Euro to Dollar Forecast: "$1.20 Level Now Very Achievable Later in 2025"

July 2, 2025 - Written by Frank Davies

STORY LINK Euro to Dollar Forecast: "$1.20 Level Now Very Achievable Later in 2025"

The Euro to Dollar (EUR/USD) exchange rate briefly trading above 1.1800 on Wednesday, but failed to hold the gains and was also unable to take advantage of surprise US jobs data and tested support close to 1.1750.

UoB expects tough resistance; “While conditions remain overbought, there is a chance for EUR to retest the 1.1830 level before a more sustained pullback is likely. The likelihood of EUR rising above 1.1850 is not high.”

It added; “On the downside, a breach of 1.1760 (minor support is at 1.1780) would suggest EUR is not retesting the 1.1830 level.”

According to Scotiabank; “the multi-month trend is bullish and the momentum indicators have been confirming but the RSI is in overbought territory We look to near-term support in the lower 1.17s and resistance in the lower 1.18.s”

HSBC has a year-end target of 1.20 with EUR/USD hitting medium-term selling interest above this level.

US economic data, budget developments and trade policy will all be crucial elements for the short-term dollar outlook.

ING commented on the trade outlook ahead of US Administration tariff deadlines next week; “even targeted tariffs have weighed on the dollar in the past, and – setting aside US data – risks into the 9 July deadline remain skewed to the downside for the greenback.”


According to National Australia Bank strategist Rodrigo Catril; "The confirmation that this is an increase in issuance, an increase in government spending well beyond its means, is not necessarily good news for the Treasury market, and it's arguably one of the reasons the dollar's going down."

ING also noted potential risks; “Despite the Congressional Budget Office now estimating an upwardly-revised $3.3tr addition to net debt over the next decade, the reaction in Treasuries has been muted, likely cushioned by hopes of earlier Fed easing. Still, if inflation surprises on the upside, a delayed impact on US bonds cannot be ruled out.”

US ADP data recorded a 33,000 decline in private payrolls for June compared with expectations of an increase of close to 100,000 while the May increase was revised down to 29,000 from the flash reading of 37,000.

ADP chief economist Dr. Nela Richardson commented; "Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month.”

There will be caution ahead of Thursday’s US employment data as another weak release would increase pressure on the Fed.

Consensus forecasts are for an increase in non-farm payrolls of around 120,000 after a 139,000 increase for May with the unemployment rate expected to tick higher to 4.3% from 4.2%.

The US will also release the latest ISM services-sector business confidence data and the weekly jobless claims data ahead of Friday’s market holiday.


MUFG commented; “Trump’s trade tariff risks to inflation have hindered the Fed’s ability to cut rates and this means the Fed likely has more easing to do than most of the rest of G-10 central banks.”

It added; “Given the euro gains and seeing limited risk for any notable correction lower, we see the $1.20-level now as very achievable later this year.”

Bank of America strategist Alex Cohen expects a grinding dollar move lower; “We continue to watch this slower burn story of real money and a consistent selling of the dollar, particularly from European real money."

ING is more cautious; “We see markets as having leaned too far on the dovish side and expect the dollar to find support as inflation picks up.”

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TAGS: Euro Dollar Forecasts