EUR/USD Technical Forecast: Insights from July 17, 2025
Original analysis by: Christopher Lewis (DailyForex)
The EUR/USD currency pair displayed a notable pullback during the trading session on Wednesday, July 17, 2025, as the US dollar regained some strength, reversing several days of weakness. Market participants showed a shift in sentiment due to several technical and macroeconomic indicators aligning in favor of the dollar, thereby putting pressure on the euro. With price dynamics revolving near key psychological and technical levels, traders are now closely watching for a potential continuation or reversal of trends in the near term.
This detailed outlook explores the recent EUR/USD behavior, relevant technical indicators, and prevailing market sentiment, offering traders insight into possible future price movements.
Overview of Recent Price Action
– As of July 17, EUR/USD showed a decline that erased some of the gains seen earlier in the week.
– The currency pair attempted to push higher in recent days but found resistance near the 1.0900–1.0950 level.
– Wednesday’s pullback highlighted the strength of the US dollar, likely driven by expectations surrounding US economic data and future interest rate policy.
Support and Resistance Zones
– Major Support: 1.08 — This level previously acted as a springboard for bullish movements. Price action near this level has historically seen a high volume of buying interest, which may now emerge once again if EUR/USD continues the downtrend.
– Additional Support: 1.07 — Viewed as a crucial inflection point, this level could come into focus if the 1.08 support fails to hold. Below 1.07, the next key support could be around the 1.06 level.
– Immediate Resistance: 1.09 — This resistance proved difficult for the pair to break earlier in the week, indicating that sellers are active at this point.
– Major Resistance: 1.10 — A psychologically significant level. It also coincides with the top of recent price rallies, reinforcing its importance.
Technical Indicators and Moving Averages
Moving Averages:
– 50-Day EMA: Acting as dynamic support, the 50-day exponential moving average (EMA) remains pivotal. Currently, the price hovers near the 50-day EMA, and the market reacting to this level may determine the near-future direction of the pair.
– 200-Day EMA: This longer-term indicator lies below the current market price, confirming that there is still some long-term bullish bias, although its slope has started to flatten, suggesting potential consolidation or trend fatigue.
Relative Strength Index (RSI):
– The RSI currently sits in the middle of its range, around 50. This suggests a lack of momentum either way, and the market could swing in response to upcoming fundamental triggers. A move above 60 could point toward renewed bullish momentum, while a drop below 40 may reflect increasing bearish pressure.
MACD (Moving Average Convergence Divergence):
– The MACD histogram shows signs of waning bullish momentum. While not negative yet, the contraction in MACD bars implies a slowing of upward momentum, which aligns with the latest price pullback.
Fundamental Backdrop Supporting the Dollar
Several macroeconomic factors bolster the US dollar, contributing to the recent EUR/USD retreat. Here’s what traders should consider:
– Federal Reserve Policy: Market expectations reflect a possible delay in rate cuts by the US Federal Reserve. Strong employment and inflation data from the US have led investors to believe the Fed may keep rates higher for longer. This stance tends to favor the dollar.
– Economic Performance: The US economy continues to outperform its European counterpart. Robust consumer spending, a resilient labor market, and stable inflation have all contributed to dollar strength.
– Eurozone Growth Concerns: In contrast to the US, the Eurozone has been dealing with sluggish growth. Soft inflation data, deteriorating industrial production, and weak PMI numbers have put additional pressure on the euro.
Geopolitical Factors
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