EUR/USD Forecast: Euro Back On 1.1400 As Oil Spikes
By Ken Chigbo · Founder, KenMacro · 18+ years in markets, London trading floor and institutional FX
Updated 2026-07-13 07:30 BST
The euro handed Friday’s bounce back in a single Asia session. EUR/USD is trading at 1.1404 (TradingEconomics, 2026-07-13 07:30 BST), sitting right on the 1.1400 range base, because the dollar gapped higher on an oil-led inflation impulse the market did not price on Friday. This is a dollar story, not a euro one, and the euro is the cleanest place to see it break.
The EUR/USD forecast for Monday 13 July hinges on the 1.1400 range base, with spot at 1.1404 after the dollar gapped higher on a 4% oil spike and the US 10-year printing 4.58%, near seven-week highs. Lose 1.1400 and 1.1370 opens, then 1.1300 if Tuesday’s core CPI runs hot.
Named Levels Worth Watching
↓ Downside liquidity (below spot 1.1404)
- 1.1400, the base of the range and the 23.6% retracement of the 2022 to 2026 rally; price is sitting on it.
- 1.1370, the first support on a clean break of the range base.
- 1.1300, the deeper objective if CPI confirms the hike trade.
↑ Upside liquidity (above spot 1.1404)
- 1.1450, the first cap on any bounce; the level Friday’s rally stalled under.
- 1.1475, the band that rejected the euro last week.
- 1.1500, the pivot the euro has to reclaim and hold to change the story.
The Macro Setup Behind The EUR/USD Forecast
The dollar gapped higher at the open and the reason is oil. Weekend escalation between the US and Iran sent crude up about 4% (WTI 74.26, Brent 79.26, the highest since 22 June, per CNBC and Al Jazeera), and that re-armed the inflation impulse. The US 10-year yield is at 4.58%, near seven-week highs, and DXY has reclaimed 101.02 to trade at 101.09. Higher oil, higher inflation expectations, higher-for-longer rates, dollar buying. That is the chain, and it is the whole story of this morning’s tape.
Friday’s dollar pullback is dead. Every leg of it has reversed. Cable’s break above 1.3400 has failed and it trades at 1.3385. The euro is back on the 1.1400 base at 1.1404. And gold, the one that matters most on a war day, lost 4,100 and trades at 4,057, down 1.55%. When missiles are flying and the haven metal goes down, real yields are setting the price, not fear. Read the dollar and real yields first, the euro second. The full live read on this regime drops daily inside the MACRO MASTERY desk.
The euro carries the terms-of-trade damage in every energy shock, and this one is textbook. Europe imports its energy; a crude spike is a real income hit at the same moment as it is a rate-support story for the dollar. EUR/USD has repeatedly traded as the cleanest expression of the Fed path, and in every energy shock of the last cycle the euro absorbed the terms-of-trade cost while the dollar took the rate support. That is the exact split the desk is mapping at the 1.1400 base today.
Tuesday’s CPI Is A Trap, And The Desk’s Edge Is Reading It Correctly
June CPI lands Tuesday 14 July at 13:30 BST. Consensus (per BLS schedule and FXStreet’s preview) is a headline of -0.1% m/m, cutting the annual rate from 4.2% to about 3.9%, with core at +0.3% m/m and annual core steady at 2.9%. Fed Chair Kevin Warsh testifies Tuesday and Wednesday. Fed funds sit at 3.50 to 3.75% and the market prices at least one 25bp hike in 2026 for the 28-29 July FOMC.
Here is the trap: that soft headline is already out of date. The expected negative headline is mechanically an energy base effect, because oil fell through late June and WTI is still down about 8% over the past month. June CPI measures June. It cannot see this weekend. The oil spike that actually matters lands in the July and August prints, not tomorrow’s number. So read core, at 2.9% and sticky, not the headline. A hot core is clean fuel for the dollar and the hike trade. A soft headline buys a euro pullback the oil tape can undo within days. Take a soft print with a pinch of salt, and do not marry the fade. Our how to trade CPI pillar covers the mechanics of exactly this asymmetry.
The geopolitics is the supply mechanism, not a headline pop. Iran allegedly hit the MV GFS Galaxy; US CENTCOM struck hundreds of targets in Iran and ran dozens more strikes on Sunday; Iran fired missiles and drones at the UAE, Qatar, Kuwait, Oman and Bahrain. Iran’s Strait Authority says vessels on unauthorised routes lose safe-passage guarantees. Hormuz traffic has collapsed to about 6 vessels tracked Thursday to Friday against 18 to 22 daily crossings earlier in July. Hormuz carries about 20% of the world’s oil and gas trade. That is why the crude bid is structural.
Multi-Timeframe Read For The EUR/USD Forecast
Daily structure: the euro is in a range whose base is 1.1400 (23.6% of the 2022 to 2026 rally) and whose ceiling has been 1.1475 to 1.1500 for three weeks. Friday closed inside; Monday’s open has punched price back down to the base without touching it. That is the second test of 1.1400 in six sessions, and both prior tests bought sponsors quickly. The context this time is different, because the driver is not a soft data print; it is a structural crude bid.
H4 tape reads exactly the way you would expect on a Sunday-gap Monday: a clean impulsive leg down through 1.1450 and into 1.1404 with no meaningful pullback. There is no defended intraday low yet; the tape has only been open for a few hours. What matters is whether the 1.1400 handle absorbs supply into the London open or whether it caves before the New York cash open. The desk covers FOMC, NFP and CPI live as the prints land inside MACRO MASTERY, and Tuesday’s CPI is exactly that kind of moment.
Intraday: 1.1400 is the line. A clean H1 close below opens 1.1370 as the first support and 1.1300 as the deeper objective if the hike trade extends. On the upside, any bounce is capped at 1.1450 first, 1.1475 second, and only a reclaim of 1.1500 changes the picture.
Scenario Map
Bull scenario, 1.1400 absorbs and the euro chops back into the range
In the bull case, 1.1400 buys sponsors for the third time in six sessions, either because the London desks lean into the range base or because Tuesday’s CPI headline surprises soft and traders take the initial dollar-off reaction. In this scenario, EUR/USD tends to drift toward 1.1450, the first cap and where Friday’s rally stalled, and then 1.1475 where sellers ambushed the euro last week. The read only genuinely changes on a reclaim and hold above 1.1500. Even so, a bull bounce on a soft headline is a fade the oil tape can undo within days if crude holds above 74 and the 10-year stays pinned at 4.58%.
Bear scenario, 1.1400 gives and the hike trade extends
In the bear case, either Monday’s tape breaks 1.1400 before New York or Tuesday’s core CPI prints hot at 3.0% or above and the market pulls forward the July FOMC hike. In this scenario, EUR/USD tends to drift toward 1.1370 as the first support, and 1.1300 as the deeper objective, the level that maps to a full acceptance of the hike-in-2026 pricing. The trigger is a daily close below 1.1400 with US real yields holding at or above current levels. Warsh’s testimony Tuesday and Wednesday is the additional catalyst, and a hawkish read there compounds the CPI move.
What Would Invalidate The Read
A Hormuz de-escalation headline that pulls crude back through $70 would collapse the entire inflation chain and take yields lower, which would put the dollar on the back foot and lift the euro off 1.1400. A soft core print at 2.7% or below on Tuesday, paired with a dovish Warsh, would do the same. On the flip side, a daily close back above 1.1500 with the 10-year still at 4.58% would tell the desk the euro is being bid on something structural we are not seeing yet, and that would force a reassessment of the whole range-base thesis.
Final Takeaway On The EUR/USD Forecast
The euro is sitting on 1.1400 because the dollar is being bid on oil, and the oil bid is structural until Hormuz normalises. Tuesday’s headline CPI will look soft because June oil was falling, but core at 2.9% and a crude tape rebuilding the inflation trade in real time is what the desk is reading. Lose 1.1400 and hold below and the euro tends toward 1.1370 then 1.1300; defend it and 1.1450 caps the bounce.
The Desk Covers This Live
CPI Tuesday, Warsh Tuesday and Wednesday, FOMC on 28-29 July. Three catalysts, one dollar chain. MACRO MASTERY runs the live read as the prints land.
Same stack a hedge-fund analyst runs every morning, delivered into Discord.
“Gold fell on a war day. That is the whole macro read on one line, and the euro is where it settles.”
Frequently Asked Questions
Where is EUR/USD trading right now and why?
EUR/USD is at 1.1404 as of 07:30 BST on 13 July 2026, sitting on the 1.1400 range base. The dollar gapped higher at the Asia open on a weekend oil spike of about 4% (WTI 74.26, Brent 79.26), which pushed the US 10-year yield to 4.58% and revived the higher-for-longer rate story. That combination has pulled the euro back into the range base after Friday’s failed bounce.
What does June CPI mean for the EUR/USD forecast?
June CPI lands Tuesday 14 July at 13:30 BST. Consensus is a headline of -0.1% m/m and core of +0.3% m/m with the annual core at 2.9%. The soft headline is an energy base effect from June, when oil was falling, so it cannot see the weekend war-driven crude spike. The desk reads core, not the headline. A hot core supports further dollar buying and pressure on EUR/USD toward 1.1370 and 1.1300.
Why did gold fall on a war-escalation day?
Gold fell 1.55% to 4,057 despite US and Iran striking each other over the weekend, because real yields, not haven demand, are setting the price. The US 10-year hit 4.58%, near seven-week highs, and rising yields raise the opportunity cost of holding a metal that pays nothing. That yield move is the same force pushing the dollar higher and the euro back onto the 1.1400 range base.
What are the key levels below 1.1400 in EUR/USD?
The first support below the 1.1400 range base is 1.1370, which is the initial objective on a clean break. Below that, 1.1300 is the deeper target and maps to a full acceptance by the market of the hike-in-2026 pricing for the July FOMC. These levels only come into play on a daily close below 1.1400 with US real yields holding at or above current levels near 4.58% on the 10-year.
What would flip the EUR/USD picture back to bullish?
Only a reclaim and hold above 1.1500 changes the story. The 1.1450 level caps any first bounce and 1.1475 rejected the euro last week, so those are chop, not trend. A Hormuz de-escalation headline that pulls crude back through $70 and takes US yields lower would also lift the euro off the 1.1400 base, as would a genuinely soft core CPI print at 2.7% or below paired with a dovish Warsh testimony.
Is the Fed still likely to hike in 2026?
The market prices at least one 25bp hike in 2026 with Fed funds at 3.50 to 3.75% and the 28-29 July FOMC in view. The oil-led inflation impulse and the US 10-year at 4.58% both point toward the hawkish case. Fed Chair Kevin Warsh testifies to Congress on Tuesday and Wednesday, and a hawkish read there compounded by a hot core CPI would push the July meeting toward a genuine hike-versus-hold call.
How does the Hormuz situation affect the euro?
Hormuz carries about 20% of the world’s oil and gas trade, and traffic has collapsed to about 6 vessels tracked Thursday to Friday against 18 to 22 daily crossings earlier in July. That is the supply mechanism keeping the crude bid structural. Europe imports its energy, so any sustained crude spike is a terms-of-trade hit for the euro at the same moment as it is a rate-support story for the dollar. That is why EUR/USD is the cleanest expression of the shock.
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Related Reading
Sources: TradingEconomics (EUR/USD, DXY, WTI, Brent, XAU/USD spot, 2026-07-13 07:30 BST), FRED St Louis Fed (US 10-year yield), Al Jazeera and CNBC (US-Iran escalation, Hormuz traffic, oil spike), FXStreet and Kiplinger (June CPI consensus and preview), Bureau of Labor Statistics (CPI release schedule). All prices cross-referenced to the 5-pip FX / 0.1% commodity / 0.05% equity noise band before publication.
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