EUR/USD Forecast: Euro Catches a Bounce, but 1.1450 Supply Caps It Into Core PCE
Last checked: 25 June 2026, 09:30 UK time. Educational only, not financial advice. Trading is leveraged and most retail accounts lose money.
EUR/USD is getting a minor pullback in its favour, but do not confuse a breather with a turn. The pair is trading around the 1.1360 area, just off its lowest level since June 2025, and the only reason it is ticking up is that the dollar is taking a pause, not because the euro has found a bid of its own. This is still a dollar story, and the dollar story is rate hikes.
The macro: the dollar is resting, not reversing
The US dollar index ran all the way up to 101.80 on Wednesday, a 13-month high that lines up with the May 2025 peak and the very top of the 52-week range (95.55 to 101.80). That is a major area of liquidity, and markets do not move in straight lines into a level like that. What we are seeing now is textbook: some profit-taking out of the dollar ahead of a big data point, the Dixie easing back toward 101.5 and giving the euro a little room. The risk is that the dollar simply carves a higher low here and uses it as a launchpad to break 101.80 and run the next pocket of liquidity toward 102. While that structure holds, EUR/USD rallies are the ones to fade.
Today is the day the dollar’s direction gets tested. US core PCE, the Fed’s preferred inflation gauge, lands at 13:30 UK time (08:30 ET). The consensus looks for headline PCE at 4.1% year on year, up from 3.8% and the hottest since April 2023, driven largely by energy, with most desks (UBS, Bank of America) flagging this as the likely peak for the year. Core PCE is seen steady at 3.3% year on year and 0.37% on the month, up from 0.24%. With the Fed holding at 3.50% to 3.75% and CME pricing a 37.4% chance of a July hike against a 62.6% hold, a hot print keeps adding hike risk and the dollar bid. The pressure points the same way through the calendar: US payrolls on 2 July and CPI on 14 July into the 29 July decision.
On the other side of the pair there is no help coming. The ECB raised rates by 25 basis points this month but Lagarde made clear the bank does not need to respond aggressively to the Middle East, and German PMI just contracted at its fastest pace since 2024. A soft economy and a cautious central bank is not the recipe for a euro recovery.
Levels: a bounce into supply, eyes still lower
| Direction | Level | Why it matters (confluence) |
|---|---|---|
| Resistance / supply | 1.1450 | Heavy supply zone above; a pullback into here is likely a lower high while the dollar trend holds |
| Spot | ~1.1360 | Just off the lowest since June 2025; minor relief bounce on dollar profit-taking |
| Support / target | 1.1200 | First major downside liquidity objective if the dollar resumes |
| Support / target | 1.1150 | Deeper liquidity pool, the desk’s own downside magnet below 1.1200 |
| What invalidates it | Daily close back above 1.1450 | Would neutralise the bearish read and put the relief bounce in charge |
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How the desk reads it
The base case is a lower high for continuation lower: let the bounce run into supply, then look for the dollar to resume and drag the euro back down toward 1.1200 and 1.1150. But always make room for the other side. The pair is parked on the year’s lows with stretched momentum, the dollar is the one that needs a rest after a hard run, and an in-line or soft core PCE could let the market trim July hike pricing and squeeze EUR/USD higher for a session or two. The line that decides it is 1.1450: below it the trend is intact, a clean daily close above it changes the conversation. This is the desk read, cross-referenced across multiple live sources and stripped of the noise.
What changed since the last update
EUR/USD is bouncing off its lowest since June 2025 as the dollar pauses below the 101.80 ceiling into core PCE, but 1.1450 supply caps the upside and the downside targets at 1.1200 and 1.1150 remain the base case while the dollar trend holds.
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FAQ
Why is EUR/USD bouncing on 25 June 2026? EUR/USD is getting a minor relief bounce off its lowest level since June 2025 because the US dollar is pausing below its 101.80 13-month high ahead of the core PCE inflation report, not because of any improvement in the euro.
What are the key EUR/USD levels now? Supply is heavy at 1.1450, which is likely a lower high while the dollar trend holds. Downside targets sit at 1.1200 and then 1.1150. A daily close back above 1.1450 would neutralise the bearish read.
What could turn the euro back up? An in-line or soft US core PCE that lets the market unwind July Fed hike pricing would ease dollar pressure and could squeeze EUR/USD higher into the 1.1450 supply.
Confirmed facts: the EUR/USD level and one-year low, the dollar index 101.80 high, the core PCE consensus, the 37.4% July hike probability, the 3.50-3.75% target range and the data dates are sourced from market data providers, CME pricing, BEA and the release calendars. The level map is the desk’s interpretation, not a guarantee. Trading involves risk.
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