EUR/USD Outlook: ECB and PMI Data in Focus as Euro Holds Near 1.1600

EUR/USD Outlook: ECB and PMI Data Take Center Stage This Week

Euro Traders Brace for Policy Signals and Economic Data

The EUR/USD pair is trading comfortably near the 1.1600 level, showing signs of consolidation ahead of a data-packed week for the Eurozone. Despite a technically stable posture, the euro has little reason to break higher unless key macroeconomic events or policy signals surprise to the upside.

Key Events This Week: ECB and Flash PMIs

The European Central Bank (ECB) policy meeting on Thursday will be the main event driving euro sentiment. Analysts do not expect President Christine Lagarde to significantly shift tone ahead of the summer break. However, recent euro strength and growing trade tensions—particularly ahead of the August 1 tariff deadline—could be subtly addressed.

“We don’t expect the ECB to ruffle feathers this week, but the FX volatility curve hints at investor nerves,” said one analyst, referencing the implied volatility spike in EUR/USD options.

On the data front, Eurozone flash PMIs for July also release Thursday. With composite readings hovering around the 50 threshold, markets will closely monitor inventory levels for signs of supply depletion that may support short-term demand recovery.

German Ifo Expectations Also in Focus

Friday brings the German Ifo Business Climate Index, which is expected to reflect continued optimism in expectations, largely due to longer-term infrastructure plans. Analysts, however, caution that such optimism may be front-loaded for the 2026 horizon, offering little immediate impact.

Technical Range and Market Behavior

EUR/USD is expected to consolidate within last week’s 1.1550–1.1720 range, barring major surprises. Volatility may pick up depending on tone from the ECB press conference and the PMI data’s forward-looking components.