July 11, 2025 – Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: “1.170-1.175 Area for Now”

Evidence of on-going Federal Reserve resistance to interest rate cuts has supported the dollar with markets continuing to monitor trade developments closely.

The Euro to Dollar (EUR/USD) exchange rate was unable to move above 1.1750 on Thursday and retreated to test the 1.1700 area around the US open.

According to ING; “barring major surprises in the details of the deal, EUR/USD may stay attached to the 1.170-1.175 area for now.”

UoB took a similar view; “we view any advance as part of a higher range of 1.1700/1.1755.”

According to Scotiabank; “the multi-month trend remains bullish but the EUR’s latest consolidation has delivered a considerable loss of momentum.”

It sees a slightly wider near-term range; “We see the near-term range bound between 1.1680 support and 1.1780 resistance.”

ING noted that Euro demand in derivatives markets has slowed. It added; “Should this decline prove sustainable, it would signal markets are seriously scaling back bullish views on the pair – another testament of how the dollar is not bearing the risks associated with this round of tariff announcements for now.”

There was an important trade development overnight with the US threatening 50% tariffs on Brazilian exports to the US.

There is, however, still optimism that the EU will be able to negotiate some form of framework deal over the next few days.

According to Scotiabank; “while markets may understand that these announcement are just gambits in more extended trade negotiations, the persistence with tariff action may be wearing on investor patience.”

ING takes a more positive stance on the US currency; “we could see it get to 20% from the current 14%. But how we get there matters hugely for the dollar. A gradual implementation of sector-specific tariffs should do much less damage to the dollar compared to sudden, ‘Liberation Day’-style measures. The former may ultimately result in some inflationary effect that can keep the Fed cautious for longer – a dollar positive.”

The latest US data recorded a decline in initial jobless claims to 227,000 in the latest week from a revised 232,000 previously while continuing claims edged higher to 1.97mn from 1.96mn.

The data did not indicate any further near-term labour-market deterioration.

On Wednesday, the Federal Reserve released minutes from the June policy meeting.

Two members saw scope to cut interest rates at the July policy meeting, but the majority were not convinced that inflation trends justified a near-term move.

According to MUFG; “the minutes continued to signal that “most” participants expected it likely would be appropriate to cut rates this year but they are waiting for more data to provide clarity over the impact of tariffs.”

It added; “The prospect of an even earlier rate cut later this month appears to be off the table now after the stronger than expected nonfarm payroll report for June.”

There has been a further shift in market pricing with traders now pricing in only just above a 30% chance of a September cut.

RBC Capital Markets is still positive on the Euro; “As the second-most traded currency, the euro essentially acts as the “anti-dollar,” and the currency’s appreciation this year partly reflects the extent to which the greenback has fallen.”

It added; “Having said that, there have been a number of positive developments in Europe this quarter that could strengthen the currency in coming months.”

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TAGS: Euro Dollar Forecasts

• GBP/USD trades in negative territory below 1.3550 on Friday.
• The US Dollar could preserve its strength unless risk flows return to markets.
• The technical outlook suggests that sellers look to retain control in the near term.

After closing marginally lower on Thursday, GBP/USD stays on the back foot and trades below 1.3550 in the European session on Friday. The negative shift seen in risk mood could make it difficult for the pair to stage a rebound heading into the weekend.

The US Dollar (USD) benefited from the better-than-forecast weekly Initial Jobless Claims data in the early American session on Thursday. Later in the day, US President Donald Trump’s tariff announcements caused markets to adopt a cautious stance, providing an additional boost to the USD and weighing on GBP/USD.

Trump said that they will impose 35% tariffs on Canadian imports from August 1 and added that they are planning to impose blanket levies of 15% or 20% on most trade partners. US stock index futures were last seen losing about 0.7% on the day. In case safe-haven flows dominate the action in financial markets, GBP/USD could find it hard to shake off the bearish pressure.

Meanwhile, the disappointing growth data from the UK seems to be hurting Pound Sterling on Friday. The UK’s Office for National Statistics announced that the Gross Domestic Product (GDP) contracted by 0.1% on a monthly basis in May. This reading followed the 0.3% contraction recorded in April and came in worse than the market expectation for an expansion of 0.1%.

GBP/USD Technical Analysis

GBP/USD trades near 1.3540, where the Fibonacci 23.6% retracement level of the latest uptrend and the lower limit of the ascending channel align. In case the pair falls below this level and starts using it as resistance, 1.3500 (50-day Simple Moving Average) could be seen as the next support level before 1.3465 (Fibonacci 50% retracement).

Looking north, resistance levels could be seen at 1.3570 (200-period Simple Moving Average), 1.3620 (Fibonacci 23.6% retracement) and 1.3700 (mid-point of the ascending channel).

The GBPJPY pair began forming bullish wave achieving 199.45 level, but the contradiction of the main indicators and forming an extra barrier might reduce the chances of resuming the bullish attack in the current period.

The stability of the price below the extra barrier, we will begin preferring the bearish correctional trading, which might target 198.20 level reaching 61.8%Fibonacci correction level near 197.45, forming an important support against the upcoming trading, while its success to breach the barrier and holding above it will increase the chances for achieving extra gains that might begin at 200.35 reaching 201.55.

The expected trading range for today is between 198.20 and 199.45

Trend forecast: Bearish

The GBPJPY pair began forming bullish wave achieving 199.45 level, but the contradiction of the main indicators and forming an extra barrier might reduce the chances of resuming the bullish attack in the current period.

The stability of the price below the extra barrier, we will begin preferring the bearish correctional trading, which might target 198.20 level reaching 61.8%Fibonacci correction level near 197.45, forming an important support against the upcoming trading, while its success to breach the barrier and holding above it will increase the chances for achieving extra gains that might begin at 200.35 reaching 201.55.

The expected trading range for today is between 198.20 and 199.45

Trend forecast: Bearish

• The British pound has been all over the place during the trading session here on Thursday as we continue to pay close attention to the 1.3550 level.
• As long as this area holds and maybe just a little bit below there at the 50 day EMA, I think you’re still in an uptrend.
• After all, you can see that on the chart, I have a significant up trending channel plotted and we have been in that since basically the beginning of April.

With that being the case, there is more of a steady as she goes type of attitude in this market and there’s no reason to fight the overall trend. There isn’t really a whole lot out there that’s going to change things that I can see. And it is worth noting that for quite some time, the British pound has outperformed most of its contemporaries against the US dollar even on the way down in late last year. It just fell less, so it makes sense that as the US dollar struggles, it rises quicker.

The 1.38 Level is Important

Ultimately, I do think that the 1.38 level is worth paying close attention to as it was recent resistance. If we were to break down below that 50-day EMA though, it could open up a move down to roughly 1.3350. Overall, though, if this market does start to sell off, I imagine you’re probably going to be better off buying dollars against other currencies because none of them for the most part are as strong as the British pound has been with maybe the recent exception of the euro.

So basically, you would be looking to buy dollars in short Asia, for example. Europe looks relatively strong or at least steady as she goes. And that of course translates into the British pound doing the same thing as the Euro and other European assets. With this, I remain a little bit positive, but I’m not looking for huge moves. I’m just looking for a grind higher.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.