Original Article Credit: Written by Tim Clayton, CurrencyNews.co.uk
Original Source: https://www.currencynews.co.uk/forecast/20250725-43632_euro-to-dollar-forecast-eur-could-edge-above-1-1795.html
Title: Euro to Dollar Forecast: EUR/USD Could Push Past 1.1795 Amid Mixed Economic Signals
The EUR/USD currency pair continues to trade within a narrow range, hovering near the 1.1760 level during Thursday’s European trading session. The forex market remains attentive as both the Eurozone and the United States release a series of economic indicators. These data points are influencing investor sentiment, rate expectations, and broader foreign exchange movements.
Multiple dynamics are feeding into the EUR/USD trajectory, from central bank policy outlooks to geopolitical risks. Although there’s little immediate impact on the pair’s price on any single headline, growing evidence suggests the Euro could gain enough traction to surpass the crucial 1.1795 resistance level in the short term.
Market participants are assessing a change in interest rate expectations, advancements in economic data, and comments from monetary officials. Here is a breakdown of the factors shaping the forecast for EUR/USD in the coming days.
Euro Holds Support Amid ECB Commentary and EU Economic Data
Recent Eurozone data and European Central Bank (ECB) remarks have helped keep support solid for the Euro:
– A monetary policy statement from ECB Governor Fabio Panetta emphasized the need for caution in trimming interest rates prematurely.
– The ECB has signaled that inflation, while moderating, remains persistent in key sectors, particularly services.
– Although headline inflation rates are stabilizing near target levels, core inflationary pressures are causing concern among policymakers.
The ECB’s overall tone has prevented sharp market expectations for additional rate cuts in the immediate term. This sentiment promotes modest Euro appreciation, especially when the U.S. dollar softens.
On the macroeconomic front, the Eurozone PMI (Purchasing Managers’ Index) numbers surprised to the upside in recent releases:
– The Eurozone Composite PMI was reported at 53.1 for July, surpassing market expectations and suggesting continued expansion in the euro area economy.
– Services PMI stood at 53.5 while Manufacturing, which remains a weak point, edged up slightly to 44.0.
These figures provide a supportive undertone for the Euro. Although the manufacturing sector is still in contraction territory, the upward movement in services and the composite index suggests that the Eurozone economy has not stalled, reducing the urgency for aggressive ECB policy easing.
US Dollar Sees Volatility on Diverging Fed Views and Weakening Inflation Pressures
The US dollar has been under pressure as investors digest Federal Reserve statements and inflation developments. Despite reasonably firm growth data, inflation trends weigh on the dollar:
– Weekly initial jobless claims from the U.S. held steady at 234,000 versus the consensus estimate of 230,000, signifying a stable labor market.
– Durable goods orders came in stronger than expected, rising by 1.5 percent in June, signaling healthy corporate investment.
– However, signs indicate a deceleration in core inflation, including the PCE (Personal Consumption Expenditures) price index, a key indicator for the Fed.
Fed policymakers have delivered mixed signals regarding policy direction:
– While Chair Jerome Powell suggests caution, other Board members like Raphael Bostic lean less dovish, advocating patience in making rate cuts.
– Comments from Christopher Waller, another influential Fed governor, hinted at a possible rate cut if inflation continues to trend lower, a signal markets interpret as dovish.
This divergence fuels volatility in the U.S. Dollar Index (DXY), which, as of Thursday, remains slightly weaker compared to earlier in the week. With inflation softening and the Fed approaching its 2 percent target, reduced rate hike probabilities provide a ceiling to dollar strength.
Technical Analysis: EUR/USD Testing Resistance Near 1.1795
From a technical perspective, the EUR/USD currency pair
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