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19
08, 2025
Euro to US Dollar Forecast: EUR/USD Extending Consolidation
– Written by
James Fuller
STORY LINK Euro to US Dollar Forecast: EUR/USD Extending Consolidation
The Euro to US Dollar exchange rate (EUR/USD) was unable to hold above the 1.1700 level on Monday and retreated to near 1.1670.
Dollar sentiment remains weak, but traders are reluctant to extend long Euro positions, especially with major geopolitical uncertainties surrounding Ukraine.
European natural gas prices dipped sharply on Monday, which will provide underlying Euro support.
Markets will be watching developments in Ukraine closely, with scheduled talks between Ukrainian President Zelensky and US President Trump.
Several European heads of state will also be present, with a key focus on whether details can be provided on providing security guarantees for Ukraine.
According to ING; “Any further clarification of this situation today could be welcomed by markets, even though the issue of territory seems intractable.”
UoB commented on EUR/USD; “The recent price action, where the buildup in momentum failed to translate into a clear trending move, has resulted in a mixed outlook. For the time being, we expect EUR to trade a in range, likely between 1.1630 and 1.1755.”
According to Scotiabank; “The multi-month bull trend is intact, and we await a break of the upper-1.17 resistance area. We look to a near-term range bound between 1.1650 and 1.1750.”
As well as geo-political developments, markets will also be watching the Federal Reserve very closely with a key summit from Thursday-Saturday.
Danske Bank noted; “the Jackson Hole Economic Symposium later this week with potential policy signals from Powell, given recent data, could prove pivotal for the near-term trajectory of EUR/USD. We continue to prefer fading short-term USD rallies and remain strategically bullish on EUR/USD.”
It has a 12-month forecast of 1.23.
Scotiabank commented; “With many uncertainties to be resolved for policymakers, it’s not clear that Powell will feel he is able to provide as much certainty on the policy outlook this time round, however.”
According to MUFG; “At this month’s Jackson Hole Economic Symposium market participants will be listening closely to see if Chair Powell validates pricing for rate cuts to resume next month.”
The bank also expressed an element of caution; “The risk is that Chair Powell refrains from providing a clear signal over the timing of the next rate cut giving the Fed more time to continue assessing incoming data before the September FOMC meeting. It could help to dampen downward pressure on the US dollar in the near-term.”
Scotiabank overall remains bearish on the dollar; “We remain negative on the longer run outlook for the USD (the Fed will—eventually—ease even as inflation is likely to remain sticky, US growth momentum will slow, fiscal policy is unsustainable) but more range trading is likely in the short run.”
ING commented; “EUR/USD should stay gently bid in a 1.1650-1.1750 range through the early part of the week, but could make a run at the 1.1830 should Powell prove sufficiently dovish on Friday.”
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TAGS: Euro Dollar Forecasts
