Euro Technical Forecast: EUR/USD Holds the Line as September Battle Takes Shape

Euro Technical Forecast: EUR/USD Weekly Trade Levels

• EUR/USD has defended pivotal support for a second consecutive week following the pullback from August highs.
• Weekly momentum is attempting to stabilize in positive territory after reaching its strongest levels since May.
• The September opening range is beginning to take shape as price remains caught within a broader multi-month consolidation.
• The ECB rate decision and U.S. CPI / PPI headline next week’s event risk as markets reassess the relative policy outlook.
• Resistance ~1.1632/33, 1.1746/75 (key), 1.1850- Support 1.1564/78 (key), 1.1472, ~1.14

EUR/USD heads into September at an important technical crossroads after the August recovery lost momentum near resistance. The larger technical picture remains finely balanced, with neither bulls nor bears able to establish control, leaving the Euro vulnerable to a larger directional move. With the ECB rate decision and U.S. CPI on tap next week, the stage is set for a critical stretch that could provide much-needed clarity heading into the September rate decision the following week. Battle lines drawn on the EUR/USD weekly technical chart.

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Euro Price Chart – EUR/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; EUR/USD on TradingView

Technical Outlook: In last month’s Euro Technical Forecast we noted that EUR/USD had rebounded off major support and that, “losses would need to be limited to the 1.1469 IF price is heading higher on this stretch. Look for a larger reaction near 1.1650 IF reached.” The rally extended more than 3.1% off the July low with a four-week advance registering a close high at 1.1679 pulling back.

A decline of more than 1.2% has held key support for the past two weeks at 1.1564/78, where the 38.2% retracement of the June advance converges on the January swing low. The focus heading into September is on a possible inflection off this pivotal zone as the monthly opening range begins to take shape just above. Note that the momentum trigger we highlighted last month has now broken with weekly RSI attempting to stabilize in positive territory after stretching to the highest levels since May.

EUR/USD Weekly RSI

The 52-week and 200-day moving averages now converge at 1.1632/33, with key resistance unchanged at 1.1746/75. This region, defined by the yearly open, the 2025 high-week close, and the 2025 high close, has served as a major inflection zone since June of last year. The 75% parallel of the broader upslope is set to converge on this threshold over the next few weeks, further highlighting its technical significance. A breach / weekly close above would be needed to invalidate the yearly downtrend and threaten the next leg higher in price. Subsequent resistance objectives are eyed at the yearly high-week close (HWC) and the April high at 1.1850 and a longer-dated extension at 1.1917.

A break below the monthly range low would threaten a deeper correction towards the 61.8% retracement at 1.1472 with the median-line of the multi-year upslope currently near ~1.14. Key weekly support remains unchanged at 1.1355/69- a region defined by the 38.2% retracement of the 2025 advance, the April high-week close and the 2026 low close. A break / weekly close below this zone would be needed to fuel the next major leg of the January downtrend.

Bottom line: EUR/USD is carving the September opening range just above pivotal support with major event risk on tap next week. We may still be in a massive multi-month consolidation pattern here so look for a breakout to offer guidance. From a trading standpoint, losses would need to be limited to 1.1472 IF Euro is heading higher on this stretch with a close above 1.1775 needed to fuel the next major leg of the rally.

Today’s stronger-than-expected Non-Farm Payrolls report reinforced the resilience of the U.S. labor market, shifting the focus squarely back to inflation and the outlook for Fed policy. Next week brings significant event risk on both sides of EUR/USD, with the European Central Bank widely expected to raise rates on Thursday before the release of the August U.S. Consumer Price Index (CPI) on Friday.

With an ECB hike largely anticipated, the tone of the accompanying guidance could prove more important for the euro than the decision itself. In the U.S., another firm inflation reading following today’s strong employment report would strengthen the case for additional Fed tightening and could offer some support for a broader Dollar recovery. Conversely, a meaningful decline in the pace of price growth could keep give the Fed more latitude to hold rates into the close of the year. While this is not the Fed’ preferred gauge, it will be the final inflation read ahead of this month’s rate decision. Stay nimble into the releases and watch the weekly close for guidance. Review my latest Euro Short-term Outlook for a closer look at the near-term EUR/USD technical trade levels.

Key Euro / US Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

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--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex