EUR/USD Price Forecast: Declines to near 1.1650, overbought signals curb upside bias

EUR/USD: Mildly bearish near term, but broader structure remains constructive.

The pullback toward 1.1650–1.1665 appears to reflect USD recovery and profit-taking rather than a confirmed reversal. The pair remains above its 100-day SMA and 20-day Bollinger midpoint, while RSI near 67 signals strong momentum that is becoming stretched—not necessarily an immediate sell signal, but a condition that increases the risk of consolidation or a deeper retracement.

The key market catalyst is the upcoming US July Core PCE release. A hotter-than-expected reading could lift Treasury yields and revive expectations of a September Fed hike, supporting the dollar and placing further pressure on EUR/USD. Conversely, softer inflation would likely reduce those expectations and restore demand for the euro. Markets were pricing approximately a 38.4% probability of a 25-basis-point September hike, leaving considerable scope for repricing.

Technically, 1.1705 is the immediate upside test. A sustained break above it would indicate that the overbought condition is being absorbed and would expose the 1.1788–1.1824 area. Failure near that resistance would favor range trading or a corrective move. The more important downside threshold is 1.1580–1.1575; a decisive break there would damage the current bullish structure and expose support near 1.1460.

The short-term bias is therefore mixed-to-slightly bearish below 1.1705, primarily because of stretched momentum and event risk. The medium-term bullish case remains valid while the 1.1580–1.1575 zone holds. Traders should monitor Core PCE, US yields, Fed Chair Kevin Warsh’s August 28, 2026 Jackson Hole remarks, and whether USD strength broadens beyond a temporary pre-data rebound.