EUR/USD battles 1.1450 as dollar's post-FOMC revenge keeps bears in charge

The single currency is fighting for a floor. After tumbling through the 1.15 handle last week, EUR/USD is now probing the lower reaches of its recent range near 1.1450, a level that coincides with the lower Bollinger band on daily charts. The sell-off has been methodical rather than panicked: a slow bleed driven by a dollar that refuses to give back its post-FOMC surge.

That FOMC meeting, held earlier this month, reinforced the narrative of a resilient US economy that needs higher-for-longer rates. The greenback has feasted on the policy divergence ever since. Eurozone data, on the other hand, has been lukewarm at best. Germany’s manufacturing slump continues to act as a drag, leaving the European Central Bank with a far more cautious tightening path. That gap is what’s really driving price right now, not a sudden crisis of confidence in the euro as a currency.

The technical picture grows darker

Take a look at the 4-hour chart and the damage is plain. The pair has settled comfortably below the 100 and 200 simple moving averages, with the 100 SMA now sloping lower and acting as dynamic resistance near 1.1500. Every minor bounce this week has been capped well shy of that level. The low at 1.1471, printed earlier this week, sparked a modest recovery, but according to ActionForex, that rebound lacked conviction and barely made a dent in the bearish structure.

FXStreet points to the lower Bollinger band on daily timeframes being tested. That’s significant because a clean break below could open the door toward 1.1418, the spike low recorded the previous Friday according to Forex.com. That level now serves as the near-term bearish target. Should it give way, the next stop is a psychological zone around 1.1370, an area that hasn’t been touched since late 2025. Momentum oscillators haven’t yet flashed oversold on the daily chart, which means the path of least resistance remains lower until something changes the macro backdrop.

What could change the backdrop? A dovish repricing of the Fed is the obvious catalyst, but that requires a meaningful deterioration in US data. This week’s calendar is light, so traders may have to wait until next week’s PMI releases for a clearer steer. Until then, the dollar bid is self-reinforcing.

A contrarian long-term bet

Not everyone is bearish. UBS, in a note cited by ExchangeRates.org.uk, sees the euro recovering to 1.20 in 2027. That is a strikingly optimistic call given where we are now. The bank’s thesis hinges on a medium-term dollar peak: the idea that the Fed’s hiking cycle will eventually cool US growth enough to bring rate cuts back into the conversation, while the ECB will be forced to play catch-up as eurozone inflation proves stickier.

UBS is hardly alone in holding a structurally bullish euro view, but the timing is everything. The same note acknowledged that EUR/USD remains under pressure in the short term. And indeed, the pair has lost roughly two big figures from the 1.16 area seen earlier in June. For a retail trader, the key challenge is bridging the gap between that near-term weakness and the long-term forecast. Getting caught on the wrong side of a trend for even a few weeks can be punishing.

What TradeVisor’s AI is focusing on

Our models are trained to track exactly these kinds of conflicting signals. Right now, TradeVisor’s analysis weights several drivers: rate differentials measured through 2-year yield spreads, the CFTC’s latest positioning data showing speculators still heavily net-short euros, and the technical damage described above. There is no single clean signal when the fundamental and technical pictures diverge this sharply.

A high-priority input for the AI is the 1.1471, 1.1418 zone. A daily close below 1.1418 would likely trigger a fresh round of momentum-based selling that even UBS’s optimism can’t ignore. Conversely, a sudden break back above the 100 SMA would force a reassessment. In the absence of that, the model leans toward respecting the trend until the trend actually breaks.

What should a trader watch? First, any headline that suggests the Fed is getting nervous about the labour market. Second, the eurozone flash PMIs due shortly. A downside surprise there could accelerate the move toward 1.13. Third, and more subtly, watch the VIX. A spike in equity volatility could spark a short-squeeze in the euro if risk corridors shut down. The market is not yet positioned for that.

From here, the balance of probabilities still favours sellers, but the reward-to-risk of fresh shorts is deteriorating as we press against known support. Patience and position sizing matter more than conviction when a 1.20 forecast is lurking in the background.