EURUSD dipped to the 1.1600 area; will the decline continue?

The EURUSD rate has fallen to the 1.1600 area as part of a downward correction and in anticipation of new tariffs on EU goods. Find out more in our analysis for 21 July 2025.

EURUSD forecast: key trading points

• Market focus: this week, the ECB interest rate decision is in the spotlight
• Current trend: correcting downwards
• EURUSD forecast for 21 July 2025: 1.1700 or 1.1600

Fundamental analysis

The EURUSD pair is declining amid a moderate recovery in the US dollar. The latter strengthens as expectations for a Federal Reserve rate cut at the upcoming meeting decrease following US inflation data and President Trump’s statement that he will not dismiss Federal Reserve Chairman Jerome Powell.

Markets remain focused on the new trade tariffs, maintaining some optimism that a US-EU deal might still be reached before 1 August. President Trump has announced 30% tariffs on imports from the European Union starting next month, but later expressed willingness to negotiate. In response, the EU reaffirmed its commitment to reaching a trade agreement.

EURUSD technical analysis

On the H4 chart, EURUSD quotes are correcting within a downward price channel, having dipped this morning just above the 1.1600 area. A further decline towards the 1.1560 support level is possible. Despite this, the daily trend for the pair remains upward, with growth likely to continue after the correction.

The short-term EURUSD forecast suggests a drop towards 1.1560 in the near term if the bears hold the price below 1.1640. However, if the bulls push quotes above 1.1640, the pair could rebound towards the 1.1700 resistance level and beyond.

Summary

The EURUSD pair has tumbled to the 1.1600 area amid the ongoing correction. This week, the market is focused on the ECB’s rate decision on Thursday.