Fundamental Market Analysis for August 20, 2026 EURUSDEuro/US DollarSAXO:EURUSDFresh-Forexcast2004The euro remains near its highest levels since late May, supported primarily by US dollar weakness. The US Treasury’s decision to increase buybacks of longer-dated securities has eased pressure on this segment of the market and pushed long-term yields lower. For EURUSD, this reduces the US dollar’s relative advantage, although part of the move has already been realized following yesterday’s advance. The euro-area backdrop is also not preventing further euro strength. The market continues to price in the possibility of another ECB rate increase in the autumn amid persistent inflationary pressure and resilience in the regional economy. At the same time, expectations remain balanced: the Federal Reserve minutes showed that many participants would consider further tightening if US inflation does not continue to decline. For the current session, the key question is whether the dollar can recover after its sharp weakening. For now, lower long-term US Treasury yields and continued demand for the European currency keep EURUSD supported. New US data could alter the market’s assessment, so after the advance already recorded, the base case points to a moderate continuation higher rather than an acceleration. Trading idea: BUY 1.16750, SL 1.16500, TP 1.17250