Select Language

EUR/USD struggles to recover on risk aversion, ahead of Fed decision

Breaking news

EUR/USD struggles to recover on risk aversion, ahead of Fed decision

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.06.18 17:02
EUR/USD struggles to recover on risk aversion, ahead of Fed decision

update 2025.06.18 17:02

  • Geopolitical concerns and higher Oil prices are hurting risk appetite and could weigh on the Euro.
  • The US Dollar could strengthenon investors' fears of higher US involvement in the Israel-Iranwar.
  • EUR/USD trims some losses with all eyes on the Fed's decision.

The EUR/USD pair is picking up on Wednesday after a significant decline on the previous day. From a wider perspective, however, he escalating tensions in the Middle East, the ongoing uncertainty about global trade, and the sharp acceleration in Oil prices are keeping upside attempts limited.

The common currency is now struggling to regain the 1.1500 level, still near 1% below last week's highs, with market sentiment frail as the war between Israel and Iran enters the sixth day, with the US taking a more aggressive tone against the Islamic Republic.

Comments from US administration officials suggesting that President Donald Trump would be considering striking Iran, to confirm a total surrender and the end of its nuclear program, have unnerved investors, wary that the conflict might spill into a regional war in a highly volatile area.

Crude prices appreciated beyond $3 on Wednesday to reach levels close to the $75.00 area, a 16% increase from May's prices, posing additional weight on the Euro. The Eurozone is a net Crude importer, and rising prices would hurt the region's growth prospects.

In the macroeconomic front, US Retail Sales data confirmed the negative impact of trade uncertainty on the US economy, but the US Dollar's reaction was marginal, with geopolitical tensions front and center on investors' minds.

The focus on Wednesday is on the Federal Reserve's (Fed) monetary policy decision and Chairman Jerome Powell's views on how to deal with weakening growth and potentially higher inflation. The US Dollar will be sensitive to changes in the economic projections or the dot plot that might alter interest rate expectations.

Euro PRICE Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD -0.24% -0.24% -0.16% -0.05% -0.33% -0.28% -0.03%
EUR 0.24% 0.00% 0.03% 0.10% -0.21% 0.02% 0.21%
GBP 0.24% -0.00% 0.04% 0.09% -0.21% -0.12% 0.22%
JPY 0.16% -0.03% -0.04% 0.14% -0.15% 0.10% 0.38%
CAD 0.05% -0.10% -0.09% -0.14% -0.28% -0.22% 0.13%
AUD 0.33% 0.21% 0.21% 0.15% 0.28% 0.22% 0.44%
NZD 0.28% -0.02% 0.12% -0.10% 0.22% -0.22% 0.21%
CHF 0.03% -0.21% -0.22% -0.38% -0.13% -0.44% -0.21%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

Daily digest market movers: The Euro picks up despite increasing geopolitical tensions

  • Israel continued pounding Iran for the sixth consecutive day. US President Trump demanded the "unconditional surrender" of Tehran's authorities and vowed to deploy more fighter jets to support the Israeli army in a clear sign of America's higher commitment in the war.
  • Later today, the Federal Reserve is widely expected to leave interest rates steady at the current 4.25%-4.5% range, but the soft US data seen recently might have prompted the bank to tone down its hawkish stance. Any hint of a rate cut in the coming months is likely to send the US Dollar lower against the Euro.
  • Futures markets are pricing two interest rate cuts in 2025, with a 60% chance that the first of them will take place in September, according to data released by the CME Fed Watch tool.
  • US Retail Sales data from Tuesday showed a larger-than-expected decline. US consumption decreased at a 0.9% rate in May, beyond the 0.7% contraction expected, and April's reading was revised down to a 0.1% drop from the previous estimation of a 0.1% increase.
  • In the Eurozone, the German ZEW Economic Sentiment Index, also released on Tuesday, improved beyond expectations, rising to 47.5 in June from 25.2 in May, exceeding the market forecasts of a 35.0 reading. The data, however, failed to provide any significant support to the Euro.

Technical analysis: EUR/USD extends its reversal with 1.1475 support in focus

EUR/USD Chart


EUR/USD broke below the triangle pattern on Tuesday, confirming a deeper reversal from last week's highs, above 1.1600. The pair is pinching up on Wednesday, but the 4-hour Relative Strength Index (RSI) remains below the 50 level, suggesting that bearish momentum could grow.

The pair has returned above 1.1500 and might retest the base of the broken triangle, now at 1.1545, before extending lower. Immediate support is at Tuesday's low, 1.1477. Below here, the next targets are 1.1370 (June 6 and 10 lows) and 1.1315 (May 30 low).

On the upside, a confirmation above the mentioned 1.1545 would ease bearish pressure and bring the 1.1630-1.1640 area (June 12 and 16 highs back to the focus.

Risk sentiment FAQs

In the world of financial jargon the two widely used terms "risk-on" and "risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a "risk-on" market, investors are optimistic about the future and more willing to buy risky assets. In a "risk-off" market investors start to 'play it safe' because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

Typically, during periods of "risk-on", stock markets will rise, most commodities - except Gold - will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a "risk-off" market, Bonds go up - especially major government Bonds - Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are "risk-on". This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

The major currencies that tend to rise during periods of "risk-off" are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world's reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them - even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.




Date

Created

 : 2025.06.18

Update

Last updated

 : 2025.06.18

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Gold rises for second consecutive day as trade tensions intensify

Gold (XAU/USD) is ticking up slightly on Thursday, benefiting from escalating global trade tensions as recent tariff announcements from US President Trump have rekindled investors' appetite for bullion as a traditional safe-haven asset.
New
update2025.07.10 21:03

US Dollar steady amid Trump's trade escalation, cautious Fed

The US Dollar (USD) holds its footing on Thursday after a weak start to the day, as investors digest fresh tariff threats from US President Donald Trump.
New
update2025.07.10 20:59

JPY is steady on the day - Scotiabank

The Japanese Yen (JPY) is quietly consolidating its recent pullback, attempting to find support following a poor start to July, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
update2025.07.10 20:51

GBP up modestly in quiet trade - Scotiabank

The Pound Sterling (GBP) is up a modest 0.2% and outperforming most of the G10 currencies in quiet trade, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
update2025.07.10 20:47

EUR/GBP wobbles around 0.8630 amid uncertainty over US-EU trade deal

The EUR/GBP pair trades in a tight range around 0.8625 during the European trading session on Thursday.
New
update2025.07.10 20:47

USD/CHF pares previous losses and returns above 0.7950 amid a stronger US Dollar

The US Dollar is featuring a moderate recovery on Thursday, paring some losses after the previous two days' reversal. The pair, however, remains trading near long-term lows, with upside attempts capped below the 0.8000 psychological level.
New
update2025.07.10 20:41

EUR consolidates in low 1.17s - Scotiabank

The Euro (EUR) is quietly consolidating in the low 1.17s and extending this week's narrow range, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
update2025.07.10 20:32

CAD is little changed on the day - Scotiabank

The Canadian Dollar (CAD) remains range-bound but has made a little progress overnight, reflecting the generally softer US Dollar (USD) undertone, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
update2025.07.10 20:26

USD slips as markets digest tariff news - Scotiabank

The US Dollar (USD) is trading a little more defensively overall this morning as markets digest the latest round of US tariff news--a hefty 50% on copper and 50% on Brazil, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
New
update2025.07.10 20:24

Gold Price Forecast: XAU/USD is testing trendline resistance at $3,325

Gold (XAU/USD) found buyers right below the $3,300 level on Wednesday to regain some of the ground lost over the previous days.
New
update2025.07.10 20:00

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel