EUR/USD Forecast: Breaking higher on ECB, trade, and finally looking a bit bullish

The EUR/USD is extending its gains and reaches the highest levels in two weeks.
Trade-related USD weakness and optimism about the ECB are the primary drivers.
The technical picture is almost entirely balanced after a long time in the doldrums.

Yohay Elam FXStreet

The EUR/USD is moving higher, trading above 1.1750 and at the highest levels since May 23rd. The latest boost for the common currency came from reports that the European Central Bank will have a live discussion on exiting the QE program in its upcoming meeting on June 14th. So far, the ECB seemed to be trying to push the decision to the last moment. The current scheme consists of buying €30 billion per month through September. Markets expect the program to be reduced afterward and end at the end of the year.

After the recent rate decision in April, Draghi said there was no discussion about monetary policy, and his words weighed on the Euro. The reports about a discussion join the beat in euro-zone inflation seen reported last week. It is also joined by relatively upbeat speeches by ECB members Praet, Hanson, and Weidmann. All expressed confidence in reaching the 2% inflation target.

The Euro initially stabilized on political calm in Italy. After a turbulent week that saw fears of an Italexit swell, the populist government won votes of confidence in both chambers of parliament. The policies that will come from the new government still cause concern, but these concerns are sidelined now.

In the US, the Trump Administration is not relenting on steel and aluminum tariffs on the EU nor its NAFTA partners. Moreover, the Top Economic Adviser Larry Kudlow said Trump is contemplating splitting NAFTA into separate deals with Canada and Mexico. The tough approach to trade weighs on the US Dollar.

EUR/USD Technical Analysis

The EUR/USD not only broke above the downtrend resistance line but is now also seeing its RSI move towards the balanced territory of 50. Also, downward momentum which dominated the pair for a long time has now diminished.

1.1767 is the immediate battle line after supporting the pair on its way down. The May 9th low of 1.1822 is the next level to watch. 1.1915 was the January low and is next.

On the downside we find 1.1648 which was the close on May 25th, followed by 1.1610, a stepping stone on the way down, and finally the low point of 2018 which was 1.1510.

More: EUR/USD targets 1.1870 after the big breakout — Confluence Detector

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

GBP/USD drops to fresh weekly low below 1.3400

GBP/USD turns south in the second half of the day on Tuesday and trades at a fresh weekly-low below 1.3400 as the Middle East uncertainty causes investors to adopt a cautious stance. Earlier in the day, the data from the UK showed that the Unemployment Rate remained at 4.9% in the three months to May, compared with expectations of 5%, but failed to support the British Pound.

EUR/USD keeps range above 1.1400 after German ZEW

EUR/USD struggles to find direction and fluctuates in a narrow channel above 1.1400 on Tuesday, as the US Dollar (USD) stabilizes following Monday's rebound. The uncertainty around the US-Iran conflict limits the pair's upside but traders refrain from taking large positions ahead of the European Central Bank policy announcements on Thursday, which could drive the Euro's near-term valuation.

Gold clings to moderate gains above $4,050

Gold gains traction following Monday's choppy action and advances toward $4,100 on Tuesday. However, the uncertainty surrounding the conflict in the Middle East and growing expectations for a hawkish Federal Reserve policy outlook make it difficult for the precious metal to gather bullish momentum in the near term.

XRP extends recovery as on-chain activity grows

Ripple (XRP) ticks up and trades around $1.13 at the time of writing on Tuesday. This rebound aligns with a broader recovery in the cryptocurrency market, attributed to reports that mediators between the United States (US) and Iran are seeking a 10-day cessation of strikes to find a way back to the signed Memorandum of Understanding (MoU).

The Iranian war has again risen

The Iranian war has again risen to the top of the economics factor list. There is no end in sight. Intelligence experts say the current level of offense/retaliation will not change minds in Tehran, while in Washington, Trump fears all-out war, which would mean boots on the ground.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.