The single currency posted a 0.37% loss against the US dollar at the end of the North American session on Monday on positive news about US-Iran talks and comments from ECB President Lagarde surprised investors who downplayed second-round inflation problems. At the time of writing, the EUR/USD rate is 1.1428.
EUR/USD falls as Fed hike predictions outweigh Lagarde’s comments on inflation
Optimism among investors boosted the dollar as the United States lifted sanctions on Iran for 60 days and U.S. Vice President J.D. Vance said negotiations had laid a “good foundation” for a potential peace deal. Meanwhile, Iran has denied talks about its nuclear program.
Meanwhile, fighting for Lebanon is coming to an end following Iran’s threat to close the strait and US President Trump’s response that he will resume attacks on Tehran if it closes Hormuz.
A lack of news in the U.S. and limited economic data have kept investors away from the Fed’s interest rate expectations. Last week, the mood of the US central bank was somewhat hawkish, with almost half of its members supporting an interest rate enhance.
According to Prime Terminal, money markets see a 45% chance of the Fed raising interest rates at its July 29 meeting.
Some commercial banks, including Bank of America (BoFA) and Deutsche Bank, expect the US central bank to enhance interest rates at its September meeting. BoFA anticipates three increases of 25 basis points in 2026, scheduled for September, October and December. However, Deutsche Bank expects two increases of 25 basis points each, in September and December.
In Europe, ECB President Lagarde said the inflation shock “is too big to ignore”, adding that there was no evidence of “unanchoring of inflation expectations or second-round effects that would threaten our target”.
Her comments were perceived as moderately dovish, with the ECB’s base rate not expected to exceed the bank’s neutral range of 1.75%-2.50%.
On Tuesday, the euro zone report will release preliminary PMIs for France, Germany and the entire bloc. In the USA
The upcoming U.S. economic calendar includes S&P Global Flash PMI indexes and real estate data. Thursday’s schedule is packed with Q1 2026 GDP data, the Fed’s preferred measure of inflation, the Personal Consumption Expenditures (PCE) Price Index and jobless claim reports.
EUR/USD Price Forecast: Technical Outlook
On the daily chart, EUR/USD is trading at 1.1428, extending its decline in a parallel descending channel and holding below the clustered uncomplicated moving averages (SMA) around 1.1653, strengthening the bearish sentiment in the brief term. The pair is trading below the break zone of the former resistance trendline near 1.1660 and remains confined deep in the channel, while the Relative Strength Index (RSI) at around 32 is hovering near the oversold area, suggesting that the bearish momentum is extended but not yet reversed.
Upside, initial resistance appears near the channel lower extension near 1.1483, with a more crucial supply zone formed by the triple SMA cluster near 1.1653, the channel top at 1.1656 and the trendline breakout level at 1.1660. If buyers were to break through this dense band, the next noticeable barrier would be a horizontal resistance level near 1.1849, where a larger corrective bounce would likely be met with renewed selling pressure.
(The technical analysis for this story was written with the aid of an AI tool.)
Price in euros this week
The table below shows the percentage change of the euro (EUR) against the major currencies traded this week. The euro was strongest against the US dollar.
| USD | EUR | GBP | JPY | BOOR | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | 0.02% | 0.05% | 0.02% | 0.03% | -0.01% | 0.00% | |
| EUR | 0.02% | -0.02% | 0.02% | 0.00% | -0.00% | -0.03% | -0.00% | |
| GBP | -0.02% | 0.02% | -0.06% | 0.02% | 0.00% | -0.02% | 0.02% | |
| JPY | -0.05% | -0.02% | 0.06% | -0.04% | 0.03% | 0.18% | -0.03% | |
| BOOR | -0.02% | -0.01% | -0.02% | 0.04% | 0.06% | 0.22% | 0.02% | |
| AUD | -0.03% | 0.00% | 0.00% | -0.03% | -0.06% | -0.04% | 0.02% | |
| NZD | 0.00% | 0.03% | 0.02% | -0.18% | -0.22% | 0.04% | 0.02% | |
| CHF | -0.00% | 0.00% | -0.02% | 0.03% | -0.02% | -0.02% | -0.02% |
The heat map shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column and the quote currency from the top row. For example, if you select Euro from the left column and move along the horizontal line to US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
