EUR/USD is stalling near 1.1480 resistance after softer US inflation began unwinding the dollar's recent gains. Analysts see the pair caught in choppy, range-bound trading while geopolitical risk and Fed uncertainty pull in opposite directions.
EUR/USD is struggling to clear the 1.1480 resistance level even as a larger-than-expected drop in US inflation pulls the dollar off its highs, according to FOREX.com analyst Razan Hilal. The pair has recovered toward that ceiling but cannot break above it.
The move follows a shift in the US Dollar Index, which began unwinding part of its recent bullish momentum after the inflation data. US CPI eased from 4.2% to 3.5%, while PPI fell to its lowest level since 2025 at -0.3%. The DXY is now testing the 100.30 support level, which aligns with the golden Fibonacci retracement of the June 15-June 25 advance.
Where the levels sit
For EUR/USD, 1.1480 marks the 27.2% Fibonacci retracement of the April-June decline. A breakout above that level would expose upside targets at 1.1530, 1.1590 and 1.1650, according to Hilal. On the downside, a break below the 1.1300-1.1280 support zone would open the way toward 1.1180 and 1.1070.
DailyForex analyst Christopher Lewis reads the price action similarly, describing a market bouncing along the bottom of a range that runs from roughly 1.14 to 1.1850 over the past 14 months. He notes that a clean break below 1.1350 could bring sellers back into the market.
A choppy outlook
Rabobank expects choppy range trading around the 1.14 level on a one-to-three-month view. The bank argues the dollar's failure to respond to renewed Fed rate-hike speculation supports the view that the market is already long dollars. Yet it also sees limited scope for a euro rebound, pointing to faded optimism over Germany's fiscal expansion and weaker Eurozone growth.
Rabobank does not share the market's hawkish view of the Fed, but it still expects the uneven, range-bound trading to persist into the autumn.
Sources: FOREX.com, DailyForex, Exchange Rates UK
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