Euro to Dollar Forecast: "Still Chance for EUR to Retest 1.1830"

July 4, 2025 - Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: "Still Chance for EUR to Retest 1.1830"

The Euro to Dollar exchange rate (EUR/USD) dipped sharply to just below 1.1720 in immediate reaction to the US jobs data before a recovery to 1.1760.

After a holiday on Friday, the wider dollar debate will remain in full flow with a focus on the economy, trade deals and the budget bill.

UoB commented; “Despite the pullback, upward momentum still appears to be firm, and there is still a chance for EUR to retest 1.1830. That said, any further advance is unlikely to break clearly above 1.1850.”

Scotiabank looked a slightly longer-term timeframe; “the bull trend is intact but the near-term risks lean neutral as the momentum indicators peak around overbought levels. Longer-term resistance is limited ahead of 1.19 and the mid 1.22s.

US non-farm payrolls increased 147,000 for June compared with consensus forecasts of close to 110,000 and following a revised 144,000 increase for May.

There was, however, a sharp slowdown in private-sector jobs growth with only healthcare making significant gains and the total was boosted by a strong 73,000 increase for government jobs.

The unemployment rate edged lower to 4.1% from 4.2% and below market expectations of 4.3%.


The household survey, however, reported only a small increase in the number of people employed with a further jump in the number of people not in the labour force.

This metric has increased by close to 3 million over the past year which indicates strong shifts in labour-market dynamics.

The data, however, will not provide any fresh ammunition for those backing a near-term cut in interest rates.

Following the data, markets priced out the possibility of a July rate cut with the chances of a September move declining to just below 80%.

ING commented; “A stronger-than-expected June jobs report indicates no Federal Reserve rate cut before September despite the President’s demands. Nonetheless, households are becoming more pessimistic on employment prospects with the risk of layoffs rising in the second half of the year.”

Rabobank is still uneasy over the dollar outlook; “Crucially, if any replacement for Powell was judged to be at risk of medium-term inflation stability by cutting rates too fast and too soon, the USD could be faced with a steeper decline.”

Rabobank maintains a 12-month EUR/USD target of 1.20.


As far as fiscal policy is concerned, Senate Democrats have delayed a full vote on the budget bill, but the Republican leadership is confident that it can get the legislation passed.

Trade developments will also be important ahead of next week’s deadline. The US and Vietnam agreed a trade deal on Wednesday.

President Trump stated that Vietnamese goods would face a 20% tariff while trans-shipments from third countries through Vietnam will face a 40% levy.

Saxo strategist Charu Chanana commented; "What's important to watch now is how China responds, given that the move directly targets trans-shipped goods at a higher 40% tariff rate."

Commerzbank noted that many imports such as coffee cannot be substituted and added; “Therefore, the conclusion remains the same: import tariffs, even if they are no longer absurdly high, are likely to do more harm than good. Especially since the Vietnamese economy is hardly large enough and does not have the necessary purchasing power to significantly increase its imports from the US.

It added; “And so it is not surprising that the dollar was unable to benefit from yesterday's news of the deal."

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TAGS: Euro Dollar Forecasts