Top.Mail.Ru
empty
25.06.2025 07:03 PM
EUR/USD. Pushing the Limits: Buyers Target the 1.1630 Resistance Level

For the second day in a row, the EUR/USD pair is testing the 1.16 level, pressing against the 1.1630 resistance level (the upper line of the Bollinger Bands indicator on the D1 timeframe). Geopolitical developments and comments from Jerome Powell, who spoke yesterday before the U.S. House of Representatives, have played into the hands of EUR/USD bulls. Additionally, PMI and IFO indices supported the euro by reinforcing expectations that the European Central Bank will adopt a wait-and-see approach starting with the July meeting.

This image is no longer relevant

Let's begin with geopolitics. It seems that the 12-day war between Israel and Iran has finally come to an end. Although both sides continued to accuse each other of violating the ceasefire yesterday, the situation stabilized shortly afterward. Media and social networks remain divided on whether the operation was worth it and if the declared goals were achieved. However, such debates no longer concern EUR/USD traders — on the currency market, the key point is that the ceasefire is holding. Yesterday, the U.S. President expressed strong frustration (even cursing live on air) over the continued exchange of strikes after the ceasefire had been announced. Nonetheless, by the second half of the day, both Iran and Israel stated they were prepared to observe the ceasefire, and genuine silence followed. Whether this peace will last is, as they say, a rhetorical question. But for now, the situation is favoring EUR/USD buyers amid increased demand for risk assets.

Meanwhile, the dollar came under pressure yesterday in response to Federal Reserve Chair Jerome Powell's speech before the House of Representatives (his second appearance is scheduled today in the Senate). Essentially, Powell reiterated the main points expressed after the June FOMC meeting. The key message was that the Fed will not rush to cut interest rates, as the regulator needs time to assess the inflationary impact of the newly imposed tariffs. According to him, the effect could be either persistent or short-lived. At the same time, Powell declined to confirm the Fed's median forecast (dot plot), which suggests two rate cuts by year-end. He emphasized that "everything will depend on the state of the economy," noting that lower inflation readings and a cooling labor market would support "an earlier rate cut."

In theory, such rhetoric should have supported the greenback, since Powell essentially indicated that a wait-and-see approach might persist through the end of the year, contrary to the above-mentioned dot plot. However, the dollar reacted negatively, as Powell also acknowledged the potential for stagflation, stating that the tariff hikes "will lead to rising prices and negatively affect economic activity."

These remarks came alongside the release of weak Conference Board consumer confidence data, which landed in negative territory. After a surprise increase in May (to 98.4), analysts had forecast further growth in June — up to 99.4. Instead, the index dropped sharply to 93.0.

Following this release, the dollar came under additional pressure.

Meanwhile, the euro was supported by PMI and IFO indicators, helping EUR/USD buyers maintain upward momentum. Specifically, Germany's manufacturing PMI exceeded expectations, rising to 49.0. The German services PMI also approached the 50.0 threshold, climbing to 49.4. The euro area services PMI even returned to expansion territory, reaching 50.0.

Germany's IFO Business Climate Index increased for the sixth consecutive month, rising in June to 88.4 — the highest since June of last year. The IFO Expectations Index rose for the second month in a row, jumping to 90.7 — a peak not seen since April 2023.

The overall fundamental backdrop enables EUR/USD buyers to challenge the 1.16 level and test the 1.1630 resistance level. However, for the price to break higher on a sustainable basis, a strong news catalyst is needed — for example, a sharp slowdown in the core PCE index (due Friday, June 27), or a significant downward revision of U.S. Q1 GDP data (final estimate due tomorrow, June 26). Without a powerful trigger, the 1.1630 level is unlikely to be breached.

Technical Outlook: On the daily chart, EUR/USD remains positioned between the middle and upper lines of the Bollinger Bands indicator and above all lines of the Ichimoku indicator, which has formed a bullish "Line Parade" signal. A similar setup is visible on the weekly chart. All of this supports a preference for long positions. Corrective pullbacks should be used to open longs, with the first and, for now, only target at 1.1630 (the upper Bollinger Bands line on D1). The next price barrier lies at 1.1700 (upper Bollinger Bands line on W1). However, to break through this level, EUR/USD buyers will need a compelling news driver to consolidate above the 1.1630 target and open the path toward the 1.17 level.

Irina Manzenko,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Irina Manzenko
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Chancy Deposit
    Deposit your account with $3,000 and get $4000 more!
    In July we raffle $4000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST

Recommended Stories

USD/CAD – Analysis and Forecast

Today, USD/CAD extended its gains for the fourth consecutive day, supported by steady buying interest in the U.S. dollar. Additionally, a slight decline in crude oil prices is weighing

Irina Yanina 18:04 2025-07-29 UTC+2

XAU/USD – Analysis and Forecast

Over the weekend, a trade agreement was reached between the United States and the European Union, which added to the optimism sparked by the recent U.S.–Japan deal and eased fears

Irina Yanina 17:59 2025-07-29 UTC+2

FOMC Meeting Comes into Focus (Potential for Continued Decline in EUR/USD and GBP/USD)

While market participants continue to assess the real prospects of a U.S. "takeover" of Europe and its economy, believing that any certainty is better than none, attention is shifting toward

Pati Gani 10:44 2025-07-29 UTC+2

Why EUR drops sharply?

The euro plunged by more than 1% after the EU and the US reached a trade agreement, one that, apparently, not everyone agrees with. European leaders are divided. Some supported

Jakub Novak 10:34 2025-07-29 UTC+2

The Market Is Losing Its Risk Premium

The devil is in the details. The muted reaction of the S&P 500 to arguably Donald Trump's most monumental trade deal speaks volumes. Some believe the market had anticipated

Marek Petkovich 09:26 2025-07-29 UTC+2

What to Pay Attention to on July 29? A Breakdown of Fundamental Events for Beginners

There are, frankly, very few macroeconomic reports scheduled for Tuesday, and traders' minds are not focused on counting the number of job openings in the U.S. On Monday, Donald Trump

Paolo Greco 07:13 2025-07-29 UTC+2

GBP/USD Overview – July 29: The U.S. Dollar Finally Starts to Trust Trump

The GBP/USD currency pair continued to decline on Monday. The British pound began its downward movement last week, and at that time, we concluded that purely technical factors were behind

Paolo Greco 03:44 2025-07-29 UTC+2

EUR/USD Overview – July 29: A Complete Failure for the European Union

On the 4-hour timeframe, the EUR/USD currency pair sharply reversed downward on Monday and posted a strong decline. In our opinion, this move is quite significant and telling. Let's examine

Paolo Greco 03:44 2025-07-29 UTC+2

EU–US Trade Deal. Part 2

On Monday, I got the impression that very few people in Europe knew what concessions von der Leyen was about to make. The American side of the negotiation was likely

Chin Zhao 00:45 2025-07-29 UTC+2

EU–US Trade Deal. Part 1

Four days before August 1 — the final deadline for the negotiations — the European Union and the United States announced the signing of a trade agreement. This deal

Chin Zhao 00:45 2025-07-29 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.