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26.08.202612:22 Forex Analysis & Reviews: EUR/USD – Price Analysis and Forecast: Diverging Fed and ECB Rate Expectations Support the Pair

Relevance up to 05:00 2026-08-27 UTC--4

Exchange Rates 26.08.2026 analysis

Today, Wednesday, EUR/USD is struggling to capitalize on a moderate rebound from the weekly low set the previous day but is not ready to decline. The pair remains above 1.1660 and is close to the highest level since May 14, reached last week. Traders are awaiting new signals from the Fed regarding interest rates.

Given the emerging signs of easing price pressures in the United States and weakness in the labor market, expectations that monetary policy will remain unchanged at the FOMC meeting on September 15–16 are becoming increasingly relevant. In contrast, three sources told Reuters that European Central Bank (ECB) officials are prepared to raise interest rates at the next meeting in September to counter the consequences of the conflict with Iran. Diverging Fed and ECB outlooks continue to provide some support for EUR/USD.

Exchange Rates 26.08.2026 analysis

Meanwhile, the US Treasury's bond-buying strategy, combined with easing inflation concerns amid falling oil prices, is driving down US Treasury yields.

This, together with renewed hopes for a diplomatic resolution to the six-month conflict between the United States and Iran, is limiting gains in the US dollar. Therefore, any significant corrections in EUR/USD are likely to be limited by active buying.

Today, it would be preferable to wait for the release of the US Personal Consumption Expenditures (PCE) index to identify better trading opportunities. On Friday, attention should be paid to Fed Chair Kevin Warsh's speech at the Jackson Hole symposium. The Fed's monetary policy outlook will have a significant impact on short-term fluctuations in the US dollar. At the same time, favorable fundamental conditions are preventing traders from taking bearish positions in EUR/USD.

From a technical perspective, EUR/USD is holding above the 200-day simple moving average (SMA), favoring the bulls. Support is found near 1.1650. Resistance is provided by the area around the round-number level of 1.1700, including the monthly high, where a sustained upward move would open the way toward the next round-number level of 1.1800. At the same time, the oscillators are positive, confirming the bulls' advantage in the market, while the Relative Strength Index (RSI) is in overbought territory, indicating bullish consolidation. Therefore, the path of least resistance for the pair is to the upside.

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Irina Yanina,
Analytical expert of InstaSpot
© 2007-2026
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