EUR/USD: traders await action

The foreign exchange market remains marked by great caution. The euro/dollar pair is moving in a narrow range, torn between geopolitical developments related to the conflict in Ukraine and the anticipation of the Jackson Hole symposium, which is scheduled to begin this week.

On the political front, Washington is seeking to reposition its role in the peace negotiations. Donald Trump assured Volodymyr Zelensky that the United States would support security guarantees for Ukraine, but in coordination with European partners rather than through direct military engagement. The possibility of a Zelensky-Putin meeting in the coming weeks fuels the idea of a possible easing of tensions, without providing any certainty for the time being. Energy markets are closely monitoring this issue: a de-escalation could shift the balance of global supply by making Russian oil more accessible again.

On the monetary front, attention is now focused on the Federal Reserve. Jerome Powell's speech, expected Friday in Jackson Hole, should be decisive in clarifying the trajectory of key interest rates. Investors are expecting at least two declines by the end of the year, but the latest US economic statistics - slowing employment and persistent pressure on producer prices - complicate the reading. This context maintains high implied volatility on the pair, even though trading volumes remain reduced due to the summer period.

On the technical front, the euro enjoys solid support: the European currency is rebounding off its rising moving averages, confirming a still positive underlying trend. The Bollinger Bands are gradually tightening, signaling an ongoing sideways consolidation phase. This behavior reflects the expectation of a major catalyst - likely the Fed's speech at Jackson Hole - to drive a new direction in the short term.

MEDIUM-TERM FORECAST
In light of the key chart factors we have mentioned, our view is positive in the medium term on the EUR/USD.

Our entry point is at $1.1677. The price target for our bullish scenario is $1.2000. To protect your invested capital, we recommend placing a protective stop loss at $1.1380.

The expected return on this Forex strategy is 323 pips and the risk of loss is 297 pips.