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• The EUR/USD forecast points south as market participants worry about political stability in France.

• The French Prime Minister has called for a confidence vote in early September.

• The dollar rebounded on Wednesday as concerns about the Fed’s independence eased.

The EUR/USD forecast points south as market participants worry about political stability in France. Meanwhile, the dollar recovered from a recent collapse as worries about the independence of the Fed eased.

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The French Prime Minister has called for a confidence vote in early September that could lead to another collapse in the government. The news led to a collapse in government bonds as traders worried that it would mean instability and no budget by the end of the year. As a result, the euro has faced downward pressure.

“What is key is whether or not we will be able to have a budget by the end of the year,” said AXA chief economist Gilles Moec.

On the other hand, the dollar rebounded on Wednesday as concerns about the Fed’s independence eased. On Monday, Trump ordered the firing of Fed Governor Lisa Cook, which led to a collapse in the greenback. The move escalated tensions between Trump and the Fed. At the same time, traders grew concerned about the future of the central bank. Such a move could mean a more political Fed in the future with no independence.

EUR/USD key events today

Traders are not anticipating any high-impact economic releases from the US or the Eurozone. Therefore, market focus will remain on France’s politics.

EUR/USD technical forecast: Bears aim for the 1.1550 support level

On the technical side, the EUR/USD price trades below the 30-SMA, with the RSI under 50, suggesting a bearish bias. The decline comes after bulls failed to keep the price above the 1.1700 key resistance level. 

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EUR/USD has maintained a sideways move after the trend reversed near the 1.1400 support level. Bulls took over and started making higher highs and lows. However, they were unable to continue the rally past the 1.1700 resistance. Since then, the price has chopped through the 30-SMA with no clear direction. It made another failed attempt when the bulls made a strong green candle.

Currently, bears are eyeing the 1.1550 support level. A break below will allow the price to retest the 1.1400 support and start a new downtrend.

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Created on August 27, 2025

• The British pound rallied slightly during the session on Tuesday against the US dollar, as market participants are still trying to sort out what it is the Federal Reserve is doing.
• It’s worth noting that on Friday, after the speech by Jerome Powell at Jackson Hole, the US dollar was pummeled by multiple currencies as traders started to price in the idea of perhaps the Federal Reserve cutting rates.
• However, the Monday session saw a huge drop, although it didn’t wipe out the overall gains.

Now we have seen the market turned back around, but it’s also worth noting that the bullish candle was exactly that big. This tells me that we are more likely than not to try to settle into a short-term range.

Neutral Stance of British Pound?

While the British pound has been one of the better performers against the US dollar over the last couple of years, even on the way down, the reality is that the market has now slowed down and it looks as if the British pound might be going a little bit more neutral. If that’s going to be the case, I would be surprised at all to see the 1.36 level continue to hold as resistance, but it’s also possible that the 1.34 level continues to hold as support, but it’s also possible that the 1.34 level gives way. If it does, then the stance on the British pound changes rapidly, and it becomes much more bearish. All things being equal, this is a market that will continue to move right along with other dollar related currency pairs, but the British pound of course has been stronger than many of his contemporaries.

All things being equal, we will be paying close attention to what the Federal Reserve has to say, and therefore it makes a certain amount of sense that the overall attitude of the Federal Reserve will give us a “heads up as to where the US dollar itself goes.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

• EUR/USD holds inside 1.1583–1.1742 H4 Fair Value Gap as Jackson Hole dovish tone and Fed independence concerns weigh on USD.
• CME FedWatch shows 87.3% odds of a September cut, with Friday’s Core PCE inflation release as the key volatility trigger.
• Technical outlook: breakout above 1.1665–1.1742 opens 1.1780–1.1820, while pivot rejection risks 1.1550–1.1500.

Jackson Hole aftermath and Fed political shock

The Jackson Hole symposium set the stage for a renewed dovish shift in global markets. Fed Chair Jerome Powell’s remarks – emphasizing labor market softness and openness to easing – were read as a green light for September rate cuts. This was further amplified by political turbulence: the U.S. President’s move to block Fed Governor Lisa Cook rattled investor confidence in the Fed’s independence, a rare development that undermined the dollar’s stability.

Together, these factors have kept EUR/USD from breaking lower despite eurozone weakness, as markets lean heavily toward a dollar-softening policy shift.

Fundamental drivers: CME FedWatch and policy odds

The latest CME FedWatch tool underscores how markets are positioned:

• 87.3% chance of a 25bps cut at the September 17 FOMC meeting, which would bring the Fed funds rate into the 400–425bps band.
• Only 12.7% odds of no change, while 0% probability of a hike remains firmly priced out.

This overwhelming conviction reflects not only Powell’s Jackson Hole tone but also the broader sense that the Fed will prioritize cushioning growth over fighting residual inflation.

Upcoming high-impact data: PCE and spending (Aug 29)

Friday’s U.S. Core PCE Price Index (July) – the Fed’s preferred inflation gauge – will be crucial for EUR/USD direction.

• Expected 0.3% MoM (steady with prior) → A soft read could reinforce cut expectations, weakening USD and lifting EUR/USD above resistance.
• Upside surprise (0.4% or higher) → Would undermine September cut conviction, sparking a USD rebound and pressure toward 1.1550.

Alongside this, Personal Spending (0.5% prior, forecast 0.3%) and Personal Income (0.4% prior, forecast 0.3%) will offer insights into U.S. consumer resilience. Stronger data could delay Fed cuts, while weakness supports the dovish case.

In short, these releases are the last major inflation/consumption checkpoint before September FOMC, making them a likely volatility trigger for EUR/USD.

Technical outlook: EUR/USD holding inside H4 fair value gap

EUR/USD is currently trading around 1.1628, consolidating within a clearly defined H4 Fair Value Gap (1.1583 – 1.1742). This imbalance is dictating near-term flows, with buyers and sellers battling over whether price will sustain within or break out of the zone.

• The resistance at 1.1742 coincides with the post–Jackson Hole spike high, acting as a key resistance.
• The midpoint zone near 1.1665 is a short-term pivot, where rejection could fuel another leg lower.
• On the downside, 1.1602 – 1.1583 is immediate support, where liquidity could be swept before any bullish continuation attempt, or even a downside breakdown.

Bullish narrative: Sweep into expansion

EUR/USD could dip into the 1.1602–1.1583 liquidity pocket before snapping higher. A reclaim of the 1.1665 pivot would set up a drive toward the 1.1742 FVG top, with potential extension to 1.1780–1.1820. Softer U.S. Core PCE data would reinforce this upside case.

• Sweep of 1.1602–1.1583 then rebound
• Break above 1.1665 pivot
• Targets: 1.1742 → 1.1780–1.1820

Bearish narrative: Pivot rejection

If EUR/USD fails at the 1.1665 pivot, sellers may regain control. A break below 1.1602 would expose 1.1583, and losing that level risks a slide toward 1.1550–1.1500. Stronger U.S. inflation or spending data would favor this bearish path.

• Rejection at 1.1665 pivot
• Break below 1.1602 → 1.1583
• Downside: 1.1550 → 1.1500

Final thoughts

EUR/USD is sitting at a crossroads inside the H4 Fair Value Gap (1.1583–1.1742). With markets already pricing an 87% chance of a Fed cut, the dollar’s next move hinges on whether Friday’s Core PCE data validates or challenges that dovish outlook.

Until then, expect liquidity sweeps around 1.1600–1.1665 to shape intraday flows. A breakout above the FVG could unlock further upside, while a pivot rejection risks dragging the pair back toward 1.1550–1.1500. Traders should remain flexible, treating the upcoming U.S. data as the key volatility trigger that decides whether EUR/USD resolves higher or lower.

Platinum price surprised by a new obstacle at $1355.00, decelerating the chances of resuming the bullish attempts, which force it to form sideways fluctuation near $1345.00 level, by the above image we notice forming an important extra support at $1326.00 to reinforce the dominance of the bullish bias, increasing the chances for gathering the positive momentum in the current period.

Therefore, we will keep our bullish scenario depending on the stability of the extra support, to wait for breaching the extra barrier to open the way for achieving more of the gains by its rally towards $1383.00 reaching $1408.00.

The expected trading range for today is between $1335.00 and $1383.00

Trend forecast: Bullish

The EURJPY pair remains affected by the dominance of the sideways bias until this momentum, due to the continuation of the contradiction between stochastic negativity by its reach below 50 level and the stability within the main bullish levels, besides the stability of the moving average 55 near the support of the channel at 168.85.

Reminding you that the continuation of forming extra support at 170.45 level supports our bullish expectation by confirming its stability within the bullish track, therefore, we will keep waiting for gathering the positive momentum, to ease the mission of pressing on the barrier at 173.40, then begin targeting the main stations near 174.10 and 175.20.

The expected trading range for today is between 171.25 and 173.40

Trend forecast: Bullish

GBP/USD Forecast: Pound Sterling loses bullish momentum but finds support

GBP/USD lose more than 0.5% on Monday and erased a large portion of the gains it recorded on Friday. After finding support near 1.3430, the pair staged a rebound and was last seen trading above 1.3450.

Safe-haven flows dominated the action in financial markets late Monday and early Tuesday after United States (US) President Donald Trump renewed his threats of imposing tariffs on countries that discriminate against US technology firms. Additionally, Trump said that they will have to charge China “200% tariff or something” if they don’t give them more magnets, referencing to rare earth metals. Read more…

Pound Sterling gains slightly against US Dollar as Trump fires Fed’s Cook

The Pound Sterling (GBP) ticks up to near 1.3470 against the US Dollar (USD) during the European trading session on Tuesday. The GBP/USD pair edges higher as the US Dollar falls slightly after the ousting of Federal Reserve (Fed) Governor Lisa Cook by United States (US) President Donald Trump, which has increased concerns over the central bank’s independence.

On early Tuesday, US President Trump shared a letter on Truth.Social in which he announced the removal of Fed Governor Cook, citing that she made false statements on one or more mortgage agreements. Read more…

In August, the RBA cut the cash rate by 25 basis points, to 3.6%. RBA Governor Michele Bullock hinted at further policy easing during the press conference. She stating that the RBA’s 2025 forecasts are assuming a couple more cuts. Notably, the RBA didn’t dismiss the possibility of back-to-back cuts, indicating that board members will assess the data at each meeting.

When do economists expect the RBA to cut rates again?

AMP Head of Investment Strategy and Chief Economist Shane Oliver remarked on the RBA’s Meeting Minutes, stating:

“RBA minutes reiterated dovish guidance, noting the cash rate is ‘still somewhat restrictive’ & ‘some further reduction in the cash rate over the coming year’ is likely required, with reference to the pace being gradual and data determined. We expect cuts in Nov, Feb & May to 2.85%.”

Today’s inflation numbers would have to be significantly lower than in June to pressure the RBA into a September cut.

AUD/USD: Key Scenarios to Watch

• Bearish AUD/USD Scenario: Softer inflation or dovish RBA cues. These factors could drag AUD/USD below the 50-day EMA and bring the 200-day EMA and $0.6450 support level into play.
• Bullish AUD/USD Scenario: Hotter-than-expected inflation or hawkish RBA chatter. These factors could send AUD/USD toward the $0.6550 resistance level, paving the way toward the $0.66 level.

Explore our full AUD/USD analysis, including key trends and trade data, here.

AUD/USD Daily Outlook: Will Fed Speakers Narrow Rate Differentials?

While economists expect a November RBA rate cut, Fed Chair Powell’s hint of a near-term Fed rate cut sent AUD/USD to $0.65.

FOMC members’ support for a September rate cut and further policy easing in Q4 would narrow the US-Aussie rate differential in favor of the Aussie dollar. A narrowing rate differential may drive AUD/USD toward the $0.6550 level. A break above $0.6550 brings $0.66 into sight.

However, rising concerns about inflation over a cooling labor market could signal a less dovish Fed policy stance. Fewer rate cuts may widen the rate differential in favor of the US dollar. A wider differential could push AUD/USD below the 50-day EMA, exposing the 200-day EMA. If breached, $0.6400 would be the next support level.