Major banks, including Goldman Sachs and BNP Paribas, have revised their expectations. BNP Paribas believes the "dovish" cycle is over, projecting the next ECB rate hike in Q4 2026, while JPMorgan Chase shifted its forecast for the next rate cut from September to October 2025.
ECB President Christine Lagarde acknowledged the resilience of the eurozone economy, but highlighted ongoing global uncertainty, particularly with U.S. trade relations. Tomorrow at 5:00 AM ET, market focus shifts to June retail sales data for the euro area, expected at +0.4% MoM and +1.2% YoY.
Meanwhile, the US Dollar Index (DXY) trades around 99.00, rebounding after a 1% drop. The market is pricing in a possible Fed rate cut in September, following softer nonfarm payrolls (+73K) and downward revisions for prior months (-258K). Signs of rising inflation and stagnant real incomes are increasing uncertainty for U.S. consumers, with companies like Apple, Shake Shack, and Canada Goose reporting weaker sales due to higher prices.
Technical Analysis & Key Levels
After correcting lower last week, EUR/USD regained ground, now testing resistance at 1.1597–1.1640 (Murray [7/8], Bollinger Bands midline). A breakout could fuel further gains toward 1.1841 (Murray [+1/8]) and 1.1963 (Murray [+2/8]). The key support for bears is 1.1475 (Murray [6/8]): sustained trading below this level opens the door for a decline to 1.1230 (Murray [4/8], 38.2% Fibonacci retracement) and 1.0986 (Murray [2/8]).
- Resistance levels: 1.1640, 1.1841, 1.1963
- Support levels: 1.1475, 1.1230, 1.0986
Technical indicators are mixed: Bollinger Bands are turning down, MACD remains negative, but Stochastic is pointing higher.
Trading Scenarios for EUR/USD
- Sell Stop: Entry at 1.1475, Targets at 1.1230 & 1.0986, Stop Loss at 1.1590
- Buy Stop: Entry at 1.1640, Targets at 1.1841 & 1.1963, Stop Loss at 1.1480
Key levels: 1.0986, 1.1230, 1.1475, 1.1640, 1.1841, 1.1963