The value of the EUR/USD currency pair has skyrocketed 8 consecutive days. After ten years of aggressive growth, even in the face of litigation, economic argument, and political talk down the well. The pair reached a high of 1.1754 in the last week of June, its highest since September 2021. As the North American trading week came to an end, EUR/USD was just under 1.1720, still keeping its bullish streak alive. INDEX Analysts are looking for the new bullish trend to soon see a substantial corrective pullback. Or, it may just be going through a necessary phase of consolidation before its next breakout move.
Even after reaching a peak of 1.1754, the weekly chart shows that the EUR/USD pair is overbought. On net, risk is still tilted to the upside as many uncertainties pull it in different directions. It was this bombastic, authoritarian, megaphone diplomacy that really poured gasoline on the US dollar’s sell-off fire. At the same time, Federal Reserve Chairman Jerome Powell’s comments on future monetary policy echoes helped drive the market’s shift in sentiment.
Recent Developments and Market Sentiment
As expected, the EUR/USD pair returned to the 1.1740 price area due in large part to Trump’s jawboning on the economy and tariffs. His claim that “We have no inflation. We have a tremendous economy. Hundreds of billions of dollars of tariff money is pouring in” has resonated with investors. This confidence has underpinned a surge of buying pressure on the euro against the dollar.
Additionally, Federal Reserve Chairman Jerome Powell’s testimony to Congress—complete with a dovish pivot—sent shockwaves across the currency markets. We recognize and appreciate the economic times the United States is facing right now, as laid out by Mr. That negative reading of -0.5% in the latest Q1 Gross Domestic Product (GDP) data has continued to weigh on the Greenback. Powell’s comments indicate that President Trump’s demands for a rate cut will not sway the Fed’s policies.
“I think he is a very stupid person, actually.” – Trump.
This dynamic of political rhetoric meeting convincing economic data has made for a tricky backdrop for traders. The consensus is still from the other side, being short and looking for more upward movement in the EUR/USD pair.
Support and Resistance Levels
Market participants are carefully watching this region defined by the short-term support and resistance that will decide EUR/USD’s next directional move. The old 1.1630 high, made in 2025, represents important support to the pair. Should it drop under this threshold, we may witness a retest of the 1.1500 area. On the other hand, resistance can be found at the 1.1900 level, where the pair had a previous peak between July and September 2021.
Should EUR/USD manage to break above the 1.1900 resistance, it could potentially expose the psychological threshold of 1.2000, a significant milestone for market participants. The currency pair is definitely in very bullish territory at this moment. It bounced off a bullish 20 Simple Moving Average (SMA) on Monday, breaking northward after that.
As macro and market conditions continue to change, traders are keenly watching for clues that increasing bullish exuberance might lead to a consolidation or correction. After years of stagnation, these recent trends indicate compelling positive momentum. Looking at the weekly chart, it seems to be a bit overbought and due for a potential gas pedal pullback.
Economic Indicators and Future Outlook
Economic indicators released throughout the past week have painted a discouraging picture for the US economy, which has likely influenced investor sentiment toward EUR/USD. The subsequent confirmation of Q1 GDP at -0.5% continued to raise doubts over economic growth and inflation. This alarming data has caused traders to take a step back and consider their positions and the risks ahead.
With Federal Reserve policies coming under ever-increasingly harsh scrutiny, any changes in monetary policy will be reacted to severely by market participants. Powell’s statements have emphasized that economic recovery will dictate future interest rates, and this uncertainty continues to weigh on the dollar.
Hundreds of billions of dollars in tariff revenues we otherwise wouldn’t have are flooding into the economy. Yet, questions remain regarding how this infusion of cash will ultimately affect overall economic wellbeing and currency stability moving forward. Indeed, analysts have suggested the euro may benefit from recent trends. They caution that over the long run, US monetary policy and economic performance will determine its strength against the dollar.