EUR/USD price steadies near $1.162 as traders weigh politics and U.S. data risks

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EUR/USD holds range near 1.1620

Highlights

- EUR/USD trades in a tight 1.1590–1.1660 range after failing to extend Monday’s bounce.

- Fed independence concerns and new tariff threats support the dollar’s defensive tone.

- Traders await U.S. durable goods and consumer confidence data for the next catalyst.

The White House’s push to remove Federal Reserve Governor Lisa Cook rattled confidence in the Fed’s independence, while renewed tariff threats added another layer of uncertainty. European political tensions have also capped the single currency. Concerns around France’s parliamentary stability and regulatory debates within the European Union have left investors hesitant to commit to fresh long exposure, even during periods of dollar weakness. The net result has been a market lacking clear direction, consolidating in a narrow band as traders wait for new signals.

Technical picture

The four-hour chart captures the indecision. After climbing steadily through early August, EUR/USD failed to extend beyond 1.1740 and has since carved a descending series of lower highs. The rejection near 1.1660 on Monday reinforced that slope, keeping focus on the 1.1600 shelf as immediate support.Fibonacci retracement levels frame the battlefield. The pair is oscillating around the 0.618 retracement at 1.1636, with deeper support at 1.1590, the 0.500 marker. A close below 1.1590 would risk a drop to 1.1543 and then 1.1485. On the topside, resistance lies first at 1.1660, then near 1.1700 to 1.1720, where the descending trendline converges with the 0.786 retracement. Only a break above that belt would reestablish bullish momentum and open the door toward 1.1780.

EUR/USD price dynamics (Source: TradingView)

Momentum indicators highlight the EUR/USD pair’s fatigue. Price is pressing lower highs with wicks forming around 1.1660, suggesting overhead supply. At the same time, the repeated defense of 1.1590 keeps the base intact. Volatility has compressed inside the 1.1590–1.1660 corridor, a setup that typically resolves with a decisive breakout once a catalyst arrives.

Macro drivers and outlook

Macro drivers point to cautious dollar support. The confrontation over Fed independence has unsettled markets and reinforced demand for safe havens. At the same time, Powell’s recent dovish remarks at Jackson Hole keep alive expectations for a September rate cut, giving traders a reason to temper aggressive dollar longs. The upcoming durable goods orders and consumer confidence releases are now in focus, with Friday’s PCE inflation print the critical event for the week.

Euro-specific dynamics remain mixed. Political risks in France and debates over digital taxation policy add to uncertainty, but the broader European growth picture has not worsened. Cross-asset signals such as firm equities and stable credit spreads support risk appetite at the margin, preventing deeper euro declines.

The tactical roadmap is clear. Bulls need to defend 1.1590 and retake 1.1660 to shift the short-term bias higher, with 1.1700–1.1720 as the breakout test. Bears gain control only if the pair closes below 1.1590, which would invite follow-through toward 1.1540 and possibly 1.1485. Until either level breaks, range trading is likely to dominate, with traders keeping positions light around headline risk.

In earlier coverage, we noted that EUR/USD had rolled out of its rising August channel and that the 1.1590 shelf was the line to watch. That view remains valid. The pair continues to compress inside a narrowing corridor, with the next catalyst likely to come from U.S. economic data. Only a decisive move through 1.1590 or 1.1700 will confirm the next directional leg.

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