Last Updated on 28/08/2026
- EUR/USD holds modest gains around 1.1655 during Friday’s early Asian trading session.
- Markets remain focused on Fed Chair Warsh’s speech at the Jackson Hole Symposium in Wyoming on Friday.
- The ECB is widely expected to hike its key interest rates in September.
EUR/USD edges higher to around 1.1655 during Friday’s early Asian trading session. The pair could face increased volatility later in the day as Federal Reserve Chair Kevin Warsh prepares to deliver his closely watched keynote speech at the Jackson Hole Economic Policy Symposium.
The Euro continues to receive support from the European Central Bank’s hawkish policy outlook and resilient Eurozone economic data. ECB Executive Board member Isabel Schnabel said Wednesday that interest rates may need to rise further, citing inflationary risks stemming from the prolonged Middle East conflict and stronger-than-expected economic activity across the Eurozone.
Recent data also highlighted the resilience of the Eurozone economy, with business activity expanding at its fastest pace of the year. Markets are currently pricing in roughly a 96% probability that the ECB will lift its deposit rate to 2.50% at its September meeting.
Meanwhile, traders are closely awaiting Fed Chair Kevin Warsh’s speech in Jackson Hole, Wyoming, on Friday. His remarks could provide fresh insight into the outlook for the US economy and future monetary policy.
Bank of America’s US rates strategist Mark Cabana expects Warsh to indicate that further rate hikes remain possible if inflation fails to ease further. However, a speech focused mainly on longer-term structural issues such as productivity and demographics could be viewed by markets as relatively dovish.
ECB outlook continues to support the Euro
Scotiabank strategists point out that the Euro has recently lost some momentum as yield differentials have shifted, with German-US yield spreads providing slightly less fundamental support for the currency. Nevertheless, they believe the broader policy divergence between the ECB and Fed remains favorable for the Euro.
With markets increasingly anticipating ECB tightening in September while scaling back expectations for further Fed rate hikes, the relative monetary-policy outlook continues to offer a constructive medium-term backdrop for EUR/USD.
Technical Analysis: EUR/USD maintains a bullish bias above key moving averages
On the daily chart, EUR/USD retains a positive near-term outlook, with the pair trading above both the 100-day simple moving average (SMA) and the middle line of the 20-day Bollinger Bands. The pair is approaching resistance around the upper Bollinger Band, while the 14-day Relative Strength Index (RSI) near 65 indicates solid upward momentum without yet reaching overbought territory.
On the downside, initial support is located around 1.1585–1.1575, where the 100-day SMA and Bollinger middle band converge. A deeper correction could bring the pair toward stronger support near 1.1465, around the lower Bollinger Band.
On the upside, a decisive move above the upper Bollinger Band near 1.1710 could pave the way for additional gains. Conversely, another rejection at this level may trigger a pullback toward the 1.1585–1.1575 support zone.
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