Today, Thursday, EUR/USD is targeting a break above the round-number level of 1.1700 and has almost reached it. The U.S. dollar is showing weakness following a sharp decline in U.S. Treasury yields to three-month lows the previous day, which has become a key factor limiting the pair's decline.
The decline in yields came amid intervention by the U.S. Treasury to support the bond market. The department announced plans to double purchases of long-term government bonds starting in September in order to contain rising borrowing costs.
Nevertheless, the minutes of the July 28–29 FOMC meeting showed that Federal Reserve officials emphasized the importance of raising interest rates in the near future if further progress in combating inflation cannot be achieved. This is becoming particularly relevant amid rising inflation risks caused by higher oil prices and is reinforcing market expectations that the U.S. central bank may raise rates at least once in 2026. In addition, geopolitical factors continue to support the dollar as a safe-haven asset.
In the latest news, President Donald Trump announced the launch of the "most devastating economic operation" against Iran and threatened severe financial sanctions against any country that helps Tehran circumvent sanctions or conducts business with the Islamist state. In addition, the United States and Iran remain in conflict over the Strait of Hormuz, which continues to put additional pressure on oil prices and support the dollar.
Nevertheless, the decline in EUR/USD is limited by expectations that the European Central Bank (ECB) will continue its monetary policy tightening cycle at its upcoming September meeting. This provides support for further appreciation of the single currency and reinforces the positive outlook for EUR/USD.
Today, traders may look for some momentum in the pair from signals provided by the upcoming U.S. economic data during the North American session.
From a technical perspective, a break above the key 200-day simple moving average (SMA) is considered an important trigger for EUR/USD bulls. This would also open the way for further growth toward 1.1733. On the downside, the nearest support is at the 200-day moving average around 1.1630, while deeper support levels are located at the 100-day SMA and the 200-day EMA.
The table below shows the percentage change in the euro against the major currency pairs this month. The euro has shown the greatest strength against the U.S. dollar.
