EUR/USD Forecast and News
EUR/USD: A drop to 1.1000 in the offing?
EUR/USD accelerated its monthly retracement on Monday, retreating to multi-week lows in the vicinity of 1.1060 following the generalised recovery in the US Dollar, all in response to the auspicious outcome from the US-China talks in Geneva on Saturday.
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EUR/USD Technical Overview
EUR/USD remains capped below its 2025 peak of 1.1572 (April 21), with the 1.1600 level and the October 2021 high at 1.1692 acting as key resistance zones.
Initial contention comes at the May trough of 1.1067 (May 12), prior to the interim 55-day SMA at 1.1015, and the 200-day SMA at 1.0793.
Momentum indicators suggest possible near-term consolidation. The Relative Strength Index (RSI) has slipped to the 40 zone, while the Average Directional Index (ADX) at 39 points to a sustained trend, albeit with diminishing strength.
Fundamental Overview
The Euro (EUR) extended its monthly retreat on Monday, with EUR/USD slipping toward the 1.1070 region as the US Dollar (USD) gathered fresh and intense momentum. The move followed renewed optimism surrounding US-China trade relations, all in response to the constructive tone from the meeting between US and Chinese officials over the weekend.
The US Dollar Index (DXY) advanced to five-week tops near the 102.00 hurdle, with broad-based gains reflecting increased optimism on the trade front as well as a re-pricing of Fed policy expectations
Cautious optimism on trade front
Investor sentiment improved markedly following auspicious talks between US and Chinese officials over the weekend. Indeed, under the agreement, reciprocal tariffs between the United States and China will be slashed from over 100% to just 10%, marking a significant de-escalation in trade tensions. However, the Trump administration will maintain a 20% tariff on fentanyl-related imports from China, leaving the overall US tariff burden at 30% during the 90-day pause period.
The upbeat tone added to last week’s announcement of a US-UK trade deal as well as bullish remarks from President Trump, who signalled readiness for further agreements.
Monetary policy paths diverge sharply
Diverging central bank stances are also shaping the EUR/USD narrative. The Fed opted to hold rates steady this week, while maintaining a hawkish tone, in contrast with the European Central Bank (ECB), which cut its benchmark rate by 25 basis points last month to 2.25%.
Markets are now pricing in the possibility of another ECB cut as early as June, deepening the policy divergence and casting doubt over the euro’s ability to hold recent gains if the Fed stays on a tighter trajectory.
Speculative support for the Euro persists
Speculative interest in the Euro remains firm. CFTC data as of May 6 showed net long positions almost unchanged around 75.7K contracts, hovering around multi-month high. Open interest rose again, approaching the 738K, levels last seen in September 2024.
Still, commercial hedgers stayed net short, reflecting continued corporate caution amid an uncertain outlook.
Outlook: Volatility likely to persist
EUR/USD is being pulled in opposing directions. The Euro’s resilience is underpinned by speculative interest and political developments, but the growing divergence in monetary policy—and shifting trade dynamics—may keep the pair headline-driven and volatile in the near term.
SPECIAL WEEKLY FORECAST
Interested in weekly EUR/USD forecast? Our experts make weekly updates forecasting the next possible moves of the Euro-US Dollar pair. Here you can find the most recent forecast by our market experts:
EUR/USD: Under pressure as Fed tone, trade progress fuel US Dollar rebound Premium
The Euro (EUR) managed to regain some composure toward the end of the week, sparking a daily reversal in EUR/USD after easing below the 1.1200 level, or multi-week troughs, early on Friday. The recovery, however, did not change the pair’s weekly performance, which reached the third drop in a row.
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Editors' picks
EUR/USD: A drop to 1.1000 in the offing?
EUR/USD accelerated its monthly retracement on Monday, retreating to multi-week lows in the vicinity of 1.1060 following the generalised recovery in the US Dollar, all in response to the auspicious outcome from the US-China talks in Geneva on Saturday.
GBP/USD faces decent resistance near 1.3220
GBP/USD’s intraday rebound stalled near the 1.3220 region, encountering interim resistance as the British pound remained under pressure. The move came amid renewed strength in the US Dollar, which extended gains following a US-China agreement to significantly reduce tariffs and implement a 90-day pause.
Japanese Yen plummets to fresh one-month low against USD after US and China agree to lower tariffs
The Japanese Yen kicks off the new week on a weaker note amid the US-China trade deal optimism. The Fed’s hawkish pause and easing US recession fears underpin the USD and support USD/JPY. The selling bias picks up pace following the US-China joint statement on trade arrangements.
Gold: Gains appear limited near $3,250
Gold began the week under pressure, retreating toward the $3,200 mark per troy ounce, where some support appeared to materialise. The decline followed a broader improvement in risk sentiment after encouraging developments emerged from US-China trade talks over the weekend.
WTI sits near two-week high, just below $61.00 as traders await US-China trade deal details
West Texas Intermediate US Crude Oil prices rise to a nearly two-week high during the Asian session on Monday, though bulls struggle to find acceptance or build on the momentum beyond the $61.00 mark.
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EUR/USD Yearly forecast
How could EUR/USD move this year? Our experts make a EUR/USD update forecasting the possible moves of the euro-dollar pair during the whole year. Don't miss our 2025 EUR/USD forecast!
EUR/USD FORECAST 2025
In the EUR/USD 2025 Forecast , FXStreet Chief Analyst Valeria Bednarik suggests that the macroeconomic landscape favors the US Dollar (USD) over the Euro (EUR), with a potential return to parity between the currencies.
While Donald Trump’s upcoming presidency may introduce higher inflation-related risks for the United States (US), the US economy demonstrated the strongest pandemic recovery among G7 nations, as measured by GDP, starting under Trump’s previous administration and following under Joe Biden.
From a technical point of view, the EUR/USD pair faces a bearish outlook for 2025, with technical indicators suggesting further declines after breaking below key moving averages and encountering strong resistance near 1.1200. The pair could test the 1.0330 zone, with the potential for parity if selling pressure persists. While a bearish trend is most likely, a sudden EU economic recovery or US weakness could push the pair toward 1.0600, with a possible rally to 1.1000 later in the year, though not before mid-2025.
MOST INFLUENTIAL FACTORS IN 2025 FOR EUR/USD
The year will be politically marked by Trump’s return to the White House. A Republican government is seen as positive for financial markets, but Trump’s pledge to cut taxes and impose tariffs on foreign goods and services may introduce uncertainty to both the political and economic landscape.
In the Eurozone, attention will focus on political turmoil in Germany and France, the two largest economies in the bloc. Germany is set to hold snap elections following a no-confidence vote against Chancellor Olaf Scholz in the Bundestag.
Influential Institutions & People for the EUR/USD
The European Central Bank (ECB)
The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone. With its beginnings in Germany in 1998, the ECB’s mandate is to maintain price stability in the Eurozone, so that the Euro’s (EUR) purchasing power is not eroded by inflation. As an entity independent of individual European Union countries and institutions, the ECB targets a year-on-year increase in consumer prices of 2% over the medium term. Another of its tasks is controlling the money supply. This involves, for instance, setting interest rates throughout the Eurozone. The European Central Bank’s work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Christine Lagarde has been the President of the ECB since November 1, 2019. Her speeches, statements and comments are an important source of volatility, especially for the Euro and the currencies traded against the European currency.
ECB official website , on X and YouTubeThe Federal Reserve (Fed)
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website , on X and FacebookChristine Lagarde
Christine Lagarde was born in 1956 in Paris, France. Lagarde, who graduated from Paris West University Nanterre La Défense, became President of the European Central Bank (ECB) on November 1, 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund (IMF) between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007-2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005-2007).
Lagarde on ECB's Profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. He was sworn in on May 23, 2022, for a second term as Chairman ending May 15, 2026. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
ECB NEWS & ANALYSIS
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About EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a term used t o describe the most important currency pairs in the world. This group also includes GBP/USD, USD/JPY, AUD/USD , USD/CHF, NZD/USD and USD/CAD . The popularity of the Euro Dollar pair stems from its representation of two of the world’s largest economies: the Eurozone and the United States.
The EUR/USD is one of the most widely traded currency pairs in the Forex market, where the Euro serves as the base currency and the US Dollar as the counter currency. It accounts for more than half of the total trading volume in the Forex market, making gaps almost inexistent, let alone sudden reversals caused by breakaway gaps.
The EUR/USD is usually quiet during the Asian session, as economic data influencing the pair is usually released during the European or US sessions. Activity increases as European traders begin their day, leading to heightened trading volume. This activity slows around midday during the European lunch break but picks up again when US markets come online.
Related pairs
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', referring to the most important and widely traded pairs in the world. The pair is also known as “the Cable”, a term originating in the mid-19th century that refers to the first transatlantic telegraph connecting Great Britain and the United States. As a closely watched and widely traded currency pair, it features the British Pound as the base currency and the US Dollar as the counter currency. For that reason, macroeconomic data from both the United States and the United Kingdom significantly impacts its price. One notable event that affected the volatility of the pair was Brexit.
USD/JPY
The USD/JPY (US Dollar Japanese Yen) currency pair is one of the 'Majors', a group of the most important currency pairs in the world. The Japanese Yen, known for its low interest rate, is frequently used in carry trades, making it one of the most traded currencies worldwide. In the USD/JPY pair, the US Dollar is the base currency and the Japanese Yen serves as the counter currency.
Trading USD/JPY is also known as trading the "ninja" or the "gopher", although the latter nickname is more frequently associated with the GBP/JPY pair. USD/JPY usually has a positive correlation with other pairs like USD/CHF and USD/CAD, as all three use the US Dollar as the base currency. The value of the pair is often influenced by interest-rate differentials between the two central banks: the Federal Reserve (Fed) and the Bank of Japan (BoJ).