EUR/USD Analysis: Holds Near 1.17 as Fed Cut Bets Grow – 14 August 2025

EUR/USD Analysis Summary Today

-- Overall Trend: ;Neutral with an upward bias.
-- Support Levels Today: 1.1650 – 1.1580 – 1.1500.
-- Resistance Levels Today: 1.1740 – 1.1810 – 1.1880.

EUR/USD Trading Signals:

-- Buy EUR/USD from the 1.1620 support level, with a target of 1.1800 and a stop-loss at 1.1570.
-- Sell EUR/USD from the 1.1785 resistance level, with a target of 1.1500 and a stop-loss at 1.1860.
EUR/USD Technical Analysis Today:

Amid positive but cautious momentum, the EUR/USD pair has risen to the 1.1730 resistance level, its highest in three weeks. It is now settling around 1.1700 at the start of Thursday's session, awaiting further positive momentum to close the week on a high note. According to reliable trading platforms, the euro's gains have increased as the US dollar weakened to its lowest level since late July. This was driven by US inflation data, which strengthened expectations of a Federal Reserve rate cut in September, boosting global risk appetite.

On the European side, the European Central Bank (ECB) ended its monetary easing cycle in July after eight cuts over the past year, leaving borrowing costs at their lowest since November 2022. Some analysts, however, still see the possibility of another cut before the end of the year. Eurozone GDP grew by 0.1% in the second quarter, with inflation holding steady at 2% in July.

Overall, trade risks remain, with the European Union facing 15% tariffs on many exports to the United States. On the geopolitical front, European and Ukrainian leaders are scheduled to speak with President Trump before his summit with Russian President Putin.

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Upcoming EUR/USD Trading Scenarios

Bullish Scenario: Based on the daily chart, the current upward trend for the EUR/USD pair will strengthen if the bulls break through the 1.1800 resistance with force. As mentioned, this level is crucial for stronger bullish breakouts, particularly the psychological resistance of 1.2000 in the future, should the current positive momentum continue. In this scenario, the 14-day RSI is holding around 56, moving away from the midpoint, which supports further gains before reaching overbought territory. The MACD indicator is also preparing for a slight upward turn. This scenario would be bolstered if the Russian-Ukrainian crisis is resolved this week and if trade disputes between the US, the EU, and China are settled.

Bearish Scenario: On the same daily chart, a successful break by the bears below the 1.1630 support level would threaten the current rebound. It would give the bears an opportunity to move toward deeper support levels, most notably 1.1550 and 1.1480, which would negate the current bullish outlook.

Why Has EUR/USD Risen Recently?

According to forex trading experts, the euro has risen above the 1.17 level against the US dollar, driven by increasing expectations of more aggressive Federal Reserve rate cuts. Traders are now pricing in a high probability of a rate cut in September, with some hints pointing to a significant 50 basis point move.

The July US CPI data was largely in line with expectations, reinforcing the view that the Fed can ease monetary policy without reigniting inflation. Now, Fed funds futures are pricing in 61 basis points of cuts in 2025 and 65 basis points in 2026.

During the same period, the European Central Bank is expected to make only one additional rate cut, which is shifting interest rate differentials in favor of the euro. US headline CPI rose by 0.20% in July, keeping the annual rate at 2.7%, below the 2.8% forecast. Gasoline prices fell by 2.17% month-over-month, masking a rise in core inflation.

The US core CPI rose 0.32% month-on-month, raising the annual rate to 3.1% from 3.0%.

Overall, this may be a concern for the Federal Reserve, but the gains were led by core services, including a 4.0% increase in airline fares, which added just 0.05 percentage points to the overall services index. Given the abrupt nature of the increase, economists at Pantheon Macroeconomics say the move is "no cause for concern."

Investors had feared that new tariffs on imports would increase costs for US consumers, which could have a negative impact on the economy. However, tariffs have not yet had a tangible effect on inflation, and if tariff risks remain low, investors believe the Fed has room to cut interest rates multiple times in the coming months. In response to the data, market volatility eased, US stocks rose, and the dollar fell.

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Trading Tips:

Traders recommend tracking EUR/USD gains for risk-free short trading opportunities and monitoring the factors influencing currency rates.

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