The EUR/USD market is currently range-bound.
Key drivers include the interest rate differential, as the European Central Bank (ECB) holds rates steady while the Federal Reserve is expected to implement further rate cuts in 2026. Additionally, the recent drop in U.S. inflation strengthens the case for easing, pressuring the USD. Economic growth expectations for the Eurozone are supported by various fiscal measures, creating a more favorable environment for the euro.
Over the next 1–3 months, the EUR/USD is expected to trade within a stable range, reflecting its recent fluctuations between 1.1480 and 1.1790.
An upside risk for the euro could stem from improvements in consumer confidence in Germany or a stronger-than-expected economic outlook. Conversely, a downside risk may arise from increased geopolitical tensions or market volatility impacting investor sentiment towards both currencies.