Euro to Dollar Forecast: EUR Could Edge Above 1.1795

July 25, 2025 - Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: EUR Could Edge Above 1.1795

The Euro to Dollar (EUR/USD) exchange rate hit 2-week highs at 1.1780 in early Europe on Thursday. There was a retreat to around 1.1740 in immediate reaction to the ECB policy decision, but there was no sustained damage and it returned to near 1.1780 as the dollar failed to hold gains.

UoB sees the potential for a fresh advance; “While negative divergence is starting to form, EUR could edge above the 1.1795 level before a pullback can be expected.

The bank does not, however, expect EUR/USD to reach fresh 45-month highs; “Given the negative divergence, the major resistance at 1.1830 is likely out of reach for now. On the downside, the two support levels to watch are 1.1755 and 1.1735.”

According to Scotiabank, the outlook is positive, but added; “We look to a near-term range bound between support at 1.1700 and resistance at 1.1800.”

Any break above 1.1830 would trigger renewed speculation over a quick move to 1.20.

The ECB held interest rates steady at the latest policy meeting with the deposit rate held at 2.00% which was in line with strong consensus forecasts.

According to the central bank, information is broadly in line with the previous inflation assessment.


It stated that the economy has been resilient, but the outlook is exceptionally uncertain.

The central bank added that it would follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.

Markets were also continuing to watch trade developments closely as the August 1st deadline for reaching a US-EU trade deal draws eve closer.

Following the US-Japan deal over the weekend, there was increased chatter that there would be a near-term deal.

There has been speculation that the EU would accept a 15% tariff on most goods

Commerzbank commented; “After all the turmoil of recent months, such a deal would certainly bode well for the euro, which is why we saw EUR/USD move back towards 1.18 yesterday."

The bank still points to a high degree of uncertainty and noted; “It should not be forgotten that the EU is one of the US president's favourite bogeymen, and that a deal such as the one currently being discussed would not be too bad for the EU — at least compared to the other scenarios discussed in recent months.”


It added; “Therefore, we could be in for some exciting twists and turns in the coming days until a deal is finally announced."

The US business confidence data was mixed as the PMI manufacturing index dipped to a 7-month low of 49.5 for July from 52.9 previously and below consensus forecasts of 52.7.

The services-sector index, however, increased strongly to a 7-month high of 55.2 from 52.9 which was above expectations of 53.0.

There was further upward pressure on costs with the second-highest reading since January 2023 while output charges increased at the second-highest rate since September 2022.

The inflation data will cause unease within the Federal Reserve. Importantly, the inflation data will tend to mean that Administration pressure for lower interest rates will tend to have a larger negative impact on the US currency.

Scotiabank is still bearish on the US currency; “We remain negative on the outlook for the USD in the medium term and think that the gains seen through the first half of July have likely run their course. The technical bear trend remains intact and trend dynamics are strengthening again after the early July consolidation.”

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TAGS: Euro Dollar Forecasts