Euro holds above 1.1500 as US inflation curbs Fed bets

• EUR/USD holds above 1.1500 as softer PPI curbs Fed bets.
• Spanish inflation accelerates as energy costs pressure ECB expectations.
• EU GDP and US Retail Sales may break sideways trade.

The Euro holds firm above 1.1500 as inflation data in the US curbed Fed rate hike bets, as traders shifted from expecting a rate hike to a hold in the September 16 meeting, while investors await the release of economic growth figures in the European Union (EU).

EUR/USD steadies as softer US inflation contrasts with hotter Spanish prices

US producer-side inflation confirmed what the CPI revealed a day earlier: the disinflation process is evolving. The Producer Price Index (PPI) cooled in headlines and core figures, each at 4.7% and 4.2% respectively, when compared to June’s print.

This pushed investors to reduce bets on the Fed easing policy.in September. For December, the odds continued to edge lower, and now there’s a 67% chance for a rate hike by the end of the year, down from around 70% a day before, according to Prime Terminal.

Other data revealed that jobless claims edged up from 200K to 209K above estimates, though it remained slightly close to the 4-week average of 199K.

Meanwhile, geopolitical headlines remained limited, as Iran reaffirmed that the Strait of Hormuz remains closed and that it controls the Strait, echoing claims by US President Donald Trump.

Across the pond, inflation in Spain hit its highest level since May 2025, rising to 3.9%, driven by higher energy prices. 

Money markets are pricing in a near 87% probability that the European Central Bank (ECB) will increase rates by a quarter of a percentage point at its September meeting. Hence, EUR/USD’s price action remains sideways trading, with investors awaiting fresh catalysts from the Middle East.

On Friday, the economic docket in the Euro area will feature the release of Gross Domestic Product (GDP) figures, with the economy expected to grow 0.4% QoQ and 1% YoY. In the US, the schedule will feature July Retail Sales. Foreseen at 0.1% on a monthly basis, with the Control Group used to calculate GDP expected to hit June’s 0.5% number.

EUR/USD Price Forecast: Technical Outlook

In the daily chart, EUR/USD trades at 1.1529, maintaining a mildly bullish near-term bias as spot holds above the cluster of underlying levels. The latest simple moving average triple at 1.1465 now acts as a supportive floor beneath price, while the prior downward resistance trend line, broken at 1.1477, reinforces the reclaimed structure just below. Momentum is constructive, with the 14-period Relative Strength Index around 57, hinting at steady buying interest without reaching overbought conditions.

On the downside, immediate support is seen at the recent price base near 1.1529, followed by the former trend-line barrier turned support at 1.1477 and the simple moving average triple at 1.1465. On the topside, the next significant hurdle is the horizontal resistance level at 1.1849, and a sustained break above this barrier would open the way for a broader bullish extension in the days ahead.

(The technical analysis of this story was written with the help of an AI tool. Know more.)