EUR USD at major resistance as dollar weakness persists
As the US dollar continued its persistent slump on Thursday despite enduring expectations of higher US inflation and interest rates, the EUR/USD rose to revisit major resistance around the 1.2500 handle, which is the area of recent 3-year highs.
Share this:
As the US dollar continued its persistent slump on Thursday despite enduring expectations of higher US inflation and interest rates, the EUR/USD rose to revisit major resistance around the 1.2500 handle, which is the area of recent 3-year highs. US government bond yields remained elevated near new multi-year highs in the aftermath of Wednesday’s US Consumer Price Index that was significantly higher than expected for both the headline and core inflation data and Thursday’s US Producer Price Index that was significantly higher than expected for the core data. Despite rising bond yields and increasingly hawkish Fed anticipation, the dollar has been unable to shake its virtually unrelenting bearish sentiment, as the US dollar index currently wallows near 3-year lows.
Combined with a resilient euro that has remained well-supported on a rising eurozone economy and keen anticipation of monetary policy tightening by the European Central Bank, the heavily weakened US dollar has helped boost EUR/USD back up to the noted 1.2500-area resistance, slightly above which a new long-term high was reached late last month.
The week ahead will be important particularly for the euro, as key services and manufacturing data from Germany, France and the eurozone as a whole, will be released on Wednesday. More importantly, central bank meeting minutes will be released from the US Federal Reserve and European Central Bank on Wednesday and Thursday, respectively. The relative policy stances between the Fed and ECB in their last meetings, as shown in the minutes, will likely make a significant impact on EUR/USD.
As noted, the 1.2500 price area is currently the key level to watch as markets determine whether the heavily oversold US dollar will finally be supported or if it has more to lose in the short-term. If a bottom for the dollar is indeed established, any EUR/USD turn down from around 1.2500 resistance could presage another pullback targeting 1.2200-area support once again.
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USD into a Massive Week as Yields Fly and Gold Breaks
It’s a huge week with PCE and NFP, but it’s what’s happening off of the calendar that demands attention with US yields flying to fresh multi-decade highs.
USDJPY Forecast Intervention Fears Clash with Dollar Strength
Recent trading sessions have produced mixed results for the Japanese yen. By the end of last week, USD/JPY had fallen by more than 1.00%, reflecting a modest recovery in the yen. However, the start of this week has seen the pair move slightly back in favor of the U.S. dollar, posting gains of around 0.04%.
AUD/USD forecast: Currency Pair of the Week | September 28, 2026
The week has started with stocks, gold, silver and bitcoin all falling, as crude oil rebounded and bond yields pushed further higher. Trump refusing to agree to Tehran’s proposal to re-open the Strait of Hormuz has left the markets disappointed. Still, reports that mediators are expected to hold talks with the two sides on an amended version of the 7-day proposal that Iran presented, keeps hopes alive that we may see some progress.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.