EUR/USD Price Forecast: Euro Surges Past 1.1730, Eyes 1.1835 Resistance on Fed Pivot

EUR/USD Breaks Out of Prolonged Consolidation

The euro-dollar pair (EUR/USD) has finally escaped its August deadlock, surging above 1.1730 and confirming a bullish breakout from the symmetrical triangle that had capped price action for weeks. Buyers seized control after repeated tests of the 1.1670 area, forcing a decisive candle through resistance and flipping sentiment firmly in favor of the euro. This rally unfolded after several liquidity sweeps cleared weaker long positions, allowing institutional demand to drive price into higher territory. On the 2-hour chart, higher lows were already forming, and the breakout confirmed momentum was building beneath the surface. The conviction behind this move signals that buyers are preparing for a larger structural shift, not a one-off rebound.

Momentum Indicators Confirm Strength in EUR/USD

Technical signals underline the scale of this breakout. The Relative Strength Index surged to 70, confirming overbought but powerful bullish conditions, while the MACD histogram flipped positive with widening signal lines, a classic hallmark of sustainable momentum. Bollinger Bands are expanding after weeks of contraction, which usually precedes explosive directional moves. The 50-day moving average that had been an unbreakable ceiling around 1.1690 was finally cleared, converting into fresh support. The market structure on both the 4-hour and daily charts reflects a break in consolidation, with room to extend toward 1.1780–1.1835 and even 1.1880 if buyers hold conviction.

Eurozone Data and U.S. Macro in the Spotlight

Fundamentals now become the deciding factor. On the eurozone side, the German Ifo Business Climate index edged higher to 88.7, reflecting modest stabilization in business sentiment. Traders will focus this week on German and Spanish CPI prints to assess whether inflation remains resilient enough to challenge the ECB’s current wait-and-see stance. Across the Atlantic, U.S. macro data will dominate. Durable Goods Orders, CB Consumer Confidence, Q2 GDP, and the Core PCE Price Index are all on the calendar. Since Powell’s Jackson Hole speech shifted attention toward labor-market risk, jobless claims data will also carry unusual weight. Any signal of cooling labor momentum will weaken the dollar, reinforcing the euro’s advance.

Shifting Market Structure Around 1.1600 and 1.1730

Before the breakout, EUR/USD had been clinging precariously to the 1.1600 handle. RSI readings around 40.8 and price hugging the lower Bollinger Band indicated bears were in control, and a drop below 1.1590 could have dragged the pair toward 1.1574 or even 1.1400. But the market flipped decisively. Once 1.1698 and then 1.1730 were cleared, the structure changed from defensive to aggressive. The consolidation block that had been capping upside is now serving as a springboard for buyers, and institutional flows are visibly positioned for continuation. Support is now layered at 1.1670–1.1640, with deeper protection around 1.1615. Bulls have effectively drawn a line in the sand, with momentum favoring further upside so long as these levels hold.

Institutional Positioning and Liquidity Dynamics

The nature of the breakout signals the involvement of institutional liquidity. Analysts noted that EUR/USD executed a textbook sweep of short-side liquidity before charging higher, a move designed to shake out weak hands and trigger a shift in positioning. These types of setups are often driven by larger players with conviction flows similar to what dominates in gold or Bitcoin markets. The euro’s advance through clustered sell-side zones shows that leveraged shorts were liquidated, opening a path toward higher resistance. The next liquidity pocket is clustered in the 1.1780–1.1835 region, where prior rallies stalled in late July. Beyond that, 1.1880 becomes the target, with 1.1900 acting as a psychological barrier.

Dollar Weakness Reinforces Euro’s Case

The U.S. dollar’s retreat adds fuel to the euro’s rebound. The Dollar Index has slipped back toward 97.50 after Powell’s dovish tone convinced markets of a 90 percent probability for a September rate cut. U.S. yields followed, with the 2-year Treasury falling to 3.698 percent and the 10-year sliding to 4.256 percent, compressing spreads and flattening the curve. Historically, EUR/USD rallies when real yields in the U.S. compress, and that correlation is once again on display. Traders are now sensitive to inflation surprises. A soft PCE release could drive EUR/USD decisively through 1.1835, while a hotter print would embolden dollar bulls to defend resistance.

Technical Outlook: Bulls Target Higher Zones

The technical roadmap for EUR/USD is now clearer. Support has risen to 1.1670–1.1640, with buyers expected to defend pullbacks aggressively. The key upside levels remain 1.1780, 1.1835, and the breakout projection at 1.1880. Beyond that, 1.1900 is the upper marker where option structures and prior liquidity reside. If bears retake momentum and force a daily close under 1.1600, downside targets of 1.1574 and 1.1400 reopen, but that would require a macro shock or dollar resurgence. As of now, the balance of evidence favors continuation higher, with momentum intact and macro drivers leaning toward euro strength.

Verdict on EUR/USD: Buy with Targets Toward 1.1835–1.1880

The structural breakout above 1.1730, confirmed momentum indicators, and dovish Fed backdrop all support a bullish stance. Eurozone CPI data could provide further fuel, while U.S. PCE and jobless claims hold the key to extending gains. With 1.1670 now acting as firm support and 1.1730 converted into a new base, EUR/USD offers a favorable risk-reward profile on dips. The near-term bias is bullish, with upside targets of 1.1835 and 1.1880. The medium-term call remains Buy, contingent on holding above 1.1640, with potential for a retest of 1.1900 in the weeks ahead if macro data align with current momentum.

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