Key Takeaways
• EUR/USD has fallen from around 1.16500 in early June to near 1.13900, touching lows around 1.13225.
• The decline marks the pair's weakest levels since May 2025.
• Initial hawkish expectations around new Fed Chair Kevin Warsh have since softened, but the dollar has remained broadly supported.
• The near-term forecast range is 1.13400 to 1.15600, with 1.14000 seen as a key resistance level
A Stark Two-Month Downturn
EUR/USD has posted one of its sharpest declines in over a year, sliding from around 1.16500 at the start of June to roughly 1.13900 by month-end — a drop that briefly took the pair to 1.13225, its lowest level since May 2025. The move has been driven primarily by broad US dollar strength rather than any single euro-specific catalyst.
What's Been Driving the Dollar
Markets initially priced in a hawkish stance from new Fed Chair Kevin Warsh, though that view has since softened as data suggested he isn't eager to raise rates immediately. Even so, the dollar has stayed broadly supported, helped by the perception that the European Central Bank may now be relatively more hawkish than the Fed in the near term — an unusual dynamic that has nonetheless failed to lift the euro meaningfully.
Signs of Stabilisation
After the sharp slide, EUR/USD has shown tentative signs of steadying, with analysts pointing to oversold conditions on shorter-term charts. The speculative trading range for the pair is currently estimated at 1.13400 to 1.15600, with the 1.14000 level flagged as the critical resistance that needs to be reclaimed and held before a more convincing recovery can be trusted.
What to Watch Next
Falling energy prices — Brent crude is down to around $72 a barrel — could help ease the inflation pressure that has been a key input into the Fed's more hawkish recent tone, potentially giving the euro some breathing room. This week's Fed decision on July 29 is likely to be the next major catalyst: a hawkish hold would probably extend dollar strength, while any dovish surprise could accelerate a EUR/USD recovery toward the top of its current range
Frequently Asked Questions
Why has EUR/USD fallen so much recently?
The decline has been driven mainly by broad US dollar strength tied to hawkish Fed rate expectations, rather than any specific weakness in the eurozone economy.
What is the current EUR/USD trading range?
Analysts currently place the speculative range at roughly 1.13400 to 1.15600, with 1.14000 as a key resistance level to watch.
Could EUR/USD recover from its recent lows?
A recovery is possible, particularly if the Fed strikes a less hawkish tone at its July 29 meeting or if falling oil prices ease inflation pressure, though 1.14000 needs to be reclaimed to confirm a shift.
