The EURO remains comfortably above 1.1750 against the US dollar during Thursday’s European trading session, maintaining its short-term bullish momentum. Following a brief technical correction at mid-week, EUR/USD regained upward traction in the latter part of the day, closing in positive territory. The pair continues to trade above key support levels as investors adopt a cautious stance ahead of upcoming macroeconomic releases and monetary policy announcements.
Market sentiment has been relatively risk-on, partly driven by positive developments in US-Japan trade negotiations, which have subdued the US dollar’s defensive qualities. The upcoming release of the preliminary Purchasing Managers’ Index data for both Germany and the Eurozone for July will be scrutinized closely. These figures could offer further insight into the resilience of Europe’s manufacturing and service sectors and influence the EURO ’s near-term outlook.
In addition, the European Central Bank’s policy decision scheduled for later today remains a focal point. The consensus suggests the ECB will hold its key interest rates steady, reflecting ongoing uncertainties surrounding inflation prospects amid uncertain trade relations between the EU and the US. Any indication of a cautious tone from the ECB might bolster the EURO , while signs of an easing stance — should trade tensions ease or if economic data deteriorate — could weigh on the currency.
Further complicating the outlook, recent reports hint at the possibility of a trade agreement between the US and the EU, which may include modest tariffs. Such developments could prompt the ECB to consider more accommodative measures, potentially diminishing EURO strength. In the latter half of the day, US PMI data and comments from President Trump regarding his stance on Federal Reserve policy are expected to add volatility.
Technical indicators suggest that EUR/USD maintains room for further appreciation, with immediate resistance near 1.1800, ahead of the multi-year highs around 1.1830. Support levels are identified around 1.1700 and 1.1650, with the latter aligning with Fibonacci retracement levels. Overall, the EURO ’s resilience remains contingent on macroeconomic data and geopolitical developments in trade negotiations.
