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EUR/USD hits highest level since May as dollar weakens

The euro is being supported by improving eurozone activity, including a stronger Germany industrial sector, while consumer inflation expectations eased to 2.9% from 3.0%.

Reported · Written up by our desk · Major Pairs

EUR/USD opened the week near 1.1700, its highest level since May, as the euro gained support from improving European economic data and a weaker US dollar. Action Forex links the dollar softness to the US Treasury decision to expand its bond buyback program.

In the eurozone, business activity continued to expand in August, with Germany’s industrial sector showing the most notable improvement, while consumer inflation expectations edged lower. The one-year outlook eased to 2.9% from 3.0%, though inflation remains above the ECB’s target, sustaining expectations for further policy tightening.

Attention this week is set to shift to incoming data from both Europe and the US. Germany will release the Ifo business climate index on Tuesday, France is set to provide preliminary inflation figures on Friday, and the main focus is Wednesday’s US releases including core PCE, the second estimate of Q2 GDP, durable goods orders, and personal income and spending.

The same trading view also points to upcoming market sensitivity to inflation and growth signals, with weak US data expected to reinforce dollar pressure and support EUR/USD. It also outlines technical levels on H4 and H1 charts, including a potential corrective move toward 1.1811 after an upside breakout, or a slide toward 1.1455 if price breaks down, with shorter-term downside pressure indicated by H1 stochastic signals.

Latest closeEUR/USD 1.157 ▲0.4%

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