Euro to Dollar Forecast: EURUSD Looks "Overbought and Overvalued"

July 13, 2025 - Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: EURUSD Looks "Overbought and Overvalued"

The Euro to Dollar exchange rate (EUR/USD) recovered from lows at 1.1665 on Friday, but was held just below the 1.1700 level as narrow ranges prevailed.

The dollar held firm in global markets while there were no major Euro developments.

Credit Agricole commented; “EUR/USD continues to look overbought and overvalued (according to our fair value and FX positioning models) could make it vulnerable to further correction lower in the near term.”

ING expects narrow ranges may continue to prevail for now; “while near-term risks look more balanced, if anything slightly skewed to the downside, the lack of fresh data suggests the pair may remain anchored around 1.17 for now.”

UoB commented; “Although there is still no significant increase in momentum, only a breach of 1.1755 (‘strong resistance level previously at 1.1780) would indicate that the current downward risk has faded.”

It added; “Until then, if EUR were to close below 1.1660, it could potentially trigger a move to 1.1625.”

Scotiabank added; “We continue to highlight the importance of medium-term support at the 50 day MA (1.1466). We see the near-term range bound between 1.1650 support and 1.1750 resistance.”


Overnight, President Trump announced that he would impose 35% tariffs on Canadian exports to the US from August 1st.

Equities have moved lower, but the dollar has been resilient.

Scotiabank commented; “Investors may consider these threats to be largely negotiating tactics at this point.”

Commerzbank FX analyst Volkmar Baur outlined two potential scenarios. The first is that tariff announcements and trade deals trickle out.

An alternative scenario is that markets assume that Trump will back off and are then shocked when big tariff increases go into effect.

According to Baur "It makes a difference for the market. If the latter is the case, there could be considerable volatility on 1 August if Trump does not back down this time and the tariffs actually come into force. In the former case, we would probably have to wait for a significant deterioration in fundamental data before the market reacts.

He added; “I would expect a weaker US dollar in both situations. However, while things could move quite quickly at the beginning of August if there is no taco, the salami argument would suggest a gradual devaluation as soon as the fundamentals deteriorate."


MUFG also pointed to the importance of US fundamentals; “With the US economy showing resilience and the labour market still holding up, we may start to see the dollar benefitting again from yields. Our G10 FX regression models indicate scope for the US dollar to recover further. Our EUR/USD model implies a 8% over-valuation that when we back test indicates a 65% probability of a retracement lower over a 4-week period.”

RBC differentiates between the near term and longer-term trend; “In the short term, there are factors that could limit immediate USD weakness, even within the broader theme of depreciation remaining intact.”

HSBC commented on the medium-term outlook; “for EUR-USD to sustain its rally beyond our 1.20 target, we think it needs four EUR-centric factors to work in its favour. These are an acceleration in private sector credit, positive and rising real wage growth, a recovery in the inventory cycle, and policy intervention by the ECB and EU.”

It added; “For now, these elements may not be sufficiently compelling to push the EUR higher from lofty levels.”

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TAGS: Currency Predictions Euro Dollar Forecasts