During the Asian session, EUR/USD corrected lower to the 1.1680 area, reflecting the European Central Bank’s decision to hold rates at 2.15% and the impact of a newly announced EU–US trade agreement. The July high at 1.1800 remains the key target for bullish momentum.

In its statement, the ECB noted inflation is now in line with its 2.0% medium-term target and recent data matches projections. The central bank underscored the region’s economic resilience, despite global headwinds and unresolved US–EU trade tensions. Policymakers reiterated their readiness to adjust tools as needed to stabilize consumer price growth at 2.0% and maintain effective monetary policy—a message that continues to support the euro.

Over the weekend, President Trump announced a landmark trade deal with the EU. Brussels will invest an additional $600B into the US economy, including large-scale purchases of military and energy goods. Despite the positive headlines, a 15% tariff on European goods, including automobiles, remains in place. This weighed on sentiment, triggering a pullback in the euro.

Macro Data and Market Reactions

Traders are digesting July’s IFO survey data from Germany: the business climate index edged up to 88.6 (vs. 89.0 expected), current conditions improved to 86.5 (vs. 86.7 expected), and expectations reached 90.7 (vs. 91.1 expected). While progress was slower than forecast, the numbers are the most optimistic in over a year. Still, global trade friction clouds the outlook.

This Wednesday at 11:00 (GMT+2), the euro area Q2 GDP report will be released. Initial estimates point to a slowdown: quarterly GDP is forecast to slip from 0.6% to 0.0%, and annual growth from 1.5% to 1.2%. This could pressure the euro, potentially driving EUR/USD down to the monthly low at 1.1560. A bullish surprise, on the other hand, would open the path to retesting July’s peak at 1.1800.

Technical Levels and Trading Scenarios

EUR/USD: Key levels and bullish scenarioEUR/USD: Key levels and bullish scenario

Long-Term Trend: The uptrend remains intact, though the pair is undergoing a mild correction. If support at 1.1560 is tested, long positions targeting 1.1800 (July high) and 1.1888 become attractive.

Medium-Term Trend: In mid-July, EUR/USD bounced from trend support at 1.1557–1.1530, rallying to 1.1800. Breaking above this level could extend gains toward the 1.1908–1.1881 resistance area.

Resistance levels: 1.1800, 1.1888, 1.2250
Support levels: 1.1560, 1.1200, 1.1105

Trade Setups: Weekly Chart

  • Primary Scenario (Buy Limit):
    Entry: 1.1560
    Take Profit: 1.1800
    Stop Loss: 1.1480
  • Alternative Scenario (Sell Stop):
    Entry: 1.1480
    Take Profit: 1.1280
    Stop Loss: 1.1580
  • Key levels for both scenarios: 1.1105, 1.1200, 1.1560, 1.1800, 1.1888, 1.2250