EUR/USD Hits Lowest Level Since Early July

As the EUR/USD chart indicates today, the euro has fallen below the 1.1550 mark against the US dollar, reaching the lows of June 2025. As a result, July may become the first month in 2025 to record a decline in the currency pair.

Why Is EUR/USD Declining?

There are two key factors driving the euro’s weakness relative to the US dollar:

→ Anticipation of the Federal Reserve Meeting. At 21:00 GMT+3 today, the Fed’s interest rate decision will be released. According to Forex Factory, analysts expect the Federal Funds Rate to remain unchanged at 4.25%-4.50%.
→ Market Reaction to the US-EU Trade Agreement. The trade deal signed last weekend between the United States and Europe is being critically assessed by market participants.

As noted in our Monday analysis, signs of a bearish takeover emerged on the chart following the agreement’s signing. Since then, EUR/USD has declined by approximately 1.3%. The question now is whether the downtrend will continue.

Technical Analysis of the EUR/USD Chart

The upward channel that had remained valid since mid-May was decisively broken by bears this week. The nature of the breakout (highlighted by the red arrow) was particularly aggressive, with the price dropping from the 1.1710 level to the D point low without any meaningful interim recoveries.

Key observations include:

→ The drop has resulted in a classic bearish A-B-C-D market structure, characterised by lower highs and lower lows.
→ On the 4-hour timeframe, the RSI indicator has fallen into oversold territory, reaching its lowest point of 2025 so far.
→ Notably (as highlighted by the blue arrow), there was a strong rebound from the 1.1455 support level earlier. Bulls demonstrated significant strength at that time, breaking through the R resistance line.

Given these factors, we could assume that after this week’s sharp decline, EUR/USD may attempt a short-term recovery from the support zone (highlighted in purple). Should this scenario unfold, potential resistance may emerge near the 1.1630 level, as this area aligns with:

→ The 50% Fibonacci retracement of the C→D decline;
→ The breakout point of the lower boundary of the previous ascending channel, indicating a shift in market balance in favour of the bears.

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