EUR/USD Analysis Summary Today
- Overall Trend: Bullish
- Today's EUR/USD Support Levels: 1.1430 – 1.1360 – 1.1290
- Today's EUR/USD Resistance Levels: 1.1520 – 1.1600 – 1.1720
EUR/USD Trading Signals:
- Buy EUR/USD from the support level of 1.1380 with a target of 1.1420 and a stop-loss at 1.1300.
- Sell EUR/USD from the resistance level of 1.1570 with a target of 1.1300 and a stop-loss at 1.1640.
EUR/USD Technical Analysis Today:
Following the release of US inflation figures, the EUR/USD currency pair surged to the doorstep of the 1.1500 resistance, nearing its highest levels since June 2021. The Euro's gains against the US Dollar intensified as investors assessed the growing divergence in monetary policy expectations between the European Central Bank (ECB) and the US Federal Reserve. Recent statements from ECB officials have reinforced expectations that the central bank may soon pause its monetary easing cycle, adopting a wait-and-see approach to evaluate the economic impact of new US tariffs. In May, Eurozone inflation fell to 1.9%, while the ECB cut its interest rate for the eighth consecutive time, bringing the deposit facility rate down to 2%.
Meanwhile, the European bloc's economy has shown resilience, growing by 0.6% in the first quarter, the strongest pace since the third quarter of 2022.
Conversely, weaker-than-expected US inflation data weighed on the dollar, reinforcing speculation that the Federal Reserve could begin cutting interest rates as early as September. However, uncertainty remains, as inflation and the labour market remain relatively resilient, while headwinds to growth from tariffs continue to mount.
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Will the EUR/USD rise in the coming days?
Dear reader, according to forex market experts, overall market volatility has decreased with narrower trading ranges, but financial markets remain highly cautious that underlying tensions could quickly ignite a new round of turmoil. On another note, trade negotiations will continue, and another important US Treasury bond auction is scheduled for later today following the latest inflation data. Markets are also monitoring political developments, including the US administration's reaction to the Los Angeles protests and potential threats to the Federal Reserve's independence.
Trading Advice:
We still recommend selling the Euro against the US Dollar on every upward rebound, while continuously monitoring market influencing factors and avoiding risk, regardless of how strong the trading opportunities may seem.
Amidst these factors, the EUR/USD pair appears to have entered a trading range, likely between 1.1330 and 1.1495. Generally, the US Dollar will largely determine the EUR/USD's direction today, with some potential support near 1.1400. There's a possibility for it to rise above 1.1500 if pressure on the US Dollar continues. The next key resistance will be 1.1575, which would push technical indicators towards strong overbought levels, particularly the 14-day RSI (Relative Strength Index) and the MACD (Moving Average Convergence Divergence) indicator. The EUR/USD pair will be influenced by remaining US inflation figures, weekly US jobless claims data (all due at 3:30 PM Egypt time), and the future of US-China trade negotiations.
Global Bank Forecasts for EUR/USD:
According to the insights and forecasts of global currency market experts, the Euro is expected to rise to its highest level against the US Dollar since 2021 this year. This conclusion comes from analysts at two major investment banks who have revised their mid-year currency market forecasts. Looking ahead to the second half of 2025, Nomura anticipates that the Euro will benefit from shifts in asset allocation and divergences in fiscal, monetary, and foreign exchange policies. This call comes amid a significant re-evaluation of US economic prospects by international investors, who have become more cautious under a potential second Trump presidency.
At the same time, questions regarding the Federal Reserve's independence have been raised following repeated attacks from Trump. Meanwhile, his new spending and tax bill – the "Big, Beautiful Bill" – promises to increase the US debt burden, including a provision for special taxes on foreign investors. And of course, there is significant uncertainty on the trade front, with a sharp increase in tariffs. Accordingly, Morgan Stanley predicts that US trade and increasing fiscal policy uncertainty will keep the US Dollar risk premium elevated, and the steepening or flattening of the US yield curve contributes to the weakening of the US Dollar against its counterparts like the Euro.
On another note, Relative stability in Europe, coupled with Germany's commitment to infrastructure and defence investments, is making the euro an alternative destination for foreign investors. Accordingly, Morgan Stanley added, "We maintain our bullish recommendation on the EUR/USD pair."
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