EUR/USD appears choppy below 1.1700

EUR/USD left behind part of the recent advance and slipped back to the sub-1.1700 region at the beginning of the week, always on the back of the Greenback’s marked recovery and the widespread caution among market participants ahead of the release of the FOMC Minutes (Wednesday) and Chief Powell’s speech at the Jackson Hole Symposium (Friday).

EUR/USD Technical Overview

Resistance is first seen at the July 24 weekly high of 1.1788, followed by the July 1, 2025 ceiling at 1.1830. Beyond that lies the September 3, 2021 peak at 1.1909, just below the psychological 1.2000 barrier.

On the other hand, interim support comes at the 100-day SMA at 1.1451 followed by the August 1 low of 1.1391, and then the May 29 weekly floor at 1.1210.

Additionally, momentum signals remain mixed: The Relative Strength Index (RSI) has eased toward the 52 mark, suggesting fading upside momentum, while the Average Directional Index (ADX) just above 12 continues to point to a weak, colourless market.

Outlook: Dollar remains in the driver’s seat

For now, EUR/USD looks set for consolidation. A clearer directional break may depend on the Fed’s next move or a meaningful easing in global trade tensions. Until then, US Dollar flows are likely to remain the dominant driver.

Fundamental Overview

The Euro (EUR) lost momentum in a negative start to the week, setting aside Friday’s bullish attempt. That said, EUR/USD came under fresh downside pressure and slipped back to the vicinity of 1.1650 on Monday. Despite the knee-jerk, the pair kept navigating its upper end of the monthly range.

Meanwhile, the improved sentiment surrounding the US Dollar (USD) negatively impacted the risk complex and triggered a corrective move in spot prices, as investors remained attentive to the Trump-Zelenskiy meeting and the fragile geopolitical situation. Adding to the broad prudent stance, caution remains in place ahead of the release of the FOMC Minutes (Wednesday) and the speech by Chair Jerome Powell at the Jackson Hole Symposium (Friday).

Trade détente boosts risk mood

In past weeks, markets welcomed a temporary reprieve in global trade tensions. Washington and Beijing agreed to a 90-day extension of their trade truce, just hours before tariff increases were due to take effect. President Trump signed an executive order pushing the deadline out to November 10, with China pledging to reciprocate. Under the deal, existing tariffs remain — 30% on Chinese goods entering the US and 10% on US exports heading the other way.

The announcement followed a US–European Union (EU) trade accord that trimmed most European tariffs on US exports to 15% from a threatened 30%. Crucially, aerospace, semiconductors, and agricultural goods were exempt from new duties, while steel and aluminium remained taxed at 50%. In return, the EU promised $750 billion in US energy purchases, more defence orders, and more than $600 billion in American investments.

The market received mixed reactions: German Chancellor Friedrich Merz cautioned that the deal could weigh on Europe’s already strained manufacturing base, while French President Emmanuel Macron called it a “dark day” for the continent.

Central banks cautious, not committed

The Federal Reserve (Fed) held interest rates steady at its most recent meeting. Chair Jerome Powell struck a measured tone, balancing his remarks against dovish votes from Governors Christopher Waller and Michelle Bowman.

In Frankfurt, European Central Bank (ECB) President Christine Lagarde described eurozone growth as “solid, if a little better.” Markets, however, have pushed back expectations for the first rate cut until spring 2026.

Positioning turns less bullish

Speculators have been pulling back. Commodity Futures Trading Commission (CFTC) data through August 12 showed net long positions in the Euro shrinking to a six-week low near 115.4K contracts. Commercial players, however, increased their net short positions to just over 167K contracts, a two-week high. Open interest rose to around 825K contracts after two consecutive weekly pullbacks.