Attention is turning to the euro’s potential for recovery as it continues to fall

Attention is turning to the euro’s potential for recovery as it continues to fall

31.07.2025

In yesterday’s U.S. trading session, the U.S. dollar—having weathered the FOMC meeting—reached its strongest level during U.S. trading hours. The EUR/USD pair fell from 1.1571 to 1.1400, declining along the 20-period moving average on the hourly chart. On the 4-hour chart, a band walk along the -2σ line of the Bollinger Bands was observed, while the daily chart showed a fifth consecutive day of decline. The RSI plummeted from 60 to 32.We will need to watch for any directional changes to see if the US dollar maintains its strength during today’s US trading hours.

Among European currencies, the euro fell against the pound. The EUR/GBP pair dropped from 0.8659 to 0.8610. The decline occurred as the pair encountered resistance at the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, the pair is currently hovering just below the 200-period simple moving average (SMA), with the market in the midst of either a break below the SMA or a rebound. On the daily chart, the pair has been falling for three consecutive days. We will be watching price movements during European trading hours to see if the euro, which has been falling against the pound, will recover.

Today’s schedule includes Australian retail sales and housing construction permits at 10:30; the Bank of Japan’s policy rate decision and statement around noon; Japanese housing starts and construction orders at 14:00; the German import price index at 15:00; a press conference by BOJ Governor Ueda at 15:30; and Swiss retail sales,at 9:00 PM, German CPI; at 9:30 PM, Canadian GDP, U.S. Initial Jobless Claims, and U.S. PCE Deflator; at 10:45 PM, the U.S. Chicago PMI; and at 11:30 PM, U.S. weekly natural gas inventories. I want to carefully assess the potential for a recovery in the euro, which has been falling steadily.