On one side, the US dollar is pressured by aggressive trade policy from the White House. President Donald Trump has announced new tariffs for 21 countries, including Japan and South Korea, and notified key partners that sanctions will take effect on August 1 if no deal is reached. Further, the administration is preparing a 50% tariff on copper imports and a staggering 200% tax on pharmaceutical products. This hawkish stance fuels recession fears in the US, as the forex analytics community notes.
On the other side, the Federal Reserve continues to resist immediate policy easing. June meeting minutes showed most FOMC members favor waiting until late 2025 or early 2026 for rate cuts, citing persistent inflation risks, while only a minority would support action this month. Analysts warn that growing tension with the executive branch could bring additional pressure on the US dollar if the Fed’s leadership is challenged. By contrast, the European Central Bank (ECB) appears set to continue its dovish cycle, with eurozone inflation nearly subdued and economic growth requiring support amid ongoing trade sanctions, especially on metals and autos.
Despite the current correction, mid-term fundamental factors continue to favor further upside in EUR/USD, as many forex analysts on platforms like DailyFX and FXStreet predict.
Support and Resistance Levels
The pair trades near 1.1719 (Murray [8/8]). A sustained move above this level could extend gains toward 1.1963 (Murray [+2/8]), 1.2207 (Murray [+2/8], W1), and 1.2355 (100% Fibonacci extension). The key “bearish” level remains 1.1475 (Murray [6/8]), reinforced by the lower Bollinger Band: a break below would open the way to 1.1230 (Murray [4/8]) and 1.0986 (Murray [2/8]), though this scenario is less likely in the current forex forecast.
Technicals support the bullish case: Bollinger Bands are sloping upwards, the MACD histogram is expanding in positive territory, and Stochastic has reached oversold and could soon reverse.
- Resistance: 1.1719, 1.1963, 1.2207, 1.2355
- Support: 1.1475, 1.1230, 1.0986
Trading Scenarios (Top Forex Analytics)
- Buy Stop: Enter above 1.1760, with targets at 1.1963, 1.2207, 1.2355, stop-loss 1.1620. (5–7 days horizon)
- Sell Stop: Enter below 1.1475, with targets at 1.1230, 1.0986, stop-loss 1.1670.
Analyst Commentary & English-Language Forex Forecasts
According to ING and FXStreet analysts, the euro's pullback from its highs is likely temporary as the ECB stays dovish and US fiscal/trade uncertainty builds. "A sustained move above 1.1750 opens the door for a push towards 1.20 as long as the Fed holds its ground and risk sentiment stabilizes," notes ForexLive. The consensus among leading forex forecast sites remains that EUR/USD is biased upward unless the Fed unexpectedly turns hawkish or eurozone data deteriorates.
EUR/USD forecast: Dollar pressured by US tariffs, Euro in long-term uptrend, technical and analyst views