalance 21 and even touched the previous bullish imbalance 20. The combined reaction to these two patterns could bring the bulls back into the market and resume the upward move. The bears will have a technical basis for an advance only if both patterns are invalidated. The euro also needs to prevent the pound from declining, as the pound does not have such a strong support zone.
There was virtually no economic backdrop on Wednesday. Therefore, the bulls' attempts to move higher can be linked to tomorrow's ECB meeting, where a hawkish decision is expected. Christine Lagarde could also support the euro and the bulls if she indicates that the ECB is prepared to continue tightening monetary policy.
There are still numerous reasons for the bulls to remain active in 2026, and even the outbreak of war in the Middle East has not reduced their number. Structurally and globally, Trump's policy, which led to a significant decline in the dollar last year, has not changed. At present, I see no significant factors supporting the US currency despite the FOMC's formally hawkish stance. Geopolitics, which supported demand for the US currency through much of the first half of 2026, is no longer doing so. The conflict in the Middle East remains unresolved, but there are currently no new hostilities from either Iran or the United States.
US and European Union Economic Calendar:
On September 10, the economic calendar contains five entries, among which I would highlight Christine Lagarde's remarks following the ECB meeting. The economic backdrop may influence market sentiment throughout Thursday.
EUR/USD Forecast and Trading Tips:
In my view, the pair remains in the process of forming a bullish trend that paused for an entire year. The information backdrop shifted sharply in favor of the bears six months ago, but the trend itself cannot be considered canceled or complete. From a long-term perspective, I would say that the pair is trading in a range. However, the range does not invalidate the broader bullish trend. Therefore, the bulls may well continue their advance after two liquidity sweeps from clearly defined lows. At present, bullish traders have an excellent support zone in the form of imbalance 21, while a buy signal has already formed within imbalance 20. I consider 1.1797 and 1.1850 as targets for a new upward move in the euro.
*এখানে পোস্ট করা মার্কেট বিশ্লেষণ আপনার সচেতনতা বৃদ্ধির জন্য প্রদান করা হয়, ট্রেড করার নির্দেশনা প্রদানের জন্য প্রদান করা হয় না।
ইন্সটাফরেক্স বিশ্লেষণমূলক পর্যালোচনাগুলো আপনাকে মার্কেট প্রবণতা সম্পর্কে পুরোপুরি সচেতন করবে! ইন্সটাফরেক্সের একজন গ্রাহক হওয়ায়, দক্ষ ট্রেডিং এর জন্য আপনাকে অনেক সেবা বিনামূল্যে প্রদান করা হয়।
