The EUR/USD exchange rate is showing a softer tone at the beginning of the new week with a slight increase in the US dollar. Despite the small decline, there is a lack of follow-up selling, which makes bearish traders cautious. These developments are particularly interesting for investors as they come ahead of important central bank decisions that will have direct impacts on the currency market.
Current Market Situation
- Current Rate: The EUR/USD rate has moved significantly in recent weeks, reaching about 1.1544 in mid-June 2025. This value marks a high since October 2021, after the pair rose 12.7% from a low of 1.0243 on January 12, 2025.
- Technical Analysis: Technical analysis shows that the EUR/USD rate remains within an ascending channel, which favors the bulls. The price recently reached the 1.1630 mark and could continue to rise as long as it stays above its 50-day moving average.
Central Bank Decisions and Their Impacts
- Central Banks: The decisions of central banks, particularly the European Central Bank (ECB) and the Federal Reserve (Fed), are crucial for the future development of the EUR/USD rate. These decisions can influence interest rates and thus affect the attractiveness of the respective currencies for investors.
- Interest Rate Decisions: A rate hike by the Fed could strengthen the US dollar, while a rate hike by the ECB could strengthen the euro. Conversely, a rate cut could harm the respective currencies.
Forecast for the Coming Months
- Short-term Forecast: Mixed movements are expected in the coming months. Some analysts predict that the rate could drop to about 1.1268 by the end of June 2025 before possibly rising to about 1.1403 by September.
- Long-term Forecast: In the long term, the outlook for the EUR/USD rate is rather bullish, as the divergence in central bank policies and other economic factors could strengthen the euro.
Trading Strategies
- Bulls: For bullish traders, it is important to watch the ascending channel and look for signs of continuation of the upward trend.
- Bears: Bearish traders should be cautious as the lack of follow-up selling could indicate a potential trend reversal.
In summary, the EUR/USD rate remains in an ascending channel, which favors the bulls. However, the upcoming central bank decisions will be crucial for future development. Investors should prepare for these events and adjust their trading strategies accordingly.