- The EUR/USD enjoyed a solid month of upwards price action in June, and as July gets ready to start technical and fundamental traders will have their perspectives tested quickly in the coming days.
- As of this writing the EUR/USD is near the 1.17280 ratio, which is rather remarkable considering the starting point for the currency pair one month ago.
- The bullish attitudes in the EUR/USD remained strong the past handful of weeks and the currency pair is certainly testing higher realms not seen since October of 2021.
- Technical traders will have to likely engage with long-term charts to grow accustomed to the current values the EUR/USD is trading.
USD centric weakness has been strong in Forex for a few months. Yes, the Middle East conflict which escalated on the 13th of June caused some temporary risk adverse trading, but by early last week’s ceasefire Forex resumed its negative USD outlook. There is also the factor of an outlook which believes the Federal Reserve will have to begin cutting interest rates in the mid-term which has been priced into the USD in recent weeks.
Bullish Sentiment and Federal Reserve Outlook Storm Clouds
Highs attained in the EUR/USD which are testing long-term values will now run into questions. The consideration that the currency pair may have become too overbought and will now face a test of choppiness due to certain factors already having been priced in are legitimate. If financial institutions have factored two interest rate cuts by the Federal Reserve, this could now begin to create headwinds for the EUR/USD as financial institutions consider fair market outlook.
Short and near-term considerations regarding the U.S spending bill may also factor into Forex over the first week of July. While it seems likely a budget bill will eventually be passed, it might not come about easily and this could cause storms in Forex until clarity is achieved. There are also potential shadows because of the July 9th tariff deadline via the White House and negotiating nations which will get plenty of attention. Thus it is possible until the 10th of July that nervous sentiment may cause some problems for the EUR/USD.
Resistance Levels and Equilibrium
As the EUR/USD trading within highs not seen in quite some time, financial institutions are certainly going to ask where resistance levels need to be given attention. The range of 1.17200 to 1.17300 over the near-term will prove interesting. Day traders need to remember that outlooks via commercial Forex traders tend to look at mid-term values and benchmarks. The ability of the EUR/USD to sustain prices over the 1.17000 is a solid result and one that hasn’t been seen for a number of years.
- Traders who believe more upside is available in the EUR/USD may be proven correct. However the price velocity seen in June might not be repeated in July.
- Traders should not get overconfident regarding ambitious targets.
- Certainly the EUR/USD has traded at higher values in the past, but day traders should keep their targets realistic and cash in profits when they are achieved.
- Higher targets between 1.17300 and 1.17700 look technically feasible, but financial institutions may want a bit more impetus before they venture forth with higher price outlooks.
EUR/USD Outlook for July 2025:
Speculative price range for EUR/USD is 1.16100 to 1.18200
Having attained a significant amount of bullish price action in June, day traders may believe July can produce more upside. However, speculators should consider that the U.S Fed will likely have to signal they intend on being actively dovish regarding interest rate cuts, and this may not happen. The Fed will meet in the end of July and this will certainly lead some financial institutions towards trying to anticipate the Fed’s rhetoric.
But the Fed has proven conservative the past several months and may remain rather cautious even if it talks about an interest rate cut during its FOMC meeting. The EUR/USD may start to run into headwinds in the coming days and weeks if financial institutions think the currency pair has gained too much, and believe they should start to prepare for the current price range to remain durable. Several large risk events will take place in July and this may continue to keep the EUR/USD volatile.
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