Euro to Dollar FX Forecast: "Resistance at 1.1810 Unlikely to Come into View"

July 8, 2025 - Written by Frank Davies

STORY LINK Euro to Dollar FX Forecast: "Resistance at 1.1810 Unlikely to Come into View"

The Euro to Dollar exchange rate (EUR/USD) dipped sharply to below 1.1700 after the latest US announcements on tariffs, before rallying to 1.1750.

Risk conditions held steady while the Euro was supported by hopes that the EU could secure a limited deal with the US.

ING commented; “EUR/USD consolidation in a 1.1710-1.1830 range looks likely near term.”

According to UoB; “The rebound could extend, but after the sharp decline yesterday, any advance is likely limited to a test of 1.1780. We do not expect the next resistance at 1.1810 to come into view. On the downside, support levels are at 1.1725 and 1.1705.”

As well as trade deals, markets are still wary over the outlook for Federal Reserve independence.

Overnight, Former Governor Warsh, who is considered a leading candidate to be nominated by Trump as the next Fed Chair, strongly criticised the central bank.

He stated that there were problems with the whole committee and not just Chair Powell while there was scope for sharply lower interest rates.


Expectations that political pressure will eventually yield dividends is likely to maintain dollar vulnerability.

MUFG still has a year-end EUR/USD forecast of 1.20.

Late on Monday President Trump issued a series of tariff letters with Japan and South Korea levies set at 25%.

Markets have been on edge due to fears over a fresh slide in risk appetite amid fears over the global economy.

President Trump, however, also announced that implementation of the tariffs would be delayed until August 1st from July 9th.

This delay triggered fresh optimism that more deals would be reached.

According to MUFG; “Market participants are just viewing the letters as another shorter extension of the “reciprocal” tariff delay until 1st August or beyond to allow more time to reach deals with other trading partners.”


ING noted a different reaction to the one seen in April; “The market seems to be taking the view that nothing is final and that these letters merely mark another iteration on the journey towards a trade deal.”

It added; “For FX, it appears that investors are more likely to trade based on the broader economic impact of these measures rather than the measures themselves.”

Significantly, the EU did not receive an updated tariff letter. This boosted confidence that the EU and US would be able to reach a trade deal in the short term.

MUFG commented; “At the same time, there have encouraging signs that India and the EU are close to reaching trade deals with the US to avoid higher tariffs.”

According to Pictet head of macroeconomic research Frederik Ducrozet; "The view of the market is that it's an extension, including in some cases more talks. So that's positive."

He added; "More of the same, less bad than feared with the door still open to negotiation, I can understand why the market is taking it in a relatively benign way.

Markets will still be wary given the risk of policy U-turns.

Commonwealth Bank of Australia currency strategist Carol Kong noted; "There is still a lot of uncertainty as to where tariff rates will eventually settle and which countries will get what rates, so uncertainty about the global economy is still high and that will keep investors on edge for the time being."

She added; "This is just the start and we'll get more headlines out for sure over the coming days."

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TAGS: Euro Dollar Forecasts