Should we be wary of the euro's downside potential against the U.S. dollar?

Should we be wary of the euro's downside potential against the U.S. dollar?

11.07.2025

In the U.S. currency market yesterday, the U.S. dollar weakened against the yen. The USD/JPY pair traded between 146.785 and 145.749, fluctuating throughout the session around the 20-period moving average on the hourly chart. On the 4-hour chart, the pair has pulled back from the +2σ line of the Bollinger Bands toward the centerline, while on the daily chart, it continues to trade above the 10-period moving average.

European currencies fell as the euro weakened against the U.S. dollar following yesterday’s release of Germany’s June consumer price index, which showed that both the CPI and HICP remained unchanged from the previous month on a year-over-year basis.The EUR/USD pair fell from 1.1749 to 1.1662. On the hourly chart, the price has moved from above the 20-period moving average (MA) to below it. On the 4-hour chart, the 20-period MA has shifted from a support line to a resistance line, and on the daily chart, the price is currently testing whether it will find support at the 20-period MA line.

Today’s economic indicators include the UK’s monthly GDP, Germany’s Consumer Price Index, the UK’s manufacturing output, the UK’s trade balance, and the UK’s industrial production at 3:00 PM; France’s Consumer Price Index at 3:45 PM; Canada’s employment report and housing starts at 9:30 PM; and the U.S. budget balance at 3:00 AM. We should remain highly vigilant regarding the potential for further declines in the euro against the U.S. dollar.