EUR/USD Slips as Fed Rate-Hike Bets Lift Dollar

Traders' Opinions

Summary:

EUR/USD slipped back toward yearly lows as stronger US Dollar demand and rising Federal Reserve rate-hike expectations outweighed upbeat German retail sales and cautious optimism around US-Iran peace talks.

SELL EURUSD

EXP

TRADING

1.13950

Entry Price

1.12200

1.14600

1.14190 -0.00023 -0.02%

0.0

Pips

Flat

1.12200

Exit Price

1.13950

Entry Price

1.14600

The Euro came under renewed pressure against the US Dollar on Monday, with EUR/USD trading around 1.1385 after failing to hold gains near 1.1430. The pair remains close to its yearly lows and is on track to end June with a decline of roughly 2.3%, marking its weakest monthly performance since July last year.

The move lower came despite stronger-than-expected German retail sales data. Figures from Destatis showed sales rose 1.1% in May, rebounding from a revised 0.4% decline in April and easily beating expectations for a 0.1% contraction. On an annual basis, retail consumption increased 1.8%, suggesting household demand in Europe’s largest economy remains more resilient than feared.

However, the positive German data failed to provide lasting support for the Euro as investors remained focused on the stronger US Dollar and shifting Federal Reserve expectations. Recent US economic data has revived the “US exceptionalism” narrative, with resilient activity and elevated inflation pressures strengthening expectations that the Fed could raise interest rates as early as September.

The Greenback also found support after the US Supreme Court rejected President Donald Trump’s attempt to remove Fed Governor Lisa Cook, easing concerns over the central bank’s independence. That ruling helped restore confidence that monetary policy decisions will remain insulated from political pressure.

Market volatility remains relatively subdued, however, as investors await a series of key US labor market releases. Tuesday’s JOLTS Job Openings report will offer the first major clue, but the main focus is Thursday’s Nonfarm Payrolls data. Economists expect the US economy to have added 110,000 jobs in June, down from 172,000 in May, while still confirming that hiring remains positive.

On the geopolitical front, markets are also monitoring renewed US-Iran peace talks in Doha. Hopes of a negotiated settlement have helped keep oil prices near pre-war levels, easing some inflation concerns and offering modest support to the Euro. Still, in my view, the bigger driver remains monetary policy. Unless US labor data disappoints sharply, the Dollar is likely to remain supported, keeping EUR/USD vulnerable near its lows.

Technical Analysis

EUR/USD remains under bearish pressure on the 4-hour chart, with price trading near 1.1400 after failing to reclaim the key 1.1420–1.1430 resistance zone. The pair has been trending lower since its rejection from the 1.1660–1.1680 area, forming a clear sequence of lower highs and lower lows.

The latest price action shows sellers defending former support around 1.1420, which has now turned into resistance. As long as EUR/USD remains below this level, the downside bias stays intact and short-term rebounds are likely to attract renewed selling pressure.

On the downside, immediate support sits around 1.1320–1.1330. A sustained break below this area would expose deeper losses toward 1.1220, which aligns with the projected bearish move shown on the chart.

On the upside, EUR/USD would need to recover above 1.1430 to ease immediate bearish pressure. A stronger break above 1.1500–1.1510 would be required to invalidate the current downside structure.

Momentum remains negative, with price consolidating below resistance rather than building a strong reversal. This suggests the current pause is more likely continuation selling than accumulation.

TRADE RECOMMENDATION

SELL EUR/USD

ENTRY PRICE: 1.1395

STOP LOSS: 1.1460

TAKE PROFIT : 1.1220

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