empty
15.04.2025 12:35 AM
EUR/USD: Northern Trend, Southern Pullbacks

The euro-dollar pair continues to trade near multi-year highs, hovering in the 1.13–1.14 range. On Friday, buyers of EUR/USD reached 1.1474 — the highest price since February 2022. However, the 1.1400 level proved too difficult for the bulls to break decisively, and Friday's session closed at 1.1363. Attempts to push higher have also been unsuccessful so far. Nevertheless, the current situation has its upside: the strong downward pullbacks allow EUR/USD bulls to re-enter the market at better prices. Despite sellers regularly taking short-term control, the broader upward trend remains in place, driven by ongoing dollar weakness.

This image is no longer relevant

The dollar continues to come under pressure, increasingly weighed down by concerns over stagflation in the U.S. Last week's reports on CPI and PPI growth — which showed inflation slowing in the U.S. — did little to calm market participants. These figures have already lost relevance, as they reflect the situation in March, before Donald Trump's new tariff plans were implemented. More up-to-date macro indicators suggest entirely different dynamics.

For example, according to data published Friday by the University of Michigan, inflation expectations in April surged to 6.7% — the highest since October 2022. Meanwhile, the U.S. consumer sentiment index plunged to 50.8 — the lowest reading since July 2022.

Federal Reserve officials have also expressed concern over rising stagflation risks — concerns that were already evident at the March FOMC meeting, according to the minutes. Nearly all members acknowledged that inflation risks are "tilted to the upside," while GDP growth projections for 2025 were revised downward. Some participants also noted that the Fed may need to make "difficult decisions" if economic growth and employment outlook worsens while inflation proves more persistent than expected.

The minutes didn't specify what those "difficult decisions" might be, but judging by recent comments, the Fed appears ready to pause monetary policy easing. Fed Chair Jerome Powell stated on April 4 that the central bank would not cut rates "until there's a clearer picture of the overall impact." Last week, he made no public comments on Trump's decisions, which further complicated the economic outlook (especially regarding the consequences of the tariff policy). Therefore, Powell is expected to take a more defined — likely more hawkish and pessimistic — stance when he speaks again on Wednesday, April 16.

New York Fed President John Williams, one of the most influential Fed officials, also supported a pause in monetary easing, though he did so more indirectly. He noted that expected labor force slowdowns (due to reduced immigration/increased deportations and tariff-related economic pressure) would significantly restrain real GDP growth — potentially down to 1.0% or lower. He also predicted that the unemployment rate could rise to 4.5–5.0%. In that context, Williams said current monetary policy settings are "appropriately positioned" to manage emerging risks.

Despite this, market expectations remain dovish. According to the CME FedWatch Tool, the probability of a 25-basis-point rate cut at the June meeting is 65%. The market expects another cut in July or September and one or two more by year-end. Overall, traders anticipate a total of 75–100 basis points in rate cuts — which is keeping pressure on the U.S. dollar.

If inflation accelerates again in April–May, the Fed's options may become more limited, further destabilizing markets. In such a case, stagflation risks in the U.S. would increase even more. This would put the dollar in a kind of zugzwang, where any policy decision would negatively affect the currency.

All of this reinforces the case for prioritizing long positions on EUR/USD. This strategy will remain relevant until the U.S. and China either begin formal negotiations or symbolically ease their tariff standoff, signaling a potential reconciliation.

There are no signs of de-escalation as of now. Therefore, southern pullbacks in the EUR/USD pair should still be seen as opportunities to enter long positions.

From a technical standpoint, EUR/USD remains near the upper or between the mid and upper lines of the Bollinger Bands on all higher timeframes and above all Ichimoku indicator lines (except on H4), which continues to signal long bias. Upward targets are set at 1.1400 (upper Bollinger Band on H1), 1.1450 (upper Bollinger Band on H4), and ultimately the psychologically significant level of 1.1500.

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
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

EUR/USD. Analysis and Forecast

Today, the EUR/USD pair is attempting to attract buyers. Despite the European Central Bank's decision on Thursday to leave interest rates unchanged, the euro is facing headwinds due to ongoing

Irina Yanina 13:20 2025-07-25 UTC+2

No Unity of Opinion Within the ECB Yet

Yesterday, the European Central Bank kept interest rates unchanged, citing risks stemming from the trade war with the U.S., the strong euro, and rising government spending. According to Governing Council

Jakub Novak 11:59 2025-07-25 UTC+2

ECB Leaves Rates Unchanged

Yesterday, many were watching how the European Central Bank would act under current conditions, as the economy still requires stimulus, but inflationary risks prevent further easing. Following the meeting, President

Jakub Novak 11:36 2025-07-25 UTC+2

The Market Has Chosen a Win-Win Strategy

The U.S. stock market has shaken off its fears completely. The VIX volatility index has plunged to its lowest level since early February, while the S&P

Marek Petkovich 11:15 2025-07-25 UTC+2

Will Trump Succeed in Forcing Powell to Do His Bidding? (Potential for a Bitcoin Decline and a Rise in #NDX)

The U.S. president is fully implementing his aggressive policy toward everyone and everything — both in foreign and domestic affairs. While his actions toward trade partners are more or less

Pati Gani 09:57 2025-07-25 UTC+2

What to Pay Attention to on July 25? A Breakdown of Fundamental Events for Beginners

There are relatively few macroeconomic reports scheduled for Friday, but all of them are quite important. In Germany, the IFO Business Climate Index will be released — the least significant

Paolo Greco 06:43 2025-07-25 UTC+2

GBP/USD Overview – July 25: No Sign of De-escalation Yet

On Thursday, the GBP/USD currency pair pulled back slightly, but this strengthening of the dollar has no real impact on the overall picture. The British pound has corrected in recent

Paolo Greco 04:17 2025-07-25 UTC+2

EUR/USD Overview – July 25: The ECB Meeting Did Not Change the Balance of Power Between the Dollar and the Euro

The EUR/USD currency pair continued to move upward on Thursday. There were several macroeconomic events scheduled for the day, and they did provoke a small market reaction

Paolo Greco 04:17 2025-07-25 UTC+2

EUR/USD: ECB's "Hawkish Pause" and Conflicting Macroeconomic Reports

The results of the ECB July meeting provided slight support for the euro. However, contradictory macroeconomic reports and anticipation of the outcome of the US-EU negotiations played a restraining role

Irina Manzenko 00:50 2025-07-25 UTC+2

The Euro Outsmarted the "Bears"

There was no "sell the fact" reaction. One of the reasons behind the recent EUR/USD rally was the expectation that the deposit rate would be held at 2% following

Marek Petkovich 00:50 2025-07-25 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.