EUR/USD Forecast: Euro Holds 1.1664 Below the 1.1700 Ceiling

• EUR/USD trades at 1.1664, down 0.12% on the day, holding the ground it took last week but unable to clear 1.1700.
• A 9-3 split on the Federal Reserve, with three officials arguing for a rate rise rather than a cut, has left the dollar without a settled direction.
• The 1.1623 moving average is the level that decides whether the breakout consolidates or unwinds.

Fundamental Analysis: EUR/USD

The Federal Reserve left the funds rate at 3.50%-3.75% on 29 July, a fifth consecutive hold, but the vote broke 9-3 with three members preferring a quarter-point increase. That is the widest division on the committee in decades, and it matters more than the decision itself: the dollar is no longer trading against a predictable easing path but against genuine disagreement. US inflation slowed for a second month to 3.4% in July, with core at 2.5%, which gives the majority room to wait without giving the hawks a reason to stand down.

The euro is not the passive side of this pair. The European Central Bank raised its rate by a quarter point in June to 2.40% and held in July, and euro area inflation ran at 2.9% in July with core at 2.5%. Energy is the complication on both sides of the Atlantic, running at 10.3% annually in the bloc and keeping services inflation sticky at 3.3%. A central bank that has already tightened once this year and is watching energy feed through is not one the market can comfortably fade.

That leaves two hawkish-leaning central banks and very little to separate them. Futures price only around eight basis points of tightening for September, roughly a one-in-three chance of a move, so the rate differential is doing less work than usual. The Jackson Hole symposium runs from 27 August, and the new Fed chair's first address there on 28 August is the event traders are positioning around. Until it lands, this pair has more reason to range than to trend.

Technical Analysis: EUR/USD

The 4-hour chart shows a grind higher that began near 1.1380 at the start of August and spent most of the month working through a shallow 1.1500 to 1.1560 shelf. The impulsive leg arrived on 19 and 20 August, when price cleared that shelf and ran to 1.1700 in two sessions. Since then it has done nothing but consolidate, with the fast average at 1.1663 flattening beneath price and the slower averages stacked below at 1.1623, 1.1576 and 1.1535 in a clean bullish sequence.

Resistance is the 1.1700 high, and the sequence of upper wicks there suggests supply rather than a pause. Support sits first at 1.1623, where the second average now sits, then at 1.1576. A close beneath 1.1535 would break the stacked structure and invalidate the read that this is consolidation within an uptrend rather than a completed move.

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