Morning briefing: EUR/USD is expected to regain momentum above 1.1700

Market impact: Mildly bullish for EUR/USD, but conditional rather than a fundamental regime change.

The key market message is that 1.1700 is being treated as the pivot for renewed upside momentum. A sustained move above that threshold would reinforce the view that the recent EUR/USD pullback is corrective, potentially improving momentum toward the 1.1800 area. The associated bearish Dollar Index outlook—below 99.40, with scope toward 98.50—would provide the required cross-market confirmation through broad-based USD weakness.

The main transmission mechanism is relative US–euro-area rate expectations. The article notes that US Treasury and German yields remain elevated but stable, while highlighting the upcoming US PCE release and Jackson Hole-related policy risk. If US inflation data softens or Federal Reserve communication becomes less hawkish, Treasury yields and the dollar could fall, making a break above 1.1700 more sustainable. Conversely, firmer inflation or hawkish Fed messaging could lift US yields and undermine the bullish EUR/USD interpretation.

For traders, the setup is therefore tactically positive above 1.1700, with the signal weakened if the pair cannot hold that level after a breakout. The immediate risk is a false upside break, particularly because the forecast is technical and forward-looking rather than based on a new policy announcement or material change in economic fundamentals.

Time horizon:

The potential effect is primarily short-term over the next several sessions. A move toward 1.1800 would likely require confirmation from a weaker Dollar Index, softer US data, and/or a decline in US rate expectations. The next major catalysts are the August 26, 2026 US PCE release, Federal Reserve communication, Treasury-yield direction, and whether EUR/USD can maintain acceptance above 1.1700.