EUR/USD Forex Signal: Sideways Momentum Builds Ahead of Key Data
By DailyForex.com
The EUR/USD currency pair has been moving within a relatively tight range recently, as market participants await upcoming high-impact economic releases later this week, notably data out of the US and Europe. The consolidation behavior seen in the past few sessions provides clues about potential breakout scenarios, depending on whether the economic data surprises to the upside or downside.
As of early trading on August 26, 2025, the EUR/USD pair remains supported above the 1.0875 level. However, bullish momentum has not been strong enough to push it decisively past the key resistance level at 1.0930. This sideways action indicates hesitation among traders, who are holding off on strong directional bets until additional clarity emerges from broader macroeconomic developments.
Key Technical Factors
The current technical landscape for EUR/USD continues to suggest a neutral to mildly bullish outlook in the short term. Several levels are in play that could shift the dynamic quickly if broken or respected. Below is a breakdown of the technical parameters impacting EUR/USD at this stage:
Support Levels
– 1.0875: This level has served as short-term support over the past few sessions. A decisive break below this level could open the way to lower support zones.
– 1.0850: Often a psychologically significant level, particularly during low liquidity periods.
– 1.0800: A round number and prior demand threshold that could invite fresh buyers if reached.
Resistance Levels
– 1.0930: The immediate resistance which has capped upside efforts on multiple occasions. Bulls need a confirmed close above this level to strengthen momentum.
– 1.0980: Next area of resistance in case 1.0930 is breached. It acted as support/resistance flip in previous weeks.
– 1.1035: Multi-week resistance tied to both Fibonacci retracement and prior swing high levels.
Despite brief moves toward both sides of the 1.0900 handle, the currency pair has failed to generate enough momentum to establish a trend. Volumes have also been lighter than usual, indicating a possible wait-and-see attitude among institutional traders and hedge funds who focus on macro fundamentals.
Economic Calendar: Scheduled Catalysts
One reason for the lack of price movement is the highly anticipated series of economic data releases due later this week. Market participants are positioning cautiously ahead of these events, as they could significantly influence the direction of both the dollar and the euro.
Upcoming Economic Releases to Watch:
– US Core PCE Inflation Data: As the Federal Reserve’s preferred inflation metric, this report stands to influence expectations over future interest rate policy in the US. A surprise uptick in core PCE could strengthen the US dollar, weakening EUR/USD.
– Eurozone Consumer Confidence and CPI Flash Estimate: These indicators will shape the Eurozone’s growth and inflation outlook. If inflation appears resilient, expectations for ECB policy normalization could boost the euro.
– US Initial Jobless Claims: Although a weekly release, persistent deviations from expectations tend to affect dollar sentiment.
– German Ifo Business Climate: A core sentiment index that provides crucial insight into the economic momentum within Europe’s largest economy.
Traders should closely monitor the data’s implications for interest rate trajectories. While the Federal Reserve and the European Central Bank (ECB) have adopted differing forward guidance in recent months, any shifts in inflation or employment data could force central bankers to reevaluate their stances.
Overall Market Sentiment
The current market sentiment surrounding EUR/USD is characterized by cautious optimism tempered by global economic uncertainty. While recent US data has shown some signs of strength, broad-based softening in key indicators like manufacturing, job creation, and consumer sentiment has raised questions about the sustainability of the US economic expansion.
On the other hand, the Eurozone has experienced nascent signs of recovery, especially in Germany and France. Both countries have posted stronger-than-anticipated industrial output and labor data in recent weeks, giving the ECB reasons to
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