EUR/USD Price Forecast: Consolidative phase continues ahead of Jackson Hole headlines

EUR/USD Current price: 1.1651

• Upbeat August Eurozone Purchasing Managers’ Indexes failed to boost the Euro.
• The Eurozone and the United States made a joint statement on a trade deal.
• EUR/USD extends its consolidative phase, buyers seem to be losing interest.

Financial markets keep struggling for direction, with the EUR/USD pair still confined to a tight range and currently trading at around 1.1650. Multiple headlines are pushing the pair back and forth, although none have been enough to trigger a clear directional movement.

Late on Wednesday, the Federal Open Market Committee (FOMC) meeting minutes gave no fresh clues and hence passed unnoticed. The document showed that the two dissenters' votes had no additional support, as no other official called for lower interest rates. Other than that, participants noted the impact of tariffs had become more apparent in goods prices, adding it would take time to have more clarity on the magnitude and persistence of higher tariffs’ effects on inflation.

The US Dollar (USD) gathered modest momentum during Asian trading hours, resulting in EUR/USD falling to an intraday low of 1.1625, bouncing back after better-than-anticipated Eurozone data. The Hamburg Commercial Bank (HCOB) released the flash estimates of the August Purchasing Managers’ Indexes (PMI) for the EU. The Composite PMI surged to 51.1 from 50.9 posted in July, a 15-month high. Manufacturing output surged to an over three-year high of 50.5 from the previous 49.8, while the Services PMI eased to 50.7 from the 51.0 posted in the previous month. “The modest increase in business activity was the sharpest since May 2024. Output has now risen in each of the past eight months,” the official report stated.

Meanwhile, the EU and the United States (US) made a joint statement outlining a trade deal. Brussels and Washington delivered additional details, with the US committing to “apply the higher of either the U.S. Most Favored Nation (MFN) tariff rate or a tariff rate of 15 percent, comprised of the MFN tariff and a reciprocal tariff, on originating goods of the European Union.” Adding it would cut auto levies on the EU to 15% after the latter eases US tariffs.

Despite encouraging headlines, the USD was able to attract buyers ahead of US data releases, sending EUR/USD back to the lower end of its intraday range. The US published Initial Jobless Claims for the week ended August 16, which rose by 235K, worse than the 225K expected or the previous 224K. Coming up next, S&P Global will release the August flash PMI estimates.

Meanwhile, the Jackson Hole Symposium is about to start. The three-day central bankers’ gathering may bring fresh headlines that can shake the board. Federal Reserve (Fed) Chairman Jerome Powell will take centre stage on Friday.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is little changed for a third consecutive day, with the risk tilted to the downside. The pair stands above a mildly bearish 20 Simple Moving Average (SMA) in the daily chart, while he 100 SMA keeps heading higher well below the shorter one. At the same time, the Momentum indicator turned sharply lower within positive levels, currently approaching its 100 line. Finally, the Relative Strength Index (RSI) indicator holds lifeless at around 50, reflecting the absence of a clear directional interest.

The near-term picture is neutral-to-bearish. In the 4-hour chart, the EUR/USD pair is trapped in a tight range, with a mildly bearish 20 SMA limiting advances, and a flat 100 SMA providing dynamic support at around 1.1610. Technical indicators in the meantime, consolidate below their midlines with modest downward strength, not enough to suggest lower lows ahead but confirming buyers remain sidelined.

Support levels: 1.1610 1.1570 1.1540

Resistance levels: 1.1700 1.1740 1.1785