Euro to Dollar Price Forecast: "Recent Bear Reversal is Worrisome"

July 18, 2025 - Written by Tim Boyer

STORY LINK Euro to Dollar Price Forecast: "Recent Bear Reversal is Worrisome"

The US Dollar recovered quickly from reflex selling on Wednesday following reports that Trump was on the point of sacking Fed Chair Powell and posted net gains after a batch of stronger than expected data on Thursday.

Strong data will tend to galvanise Fed resistance to rate cuts, but this would risk further criticism from the US administration.

The Euro to Dollar retreated to 1.1575 after the US open and close to 3-week lows before nudging higher.

UoB commented; “The EUR weakness appears to have stabilised, and for the time being, it is likely to consolidate in a range of 1.1550/1.1720. That said, after this phase of consolidation, a move below the range appears more likely than a break above.”

According to Scotiabank; “the recent bear reversal is worrisome and is threatening the multi-month bull trend from February. We continue to highlight the importance of the 50 day MA (1.1492) and see near-term support closer to 1.1550.

Key EUR/USD support is likely to be in the 1.15 area.

Around Wednesday’s European close, the dollar posted sharp losses following reports that President Trump was on the point of sacking Federal Reserve Chair Powell.


EUR/USD surged to highs above 1.1700 before retreating quickly as Trump denied the reports.

According to Trump, "I don't rule out anything, but I think it's highly unlikely unless he has to leave for fraud."

In this context, markets will be monitoring the proposed investigation into the Fed renovation programme. Inevitably, there will be further speculation that any cost overruns will be used as a pretext to dismiss Powell.

ANZ head of foreign exchange research Mahjabeen Zaman, commented; "If that comes to fruition, you're going to see a much weaker dollar than we're already expecting,"

He added; "Such an event, if that even does happen, it will raise questions for Fed independence and credibility, so I think it's only going to be an increase in volatility."

MUFG expects further underlying concerns; “The question now is whether Trump and his supporters drop this idea or keep it in the markets’ focus and push it further. We suspect this theme isn’t going to go away and could escalate further and threatens a further hit to confidence in US assets and the dollar. For now Trump’s denials have helped prompt a retracement – but for how long?”

ING took a slightly different view; “It’s a clear symptom of the resistance developed by markets for the rollercoaster of headlines that have characterised Trump’s term so far. After yesterday’s scare, the bar will be even higher to take Fed independence threats seriously.”


US Retail sales increased 0.6% for June compared with consensus forecasts of a 0.1% increase.

The Philadelphia Fed index also strengthened sharply to 15.9 for July from -4.0 previously and well above market expectations of -1.0.

Companies reported higher cost pressures and, although confidence in the outlook increased slightly, there were expecting stronger increases in both prices paid and received.

This is not the sort of data that would convince Federal Reserve members to cut interest rates.

Markets will also continue to monitor US-EU trade negotiations ahead of the August 1st deadline when Trump has threatened to impose 30% tariffs on EU imports.

HSBC commented; “While we agree with the market that the most likely outcome is a negotiated settlement that at least provides a framework EU-US agreement, we suspect the market is underplaying the likelihood of a tit-for-tat escalation in a complex situation.”

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TAGS: Euro Dollar Forecasts