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The EUR/USD pair declined for six days, but this week the bulls nevertheless launched a small attack. The attack has every chance of ending very quickly because, for example, the euro was declining today, and tomorrow, if the U.S. inflation report shows an increase compared with July, the pair's decline could well continue. However, tomorrow is still some way off, so today we will focus on today. A few hours ago, the ECB announced the expected decision to raise interest rates by 0.25%. This decision was accompanied by fairly active selling of the euro, which looks ambiguous. I understand that traders had plenty of time to price in the ECB's policy tightening. But if the Federal Reserve also tightens policy next week, will the dollar decline? After all, traders also had enough time to price in the most likely Fed scenario. I doubt it. The euro was fortunate to remain within imbalance 21 today, which preserves its chances of resuming its advance. In my view, traders had no reason whatsoever to sell the euro today, but the U.S. inflation report and the Fed meeting lie ahead. The information backdrop could once again change completely within a few days.
Overall, in my view, the information backdrop continues to support the bulls. First, any chart clearly shows that the euro began its rise from relatively low levels over the past year compared with the average price over the same period. This means that it still has upward potential. Second, the market continues to doubt that the FOMC will tighten monetary policy in September, regardless of what Warsh may say. Third, U.S. economic data has recently been disappointing in most cases. Fourth, geopolitics is no longer supporting the bears or the dollar. Fifth, the ECB has carried out another monetary policy tightening in 2026. Sixth, the U.S. Treasury has decided to increase its purchases of long-term bonds, which reduces demand for the dollar. Seventh, a trade war between the United States and Canada has officially begun. Eighth, the U.S. labor market in 2026 is performing only slightly better than in 2025, which could put an end to the market's hawkish expectations. Therefore, I currently see no reason whatsoever for a bearish advance.
U.S. 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 has also declined over the past three quarters. These three factors make me doubt that the FOMC will raise interest rates not only in September but also before the end of the year. In my view, the bears' only opportunity at present lies in a full-scale escalation in the Middle East, rather than in individual economic reports.
The current chart indicates that the 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 the advance could resume. The bears will have a technical basis for an advance only if both patterns are invalidated. The euro also faces the task of saving the pound, which has no support zone of its own.
The economic backdrop on Thursday allowed the bulls to launch a new attack, as the ECB decided to tighten monetary policy. The U.S. Producer Price Index, by contrast, supported the U.S. currency, as it came in at 5.4% in August, above market expectations. However, I would note that tomorrow's inflation report is more important than the PPI. The PPI itself accelerated quite predictably.
There are still a huge number of reasons for the bulls to attack 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 U.S. currency, despite the FOMC's formally hawkish stance. Geopolitics, which supported demand for the U.S. currency for most of the first half of 2026, is no longer doing so.
News calendar for the United States and the European Union:
On September 11, the economic calendar contains two entries, of which U.S. inflation is the one that cannot be overlooked. The economic backdrop could affect market sentiment in the second half of Friday's trading session.
EUR/USD forecast and trading advice:
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. In the long term, I would say that the pair is trading within a range. However, the range does not invalidate the broader bullish trend. Therefore, the bulls may well continue their advance following the two liquidity sweeps in June and July. 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 to be the targets for a new advance in the euro. However, it is important that the upcoming key reports and events do not support the dollar.
*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।
