Original Author Credit: Economies.com
Title: In-Depth Forecast Update for EUR/USD – July 23, 2025
The EUR/USD pair continues to exhibit wide-ranging movements, currently shaped by both technical patterns and macroeconomic forces. As of July 23, 2025, the pair displays a consolidative structure below key resistance levels, reflecting indecision in the broader market while awaiting clarity from upcoming economic data. Today’s analysis offers a comprehensive outlook into the pair’s short- and medium-term trajectory.
Technical Overview
The EUR/USD pair is hovering near the 1.1115 level in early European trading. This region has been tested several times over the past sessions, establishing it as an important point of resistance. Price movements suggest the pair is attempting to break out from a symmetrical triangle formation seen on the four-hour chart. This type of consolidation often precedes significant directional moves.
Key Technical Highlights
– Price is fluctuating within a symmetrical triangle formation, indicating a likely breakout in either direction soon.
– Immediate resistance is found at 1.1135, a level that has capped gains in earlier sessions.
– Critical support lies near 1.1065, which aligns with the lower boundary of the triangle pattern.
– RSI indicators are near neutral at 51, suggesting neither overbought nor oversold conditions.
– The 50-period Simple Moving Average (SMA) on the 4-hour chart is offering tentative support around the 1.1080 region.
Trend Implications:
– Bullish scenario: A confirmed breakout above 1.1135 would likely drive the pair toward the next resistance at 1.1185. This level coincides with previous swing highs and may form the next ceiling if momentum confirms the move.
– Bearish scenario: A downward break below 1.1065 could lead to increased selling pressure, dragging the pair toward the 1.1025 support area. Sustained bearish pressure beneath this level could extend losses toward the more significant 1.0970 level.
Fundamental Influences
Beyond the charts, the EUR/USD is deeply influenced by diverging economic policies and outlooks between the European Central Bank (ECB) and the U.S. Federal Reserve. These institutional positions shape investor risk perception, interest rate expectations, and ultimately, currency valuation.
European Central Bank Positioning
– In its July policy meeting, the ECB opted to maintain key interest rates unchanged, noting modest disinflation progress across the euro area.
– ECB President Christine Lagarde highlighted a need for continued data-dependence, noting recent softening in core inflation but warning against premature easing.
– Labor market strength remains a concern for the ECB, as robust wage growth could reignite price pressures later in the year.
– Markets are currently pricing in one 25-basis point cut by year-end, though the timing remains uncertain.
U.S. Federal Reserve Outlook
– The Federal Reserve remains more hawkish in tone, emphasizing resilience in both inflation and labor data. June’s CPI figures showed a slight decline in headline inflation, but core numbers remain elevated above the 2 percent target.
– Fed Chair Jerome Powell reiterated the Fed’s data-dependence stance, but with fewer signs of dovish pivoting when compared to the ECB.
– The next FOMC meeting, scheduled for August, could provide clearer clues regarding the timing of future rate adjustments. As of now, probability for a rate cut in September has dwindled below 40 percent.
Economic Data Watch
The EUR/USD’s trajectory in the coming days will depend largely on several high-impact economic data releases.
Europe:
– Preliminary July Manufacturing and Services PMI figures are due on July 24. The last reading indicated contraction in the manufacturing sector, and markets will be watching for signs of recovery or further retreat.
– Germany’s Ifo Business Climate Index, also scheduled for release this week, will provide insights into corporate sentiment in the eurozone’s largest economy.
United States:
– U.S
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