EUR/USD Analysis Summary Today
- Overall Trend: Bullish.
- Today's Euro-Dollar Support Levels: 1.1375 – 1.1300 – 1.1220.
- Today's Euro-Dollar Resistance Levels: 1.1460 – 1.1520 – 1.1600.
EUR/USD Trading Signals:
- Buy Euro-Dollar from the 1.1340 support level with a target of 1.1420 and a stop-loss of 1.1300.
- Sell Euro-Dollar from the 1.1480 resistance level with a target of 1.1200 and a stop-loss of 1.1540.
EUR/USD Technical Analysis Today:
As anticipated, EUR/USD trading has remained within tight ranges, awaiting reactions to crucial US economic releases, primarily US inflation figures, which influence market expectations for the future of US Federal Reserve policies, alongside the outcomes of US-China trade talks. The EUR/USD price is currently around 1.1420, awaiting further developments. According to trading experts' forecasts, the Euro might regain its upward trajectory seen in 2025. Meanwhile, the EUR/USD exchange rate could experience a larger decline in the coming days before eventually resuming its bullish trend that began in 2025. Generally, technical observations provide an approximate outline of how we see the situation evolving in the near term: some pullback in the exchange rate, as a large, long position in the market frustrates upward momentum. (Everyone is betting against the dollar, meaning the position is inflated and increasingly stagnant).
Any additional weakness might extend towards the 1.13 support level in the coming days, and we expect a return of buying interest from this point, in line with the bullish trend. If the EUR/USD pair retreats to the 1.13 level, we would lean towards anticipating a deeper consolidation period, perhaps enabling us to get through the summer months. For now, we believe the upward trend is intact, and this is why we anticipate a final move for the Euro to $1.15 by July.
According to recent forex market trading, the EUR/USD pair declined last Friday following a stronger-than-expected US employment report. This report indicated that the US economy remains robust despite sometimes volatile policies from US President Donald Trump, his verbal attacks on the Federal Reserve, and concerns regarding tariffs.
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Overall, it is certain that the US economy is slowing, and its exceptionalism is diminishing, which will ultimately contribute to the US dollar's decline. However, official data suggests that the repercussions of tariffs are relatively limited at present, hinting at a rapid decline for the US dollar.
On another front impacting the forex market, trade talks between China and the US in London are likely to contribute to the dollar's recovery in the coming days. Both sides aim to resolve issues such as rare earth metal exports, tariffs, and restrictions on advanced technology. The US seeks to restore essential metal flows, while China aims for tariff reductions and easing of export controls.
Trading Tips:
We still advise and recommend selling the Euro/US Dollar on every strong upward rebound, while consistently monitoring market influencing factors and avoiding excessive risk, regardless of the strength of trading opportunities.
Progress in this regard will calm tensions regarding the trade war, ultimately suggesting a lower overall tariff burden than what would be assumed if China and the US fail to reach a solution on outstanding issues. This will eventually be beneficial for the US economy and the US dollar.
According to currency market experts, the main event on the US calendar is Wednesday's inflation reading, which is expected to be 2.5% year-on-year. Any reading higher than this will reduce the likelihood of the Federal Reserve cutting interest rates in the coming months and strengthen the US dollar. However, US interest rate expectations have been relatively uninfluential on the US dollar recently, meaning that the general diversification of foreign investments away from the United States in response to Trump's policies will remain the primary driver for the US dollar.
On the monetary front affecting EUR/USD trading, the European Central Bank (ECB) cut interest rates by 25 basis points last week, bringing borrowing costs to their lowest since November 2022, and lowered its inflation forecasts for 2025 and 2026. However, the bank also indicated that it might be nearing the end of the current easing cycle, contrary to previous expectations.
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