• EUR/USD alternated gains with losses around 1.0900.
  • The US Dollar ended Tuesday’s session barely changed.
  • The Economic Sentiment in Germany worsened in July.

The US Dollar (USD) regained some balance after stronger-than-expected Retail Sales, although that initial upside impetus ran out of steam as the NA session drew to a close on Tuesday.

Against that backdrop, the USD Index hovered around the low-104.00s, while EUR/USD managed to regain composure and reclaimed the 1.0900 neighbourhood following an earlier drop to the area below that round level.

The inconclusive price action around spot came amidst further demand for the fixed-income space on both sides of the ocean, resulting in the acceleration of the downtrend in US and German yields across various timeframes.

Meanwhile, the macroeconomic landscape remained stable. Investors generally expect the European Central Bank (ECB) to keep its policy rate unchanged at its July 18 meeting, though markets still anticipate two additional cuts by the end of the year.

Conversely, there is ongoing debate among investors about whether the Fed will implement one, two, or three rate cuts this year, despite the Fed's current projection of a single cut, likely in December.

Furthermore, the CME Group's FedWatch Tool fully priced in lower rates at the September 18 meeting.

The ECB's rate cut in June, coupled with the Fed's decision to maintain rates, has widened the policy divergence between the two central banks, potentially leading to further weakening of EUR/USD in the short term.

However, economic recovery prospects in the Eurozone, along with signs of cooling in key US economic indicators, may mitigate this disparity and occasionally support the pair in the near future, a view that appears to have regained poise on the back of rising expectations of rate cuts by the Fed.

Looking ahead, upcoming US data coupled with Fedspeak and the ECB event should remain the key drivers of the pair’s price action in the short-term horizon at least.

EUR/USD daily chart

EUR/USD short-term technical outlook

EUR/USD is expected to meet the next upward hurdle at 1.0922 (July 15), followed by the March peak of 1.0981 (March 8) and the psychological 1.1000 barrier.

If bears seize control, spot may touch the 200-day SMA of 1.0806 before sliding to the June low of 1.0666 (June 26). From here, the loss of the May low of 1.0649 (May 1) leads to the 2024 bottom of 1.0601 (April 16).

Looking at the broader picture, it looks that more gains are in the works if the crucial 200-day SMA is continuously breached.

So far, the 4-hour chart indicates that some consolidative fashion might have kicked in. The initial resistance level is 1.0922, which comes ahead of 1.0981. On the other hand, the 55-SMA at 1.0847 comes first, followed by the 200-SMA at 1.0788, and lastly 1.0709. The RSI (relative strength index) rose to around 60.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD retreats from multi-month tops, back near 1.1050

EUR/USD retreats from multi-month tops, back near 1.1050

Following a move to six-month highs in the 1.1140-1.1150 band, EUR/USD now gives away part of those gains on the back of a mild attempt of recovery in the US Dollar as investors continue to assess President Trump's recent annoucements.

EUR/USD News
GBP/USD off highs, remains well bid near 1.3100

GBP/USD off highs, remains well bid near 1.3100

GBP/USD now partially sets aside its earlier advance in favour of fresh peaks just north of the 1.3200 mark, challenging the 1.3100 neighborhood on the back of a tepid bounce from recent multi-month lows in the Greenback.

GBP/USD News
Gold looks offered near $3,100

Gold looks offered near $3,100

Prices of Gold remain on the defensive on Thursday, hovering around the $3,100 region per troy ounce and retreating from earlier all-time peaks near the $3,170 level, all against the backdrop of investors' assessment of "Liberation Day".

Gold News
SOL is the winner as Solana chain turns into battleground for meme coin launchpad and DEX

SOL is the winner as Solana chain turns into battleground for meme coin launchpad and DEX

Solana (SOL) gains nearly 2% in the last 24 hours and trades at 118.28 at the time of writing on Thursday. A Decentralized Exchange (DEX) and a meme coin launchpad built on the Solana blockchain have waged a war for users and compete for the trade volume on the chain. 

Read more
Trump’s “Liberation Day” tariffs on the way

Trump’s “Liberation Day” tariffs on the way

United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs. 

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Majors

Cryptocurrencies

Signatures

Best Brokers of 2025