EUR/USD Analysis: Cautious Anticipation for Federal Reserve Announcement – 18 June 2025

EUR/USD Analysis Summary Today

-- Overall Trend: Bullish.
-- Today's EUR/USD Support Levels: 1.1470 – 1.1400 – 1.1320.
-- Today's EUR/USD Resistance Levels: 1.1580 – 1.1660 – 1.1730.

EUR/USD Trading Signals:

-- Buy EUR/USD from the support level of 1.1385 with a target of 1.1560 and a stop-loss at 1.1290.
-- Sell EUR/USD from the resistance level of 1.1640 with a target of 1.1400 and a stop-loss at 1.1710.
EUR/USD Technical Analysis Today:

Euro bulls are attempting to find additional positive momentum to resume their upward rebound at the start of this week's trading. The currency pair jumped towards the 1.1615 resistance level, near its 43-month high, before experiencing selling pressure that pushed it towards the 1.1474 support level, settling around 1.1520 at the time of writing this analysis. According to performance across reliable trading platforms, the US Dollar has not found sustained support in global markets, with selling occurring at price rallies despite ongoing tensions in the Middle East. At the start of this week's trading, oil prices declined, while stock markets achieved net gains.

Given the multitude of local and global risks, trading volatility is inevitable, and any escalation in the Middle East would signal a significant move in forex markets. Commenting on currency price performance, ING Bank stated: "The US Dollar's rebound since the start of Israeli-Iranian attacks has been relatively limited, and it is now largely in decline. This is despite no indications of de-escalation in the region and continued support for oil prices. In our opinion, this once again indicates the market's lack of confidence in the Dollar at the moment."

However, the bank also noted that the EUR/USD pair is significantly overvalued, limiting opportunities for further gains; the short-term fair value is slightly below 1.110 according to their model, and a move above 1.1640 would push the pair beyond the triple standard deviation upper limit.

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Trading Tips:

The EUR/USD trend remains upward, but it may face some volatility from the US Federal Reserve's policy announcement today, in addition to the extent of investor risk aversion. Exercise caution.

In general, financial markets will continue to monitor Middle East developments in the short term as Israel and Iran continue to exchange military strikes. According to experts, there are concerns about the risk of a significant escalation, such as the closure of the main oil transit route through the Strait of Hormuz. A closure of the Strait of Hormuz would disrupt up to a third of global oil supplies, which analysts estimate could lead to crude oil prices rising to between $120 and $150 per barrel. The closure of the Strait would also impede natural gas flows from Qatar to Europe, exacerbating the negative terms of trade shock suffered by the EU energy sector, while providing a strong boost to alternative suppliers, the United States and Australia.

Therefore, this development would pose significant downside risks to the Euro.

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Today's EUR/USD Technical Levels:

Based on the daily chart performance, the overall outlook for the EUR/USD pair remains bullish so far. The trend will not be broken without the bears successfully pushing the currency pair to the vicinity of the 1.1370 and 1.1250 support levels, respectively. Currently, the 14-day RSI (Relative Strength Index) is in neutral territory and awaits further momentum for confirmation of an upward move. Conversely, the MACD (Moving Average Convergence Divergence) indicator is strongly trending upward. On the upside, a break of the 1.1630 resistance is important for further strengthening of bullish control over the EUR/USD trend.

Currency Markets Await Federal Reserve Announcement:

The US Federal Reserve will announce its latest interest rate decision today, Wednesday, at 9:00 PM Egypt time, with strong expectations of keeping rates at 4.50%. Before that, at 12:00 PM Egypt time, Eurozone inflation figures will be announced, which in turn will influence future expectations for European Central Bank policies. Overall, the Federal Reserve's guidance and updated economic projections, including interest rate forecasts, will also be important for US Dollar sentiment. The updated projections from the Federal Reserve will inevitably be a key factor. In the previous update in March, the median forecast was for two rate cuts in 2025, with two more in 2026. According to experts, if the Federal Reserve keeps the US interest rate accommodative as expected, the US Dollar is likely to resume its decline due to deteriorating underlying conditions in the United States.

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Original Source DailyForex.com provides daily fundamental and technical analysis and signals for those looking to trade based on trends in the currency markets.