EUR/USD forecast. Forex Fundamental Analysis | 21 July 2025 – ForexNews.PRO

EURUSD:

The US dollar remains the sole beneficiary of a series of upside macro surprises: June retail sales rose 0.6 % m/m, annual CPI accelerated to 3.6 %, and initial jobless claims fell to a three‑month low. The data strengthened expectations that the Federal Reserve will keep the policy range at 5.25 – 5.50 % through year‑end, lifting 10‑year Treasury yields towards 4.50 %. Against this backdrop, investors rotate into the greenback as the most liquid defensive asset, pushing EURUSD back towards the 1.16 area and making 1.1630 vulnerable to further downside.

In the eurozone, fundamentals remain soft. German inflation flat‑lined in June, while recent surveys point to stagnation in Italian and Spanish manufacturing. Uncertainty over possible 30 % US tariffs on key EU goods adds to the pressure, with a decision expected by late July. Until the trade outlook clears and the 2‑year Bund‑UST spread (‑215 bp) narrows, upside in the single currency looks limited.

A key support zone sits at 1.1530 – the level where strong corporate import demand emerged in February. A decisive break would reinforce bearish momentum and expose the March lows.

Trade idea: SELL 1.1630, SL 1.1680, TP 1.1530

Origin: FreshForex

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