EUR/USD Price Forecast: Holds steady below 1.1700 as overbought momentum tempers further gains

EUR/USD: Mildly bullish bias, but near-term upside is vulnerable to consolidation.

The key market implication is a divergence between supportive dollar fundamentals and stretched euro-dollar positioning. US Treasury intervention in the long-end bond market is pressuring the dollar by raising concerns about fiscal credibility and the future path of US rates. That creates a medium-term headwind for USD and supports EUR/USD.

However, the pair’s RSI near 73 and its position close to the upper Bollinger Band indicate that bullish momentum is extended. This increases the probability of profit-taking or range trading rather than a clean continuation higher. The technical setup remains constructive while price holds above the cited 100-day SMA near 1.1575, but a break below that area would weaken the immediate bullish structure; 1.1705 is the next cited upside barrier.

The larger near-term catalyst is Federal Reserve communication, particularly Kevin Warsh’s Jackson Hole speech on Friday, August 28, 2026. A more hawkish-than-expected message could lift Treasury yields, reduce expectations for easier US policy, and trigger a sharp USD rebound. Conversely, continued concern over US fiscal management or a dovish policy signal would reinforce dollar weakness and improve the odds of EUR/USD extending higher.

Geopolitical risk is a two-sided factor. Tougher US sanctions on Iran—especially if China is targeted—could initially generate safe-haven demand for the dollar, even if the broader fiscal narrative remains dollar-negative. This makes headline-driven volatility a larger risk than the current technical consolidation alone suggests.

Trading implication:

the signal is mixed but asymmetrically event-sensitive—the underlying bias favors EUR/USD while it remains above support, but overbought conditions make upside follow-through vulnerable. Traders should monitor Warsh’s tone, US Treasury yields, the Dollar Index, details of the Iran sanctions, and whether EUR/USD can sustain trade above 1.1705 rather than merely test it.