EUR/USD

Key insight

The EUR is caught between a hawkish ECB repricing (September hike ~80% priced in) and a still-wide 175bp US-EU rate differential that structurally favours the dollar — a clean directional break requires either a Fed pivot or an ECB surprise hike.

EUR/USD is consolidating just below the key 1.1535–1.1516 resistance zone after tagging its highest level since June 16, with the rate differential (Fed at 3.75% vs ECB at 2.00%) capping further EUR upside.

Main risk

Fed hawkish re-pivot on 3 FOMC dissents

Three FOMC members dissented in favour of a rate hike at the last meeting; any further hawkish Fedspeak or hot US data could reignite USD strength and push EUR/USD back below the 1.1450 prior support.