Euro Edges Above 1.1550 as Traders Await German Inflation Rate
- EUR/USD moved higher to around 1.1590 in early Asian trading on Monday, August 31, 2026.
- The euro gained slightly despite hawkish comments from Fed Chair Kevin Warsh at Jackson Hole.
- Traders are now focused on Germany's preliminary August HICP inflation, expected to rise to 3.2% year-on-year from 2.9% in July.
- Technical indicators show a fairly balanced market with a slight bullish bias.
What are the Key price Drivers?
EUR/USD is being influenced by a mix of German inflation expectations, the Fed's hawkish tone, and upcoming US economic data. While stronger German inflation could support the euro, a firm US dollar may limit further gains.
Germany's Flash Inflation Reading in Focus
Germany's preliminary August HICP is the main event for EUR/USD today. HICP (Harmonized Index of Consumer Prices) is an EU-wide measure used to compare inflation across European countries.
The reading is expected to rise to 3.2% year-on-year from 2.9% in July. Core annual HICP is expected to remain at 2.5%
If inflation comes in higher than expected, it could give the euro some support. A stronger inflation reading may also increase expectations that the European Central Bank will keep interest rates higher for longer.
Hawkish Warsh Caps, But Does Not Sink, The Pair
Fed Chair Kevin Warsh took a firm stance on inflation during his Jackson Hole speech. His comments boosted expectations for a September rate hike and helped support the US dollar late last week. Warsh said on Friday,
“We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.”
However, EUR/USD still moved slightly higher at the start of Monday's session. This suggests that some of the hawkish Fed message may already be priced into the dollar, while traders wait for fresh German inflation data
US Data on the Horizon
US economic data will also remain important for EUR/USD this week. Traders will be watching upcoming inflation and labour-market figures for clues about the Federal Reserve's next move.
Stronger-than-expected US data could support the dollar and put pressure on EUR/USD. On the other hand, weaker US figures could weigh on the dollar and give the euro more room to rise.
Technical Indicators & Market Trend
The daily chart points to a mildly bullish near-term trend. FXStreet noted that the RSI is around 52.8, just above the neutral 50 level. This shows that momentum has cooled, but buyers still have a slight advantage.
Resistance: 1.1595, then 1.1710.
Support: 1.1570
What Should Traders Do Now?
- EURUSD Forecast Today: Keep an eye on further comments from Federal Reserve officials about inflation and interest rates. Any change in the Fed's tone could have a direct impact on the US dollar and EUR/USD.
- Watch German Inflation: Pay close attention to Germany's preliminary August HICP reading. A higher-than-expected figure could support the euro, while a weaker reading could put pressure on EUR/USD.
- Track US Economic Data: Traders should also watch the upcoming US inflation and labour-market reports. Strong US data could boost the dollar, while weaker figures may support EUR/USD.
- Warning: high-impact event ahead: The US Non-Farm Payrolls (NFP) report for August is scheduled for Friday, September 4, 2026. The forecast is for 180,000 new jobs, following a previous reading of 165,000 in July. The report could trigger strong moves in the US dollar and EUR/USD, especially if the actual number differs significantly from expectations.
About the author:
Sarah ThompsonLead Forex Strategist & Financial Writer
Sarah Thompson is a professional Forex trader with over 7 years of experience in the financial markets. She specializes in Forex trading strategies, technical analysis, Gold and Indices market trends, risk management, and performance evaluation. Since joining SureShotFX in 2021, Sarah has authored numerous in-depth articles, reports, and insights for traders of all experience levels.
