EUR/USD Forecast: Euro to Dollar Levels and Outlook

Dollar to euro forecast: will the dollar rise or fall?

The dollar to euro rate is the inverse of EUR/USD. It shows how many euros one US dollar costs, and it equals 1 divided by the EUR/USD rate.

If EUR/USD rises, the dollar gets cheaper, and if EUR/USD falls, it gets more expensive. At the close of 1.1390 on 25 September 2026, one US dollar cost about 0.878 euros. Every price level on this page can be translated into the dollar view this way. The table shows the levels where the direction is decided.

A weekly close below 1.1325 would signal a break of support and further dollar strength. Then the sideways phase since June 2025 would be broken, and one dollar would cost more than 0.883 euros. Tailwind comes from the rate gap of 1.25 to 1.50 percentage points: the Fed decided on 16 September 2026 to raise its target range to 3.75 to 4.00 percent, effective 17 September, and the ECB deposit rate has been 2.50 percent since 16 September.

The dollar loses if EUR/USD breaks above the 2025 high at 1.1918. One dollar would then fall below 0.84 euros, and on the weekly chart targets in the 1.21 area would become active. On average, the banks expect slight dollar weakness: the mean of their six-month forecasts is 1.16, or about 0.862 euros per dollar.

Neither direction comes with a guarantee. As long as EUR/USD swings between the edges, the dollar to euro rate stays in a range of about 0.84 to 0.88 euros. For traders the reaction at the edges of the range therefore matters more than the direction.

The market in 2026: tariffs, the Fed and the ECB

The market context has shifted several times since the start of the year. The US tariffs announced in April 2025 (“Liberation Day”) first put the dollar under structural pressure and fueled the attempt to break toward the 2025 high. In January 2026 there was even a brief overshoot above that mark, before price was clearly rejected. With the change at the top of the Fed and the much more restrictive June dot plot, the picture turned: the dollar gained and pushed EUR/USD down to the June low at 1.1325.

Since then the situation has turned several times. Disappointing US labour market data in June and July fueled a strong recovery to a multi-week high of 1.1688 at the end of August. On 28 August, in his first Jackson Hole speech as Fed chair, Kevin Warsh called the 2% inflation target “a firm, fixed target” and said he would be hard pressed to describe broad financial conditions as restrictive. EUR/USD fell back from its high.

Both expected central bank decisions have now been made. The ECB raised its rates by 25 basis points on 10 September (deposit rate 2.50%), and the Fed followed on 16 September with a unanimous rise to 3.75% to 4.00%, its first rate rise since July 2023. According to the dot plot, the majority of Fed members expect at least one more rise by the end of the year.

Since then the pressure on EUR/USD has increased. Stronger US purchasing managers’ indices and hawkish comments from Fed officials drove the dollar higher. In the week to 25 September the pair fell to about 1.1359, despite better eurozone data: the ifo business climate rose to 89.9 points in September, and the eurozone PMI indicated the fastest business-activity growth since April 2023.

What banks expect for EUR/USD

Eleven major banks expect EUR/USD at 1.16 on average in six months. That is shown by the Bloomberg survey in the Deutsche Bank currency bulletin dated 23 September 2026. The range runs from 1.10 at the Royal Bank of Canada to 1.19 at Deutsche Bank and SEB.

Deutsche Bank itself sees the dollar weaker by March 2027. In the short term, Fed policy decides, the bank writes, but over the period to March the dollar could weaken toward EUR/USD 1.19. More cautious is the September Raiffeisen trend outlook, written before the September rate decisions: it sees a range of 1.14 to 1.16 over six months as plausible and, over twelve months, a sideways move with moderate upside to 1.18.

Bank forecasts are snapshots, not trading signals. They rest mainly on rate and growth assumptions and can change with new data or rate decisions. Whether the market follows them only shows at the chart levels above.

EUR/USD history: yearly averages since 2015

Between 2015 and 2025, the yearly average of EUR/USD ranged between about 1.05 and 1.18 US dollars per euro. The low was 1.0530 in 2022, the high 1.1827 in 2021.

The table shows the yearly means of the ECB reference rates. The third column is the inverse of each yearly mean, not a separately calculated yearly average of USD/EUR. For 2026 it is the average from 1 January to 25 September, from 188 trading days.

The weakest year was 2022, with an average of 1.0530. That year the Fed began raising rates in March, the ECB only in July. The 2026 average so far is above the September price, because the euro still traded above 1.17 in January and February.

How this forecast is made

I read EUR/USD across five time frames, from the yearly chart to the 4-hour chart. The yearly and monthly charts show the big structure, the weekly chart the medium-term trend, and the daily and 4-hour charts give the concrete levels. The shortest time frame comes first on this page, and the yearly chart comes last.

The five chart analyses use my own charts with FXCM price data. Other data providers differ by a few pips in currencies, so those sections use the value from the chart, and you can check it in the image. Bank forecasts and historical averages use the sources named in their sections, and scenario targets are analytical assessments. The charts were made with TradingView.

Fundamental factors are added to the chart picture. They include growth, inflation and above all the interest-rate policy of the central banks, which you can follow in our articles on the Fed rate decision and the ECB rate decision. Market expectations for the next Fed steps can be followed with the CME FedWatch Tool.

No chart analysis delivers certainty, only probabilities. Currency prices react to central bank meetings, political decisions and capital flows that cannot be read from the chart. That is why each scenario names the level where it tips. This page follows our editorial policy.

What influences the EUR/USD exchange rate?

The EUR/USD exchange rate is set by supply and demand. Both depend above all on the rate decisions of the ECB and the Fed, on inflation and on geopolitical developments.

The strongest influence comes from the key interest rates. Investors constantly compare currencies, bonds, equities and commodities by return and risk. That is why the monetary policy of the European Central Bank and the US Federal Reserve deserves the most attention.

The ECB is the central bank of the eurozone and sets the key rate for the 21 euro member states. The Fed is the central bank of the United States and steers US monetary policy through the federal funds rate.

Because copper and oil are traded in US dollars, the euro dollar rate also affects commodity prices. Our copper price forecast and the crude oil price forecast show the levels for both commodities.

What is the EUR/USD currency pair?

The EUR/USD pair shows how many US dollars are needed to buy one euro. A rate of 1.1390 means one euro costs 1.1390 US dollars.

EUR/USD is the most traded currency pair in the world. The euro is the base currency, the US dollar the quote currency. According to the latest survey of the Bank for International Settlements from April 2025, EUR/USD is traded at about 1.97 trillion US dollars per day, a good fifth of global foreign exchange turnover of 9.6 trillion dollars.

Every trade involves two currencies, so the currency shares add up to 200 percent. The US dollar has 89.2 percent, the euro 28.9 percent and the yen 16.8 percent. The yen side is covered in the USD/JPY forecast and the EUR/JPY forecast.

What are the major and minor currency pairs?

Majors are the most traded currency pairs and include the US dollar and another leading currency. They are EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD and NZD/USD, with high liquidity and low spreads. Minors, also called crosses, combine two main currencies without the dollar, for example EUR/GBP, and usually have wider spreads than the majors.

What is the dollar index (DXY)?

The dollar index (DXY) measures the value of the US dollar against a basket of six important world currencies. Among them are the euro, the Japanese yen, the British pound and the Swiss franc.

The dollar index was introduced in 1973 and is calculated by the Intercontinental Exchange (ICE). It is a weighted average of exchange rates against the dollar, and the euro has by far the largest weight. A rising DXY shows a stronger dollar, a falling one a weaker dollar. The franc side is covered in the USD/CHF forecast.

Conclusion: assessment by Karsten Kagels

As an active trader since 1980, who has followed EUR/USD through several complete market cycles, I see the pair at a crossroads. The sideways phase since June 2025 is ripe for a decision, and both directions have clear price levels.

Technically, the situation is clearly structured. The trading range between about 1.13 and 1.19 has proven itself several times. The attempt to break above the 2025 high at about 1.1920 was rejected, a signal I take seriously. What matters now is the support cluster of the August, July and June lows between 1.1391 and 1.1325, which price has reached after three weeks of decline. On the 4-hour chart the downtrend is still intact, and on the daily chart EUR/USD trades below all four moving averages. The bigger picture is mixed: the uptrend from the 2022 low faces the 200-month average, where the January 2026 rally failed on a monthly close.

On the fundamental side, the picture has turned in 2026. The tariff policy of April 2025 first weakened the dollar. The rate advantage stays with the dollar: the Fed decided on 16 September to raise rates to 3.75 to 4.00 percent, and the ECB had raised its deposit rate to 2.50 percent shortly before. The gap is therefore back at 1.25 to 1.50 percentage points. Such phases can distort chart pictures, which is why I pay more attention to the higher time frames than to intraday swings.

My assessment for the coming weeks: as long as the cluster down to 1.1325 holds, EUR/USD stays in its range, and an interim recovery into the 1.15 area is possible. A weekly close below 1.1325 would end the sideways phase, and then the 2023 high at 1.1276 and the 2024 high at 1.1214 come into view. Only a weekly close above 1.19 would be my signal for new targets in the 1.24 area. For a new long-term uptrend, the 2026 high at 1.2083 then has to be cleared.

Frequently asked questions

Which tools do you use for the EUR/USD forecast?

Technical analysis is used most. It helps to determine support and resistance on the higher time frames. When several factors meet at such a point, for example a monthly or yearly high, the level can send a strong signal to market participants. The classic moving averages (20, 50 and 200 periods) also often mark surprisingly precise limits of price moves, and their crossing points can form significant levels too.

When will the euro rise?

A forecast of the exact timing is impossible. From the analysis of past price behaviour, we narrow the forecast down to likely scenarios in an “if, then” analysis. As long as the support cluster down to 1.1325 holds, a recovery is possible. Only a weekly close above 1.19 would be the signal for new targets in the 1.24 area.

Will the euro fall further?

This question cannot be answered with a clear result either. A currency is always priced in relation to another currency. Over the medium to long term, the news situation and the fundamental data of both currency areas play a role.

When will the dollar rise again?

A weekly close below the June low at 1.1325 would signal further dollar strength. Then the sideways phase since June 2025 would be resolved to the downside. Tailwind comes from the rate gap: the Fed target range has been 3.75 to 4.00 percent since 17 September 2026, the ECB deposit rate 2.50 percent since 16 September.

Will the dollar fall further?

The dollar would fall mainly if EUR/USD breaks above the 2025 high at 1.1918. On average the banks expect only slight dollar weakness: the mean of the Bloomberg survey for the next six months is 1.16 (as of 23 September 2026). Until a breakout, the pair stays in its sideways range.

How will the dollar develop?

Two factors decide: the Fed’s rate decisions and US trade policy. After the September rise, the dot plot shows that the majority of Fed members expect at least one more rate rise by the end of the year, which supports the dollar. Technically, the range between about 1.13 and 1.19 remains the frame, and only a breakout will show the next bigger direction.

What influences the EUR/USD exchange rate?

Many factors influence the EUR/USD exchange rate. They include economic data such as growth, inflation and interest rates, political stability, geopolitical events, trade deficits and surpluses, and speculative activity on the foreign exchange markets.

How accurate are EUR/USD forecasts?

The accuracy of forecasts varies and depends on the method, the data used, market conditions and volatility. Forecasts can be based on long-term trends, fundamental analysis, technical analysis or a combination. They always carry uncertainty and should not be seen as absolute predictions.

Will EUR/USD reach parity in 2026?

Based on the current chart picture, a fall back to parity (1:1) looks unlikely in 2026. Below the support cluster come the 2023 and 2024 highs at 1.1276 and 1.1214. Only a sustained break below 1.10 would bring parity into consideration, and even that would not guarantee a fall to 1.00.

What is the EUR/USD forecast for 2027?

The EUR/USD forecast for 2027 is adjusted regularly to current developments. On the weekly chart, the decisive zone is the area around 1.19 on the upside and 1.13 on the downside. Only a breakout above 1.19 would activate targets in the 1.21 area, while a break below 1.13 would point to targets around 1.06.

Please note

The scenarios are a personal assessment based on experience. They summarize the most likely price development for each time frame and are not a certainty. This is market analysis, not investment advice. Keep your position sizes in line with your own risk management.

This forecast is translated from the German edition on kagels-trading.de.

How our forecasts are made and reviewed: How we work.