EURUSD Technical and Fundamentals AnalysisEUR/USDOANDA:EURUSDHichamAMMFundamental bias For the coming months, the fundamental bias is mildly bullish EURUSD (favoring EUR over USD), with medium confidence. Key reasons: The Euro area is closer to “normal” inflation than the US, allowing the ECB to remain neutral while the Fed is pressured to ease more over time. Market expectations increasingly price a narrowing of the Fed–ECB rate differential and continued soft‑USD environment, with bank forecasts lifting EURUSD toward 1.18–1.20 by year‑end. PPP and valuation work suggest EUR remains 3–7% undervalued, giving a structural argument for gradual EURUSD upside if there is no severe Eurozone shock. Risk sentiment is not in full risk‑off mode; in soft‑USD + stable‑Europe regimes, macro funds tend to buy EURUSD on dips rather than sell rallies. For a trader: bullish EURUSD means you prefer long EUR / short USD exposure, but you respect that short‑term moves are still highly dependent on upcoming US data and ECB/Fed messaging. Bias risks and invalidation This bullish bias could be invalidated or reduced if: US inflation re‑accelerates toward or above 4% while growth stays strong, forcing the Fed back into a more hawkish stance and supporting USD yields again. Euro area data disappoints (revised GDP lower, PMIs soft, services inflation sticky), reviving recession worries or pushing the ECB toward more aggressive easing than currently expected. Global risk‑off shocks (geopolitics, energy spike, trade tensions) hit Europe harder than the US, boosting demand for USD as the primary safe haven. Market positioning becomes extremely long EURUSD, making the pair vulnerable to sharp downside squeezes on any strong US data prints. If those scenarios start to dominate, the bias would shift toward neutral or even mildly bearish EURUSD, especially in the 3–6‑month window. What to watch next From here, the key catalysts to monitor are: US CPI and PPI (e.g., the August 12 CPI release), which currently carry the highest short‑term directional risk for EURUSD; dovish surprises favor EUR, hawkish ones favor USD. Upcoming ECB meetings and speeches for any sign that they are uncomfortable with a too‑strong euro or with lingering services inflation. FOMC meetings and Fed communication around the pace of cuts in late 2026, relative to market pricing from tools like FedWatch. Euro area industrial production and current‑account data, to confirm whether the Eurozone story remains “weak but stable” or slips back toward stagnation.