Euro to Dollar FX Forecast: Trend Bullish Despite Modest Pullback

June 19, 2025 - Written by David Woodsmith

STORY LINK Euro to Dollar FX Forecast: Trend Bullish Despite Modest Pullback

The Euro to Dollar exchange rate (EUR/USD) dipped to 1-week lows just below 1.1480 on Tuesday amid a revival in dollar demand amid a fresh surge in oil prices.

The dollar still hit selling interest on rallies with EUR/USD back above 1.15 on Wednesday.

Markets are having to deal with geo-political stresses, structural dollar concerns and the Federal Reserve policy decision.

According to Scotiabank; “the trend is bullish, despite Tuesday’s modest pullback. The momentum continues to confirm the trend and the 50 day MA (1.1353) remains an important level of medium-term support. We look to near-term support around 1.1450 and near-term resistance above 1.1600.”

UoB noted; “a breach of 1.1480 would suggest EUR may trade in a range instead of rising further.”

ING commented; “while the dollar may indeed regain some near-term momentum, we don’t think this will be enough to take EUR/USD sustainably back to the 1.12-1.13 area. Our near-term target remains 1.14 for the pair.”

MUFG noted the risk of relatively dovish Fed rhetoric on Wednesday, but added; “The appetite to sell the dollar though will likely be muted for now until there is a clearer outlook on the Israel/Iran conflict over the coming days.”


Middle East tensions will be monitored very closely given speculation that the US will engage in the conflict by bombing Iranian underground nuclear facilities.

ING commented; “Yesterday’s USD jump was likely exacerbated by some positioning squeeze, and triggered by another leg higher in oil prices as Israel intensified its strikes on Tehran, and speculation about the US joining the attack flared up. Should such speculation prove correct, the upside risks for oil could increase further, opening up fresh upside room for the dollar.”

Higher oil prices tend to be negative for the Euro and traders will also be monitoring European gas prices closely after six successive daily gains.

According to Commerzbank; “A move above USD 90 per barrel (bbl) would constitute an Oil price shock.”

There are very strong expectations that the Federal Reserve will hold interest rates at 4.50% at the latest policy meeting.

There will be new forecasts for growth and inflation as well as the updated projections of interest rates by committee members.

According to ABN Amro there will be notable changes in forecasts; “The projections will show significantly higher inflation forecasts, higher unemployment, and lower growth compared to the March forecasts."


The latest interest rate forecasts from committee members will also be important with speculation that there will be one rate cut compared with the two forecast previously.

Guidance from Chair Powell will also be a key element.

MUFG commented; “Given the uncertainties it will be difficult for Powell to provide strong guidance although we suspect that the overall tone of his comments could well be interpreted as more on the dovish side given actual inflation and actual labour market data have been softer than expected.”

Markets will also be monitoring rhetoric from President Trump following the decision, especially as there is likely to be strong criticism of the move.

Commerzbank commented; “A somewhat stronger reaction could be expected if the Fed were to forecast only one cut for 2025, especially as this would be a declaration of war on the US government's vehement calls for cuts.”

According to Scotiabank; “Speculation that President Trump could announce Chair Powell’s replacement soon, to act as a “shadow chair”, seems to be a risk that markets are embracing.”

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TAGS: Currency Predictions Euro Dollar Forecasts