Notably, wholesale prices (PPI) actually fell from 2.7% to 2.3%, with the core reading sliding from 3.2% to 2.6%. As this data only reflects domestic US pricing and doesn't yet account for the full effect of higher tariffs on foreign goods, the market’s reaction has been relatively muted. However, with inflation pressures still elevated, traders increasingly expect the Federal Reserve to maintain its current policy stance through the medium term—most analysts now anticipate the first rate cut only at the end of this year or early next.

The US dollar also drew support from recent statements by President Trump, who dismissed speculation about firing Fed Chair Jerome Powell, calling such a move "highly unlikely." This assurance helped reinforce expectations of policy stability and reduced market fears of abrupt leadership changes at the Fed.

Euro Struggles Under the Weight of US Tariffs and ECB Easing Risks

The euro, meanwhile, remains under pressure amid ongoing uncertainty over a possible 30% US tariff on EU imports. Today’s June data showed inflation in the eurozone has stabilized, with the headline Consumer Price Index at the 2.0% ECB target and core inflation steady at 2.3%. This outcome increases the probability that the European Central Bank will cut rates again in the autumn, further weighing on the single currency.

Technical Analysis: Key Support at 1.1597, But Bulls Not Out of the Game

EUR/USD is now probing the 1.1597 Murray support zone. A decisive break below this level could open the door to deeper declines toward 1.1475 (Murray [6/8]) and then 1.1230 (Murray [4/8]). Conversely, a move back above 1.1719 (Murray [8/8], reinforced by the midline of the Bollinger Bands) would revive bullish momentum, with the next upside targets at 1.1963 and 1.2207.

Technical indicators suggest a lingering bullish bias: Bollinger Bands are still pointing upwards, even as MACD remains negative (but narrowing), and the Stochastic oscillator is turning higher out of oversold territory.

EUR/USD nears key support zoneEUR/USD nears key support zone

Key Resistance Levels

  • 1.1719
  • 1.1963
  • 1.2207

Key Support Levels

  • 1.1597
  • 1.1475
  • 1.1230

Trading Strategies for the Week

  • Buy Stop: Enter long positions above 1.1719, targeting 1.1963 and 1.2207, with a stop-loss at 1.1560. Timeframe: 5–7 days.
  • Buy Limit: Consider longs on a reversal near 1.1475, aiming for 1.1963 and 1.2207, with a stop-loss at 1.1330.

Key levels: 1.1230, 1.1475, 1.1597, 1.1719, 1.1963, 1.2207

Conclusion: Short-Term Dollar Surge, But Euro Not Out of Play

While the dollar’s recent strength is rooted in robust inflation data and White House messaging, these drivers may prove temporary as tariff effects filter through the real economy. With the ECB eyeing further rate cuts and US policy likely to stay on hold, expect choppy trading and rapid shifts in sentiment—especially near key technical levels.