EUR/USD Jumps to 1.1668: Bank of America Expects Further Gains to 1.17 by End of 2025
Original article by Skerdian Meta, FXLeaders
The EUR/USD currency pair has witnessed a significant upward breakout, hitting a new multi-month high of 1.1668. This rising momentum has attracted considerable attention across the forex trading community, not just for the strength of the move, but also for the increasing optimism building around the euro in general. On the back of this development, analysts at Bank of America (BofA) have projected a further rally in the pair, aiming for a 1.17 target by the end of 2025.
Let’s take a deeper look at the factors driving this upward surge, what technical and fundamental signals are contributing to the euro’s current bullish trend, and why institutions such as Bank of America believe there is more room for growth in the months ahead.
Key Milestone: EUR/USD Reaches 1.1668
The breakout in EUR/USD to 1.1668 marks a significant moment in the currency pair’s trajectory. This is the highest level it has reached in several months, and represents the result of a combination of supportive macroeconomic data, central bank expectations, and market sentiment that have shifted in favor of the euro.
Several interlinked factors can help explain the current uptrend, including:
– A weakening US dollar due to cooling inflation and speculation of interest rate cuts by the Federal Reserve
– Improved economic performance in the Eurozone
– Hawkish tones from European Central Bank (ECB) officials who warn against easing too quickly
– Technical breakouts that have triggered bullish momentum in the markets
Market Reaction and Technical Analysis
From a technical point of view, the rally in EUR/USD above the 1.1600 resistance level—with a high print of 1.1668—suggests that a major reversal pattern is shaping up on the broader chart. Traders and technical analysts are closely watching key levels that may serve as support or resistance in the coming days and weeks.
Current technical indicators highlight the following:
– The 1.1600 level has now flipped from resistance to support
– 1.1700 remains a psychological resistance level; a stable break above may open the door to further upside
– Moving averages, especially the 100-day and 200-day simple moving averages, are reinforcing the bullish momentum as the euro trades above these trend lines
– The Relative Strength Index (RSI) remains near overbought territory, signaling strong bullish interest while also raising caution for potential profit-taking
Fundamental Drivers Behind the Breakout
The fundamental backdrop has shifted significantly since the beginning of 2025, enhancing the overall outlook for the euro while putting downward pressure on the US dollar.
The key macroeconomic and policy-related factors influencing the pair include:
1. Federal Reserve Policy Outlook
– Market expectations for the Fed to cut interest rates in the second half of 2025 continue to gain momentum, especially amid signs of slowing inflation and lower-than-expected labor market strength
– The CME FedWatch Tool shows expectations of at least two rate cuts before the end of the year
– This dovish outlook is lowering the appeal of the US dollar among investors
2. European Central Bank Stance
– Although the ECB has also hinted at eventual easing, its tone has remained more hawkish relative to the Fed
– ECB officials have expressed caution over easing too early, citing inflation risks and the need for sustained economic growth
– This contrast in central bank approaches is helping to support the euro
3. Eurozone Economic Data
– Germany and France, the two largest economies in the euro bloc, have released stronger-than-expected GDP and PMI data throughout Q2 and Q3 of this year
– Consumer confidence has also improved in the eurozone, adding another layer of support
4. Global Risk Sent
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