The euro trades largely neutral as this week’s data offer few clear signals on policy effectiveness, while the dollar has resumed climbing. Yesterday’s eurozone inflation confirmed stabilization slightly above the ECB’s 2.0% target band: August CPI rose 0.2% m/m, lifting y/y to 2.1% from 2.0%; core CPI (ex-food and energy) increased 0.3% m/m and 2.3% y/y, matching the prior period. This backdrop allows the ECB to continue its restrictive stance, keeping the policy rate at 2.15%.

By contrast, the dollar’s tone is uneven: USDX ~98.40, supported by an appeals court ruling that deemed most import tariffs introduced by President Donald Trump unlawful. The ruling preserves current tariff levels until October 14, allowing the White House time to appeal to the Supreme Court. On the data front, the S&P Global manufacturing PMI for August rose to 53.0 from 49.8 (vs 53.3 expected), while the ISM manufacturing index edged up to 48.7 from 48.0 (vs 49.0 expected).

Support and Resistance

  • Support: 1.1530, 1.1270

  • Resistance: 1.1740, 1.1990

On the daily chart, the pair is correcting away from a strong support line of the ascending channel (1.2150–1.1740). Indicators remain uncertain: the Alligator EMAs are compressed near the signal line, and AO histogram continues to form corrective bars in buy territory.

Trading Scenarios Forecast

Primary (SELL STOP)

  • Entry: 1.1525

  • Take Profit: 1.1270

  • Stop Loss: 1.1600

  • Horizon: 7+ days

Alternative (BUY STOP)

  • Entry: 1.1745

  • Take Profit: 1.1990

  • Stop Loss: 1.1680

Key Levels: 1.1270, 1.1530, 1.1740, 1.1990