Today’s EUR/USD forecast is bullish. As investors anticipated Federal Reserve Chair Jerome Powell’s speech this coming Friday for new cues on the direction of monetary policy, the U.S. dollar retreated from a near two-decade top against a basket of other currencies on Thursday.

Investors have been preparing for the Fed’s annual meeting in Jackson Hole, Wyoming, where they expect it to reaffirm its commitment to stifling inflation.

Following a chorus of hawkish Fed commentary recently, the money markets have reduced expectations that the U.S. central bank could tilt to slower rate hikes. Currently, they are giving odds of 58.5% on another massive 75 basis-point rate hike next month versus a probability of 41.5% for a half-point increase.

“Expectations of a hawkish message from FOMC Chair Powell at Jackson Hole will likely keep upward pressure on the USD,” Commonwealth Bank of Australia analyst Kristina Clifton wrote in a client note.

“However, there is a risk that the speech is deemed not hawkish enough and that we see some retracement in the USD.”

Following a 20-year low of $0.99005 on Tuesday, the euro rose 0.18% to $0.99865.

Investors are on edge before Russia halts gas shipments through the critical Nord Stream 1 pipeline for three days starting Wednesday for unforeseen maintenance, which has weakened the euro as the area experiences an energy crisis.

EUR/USD Key Events Today

Today’s news releases from the eurozone will include German GDP for Q2 and the German Ifo Business Climate Index for August. From the United States, investors will pay attention to Q2 GDP and the Initial Jobless Claims report.

EUR/USD Technical Forecast: Bulls Gearing Up For A Break Above Parity

Looking at the 4-hour chart, we see the price attempting a break above the 30-SMA. The RSI has also started trading above 50, indicating that sentiment might shift from bearish to bullish. At the same time, the price is breaking back above parity which is a crucial resistance level.

If bulls can close above the SMA and the 1.0 fundamental resistance level, the price will likely head for the next resistance level at 1.01007.

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