EUR/USD Eyes 1.1814 as Fed Uncertainty and Weak Dollar Fuel Rally

EUR/USD rallies toward 1.1814 as Fed leadership risk and US rate cut bets weigh on the dollar. Key support holds at 1.1646 despite German...

Written by: Arslan Butt • Thursday, June 26, 2025 • 2 min read

• Last updated: Thursday, June 26, 2025

Quick overview

The EUR/USD pair rose to 1.17030, nearing a four-year high, amid concerns over potential changes in Fed leadership.
Traders are increasingly pricing in a dovish Fed, with a 90% chance of a rate cut in September due to weak macro data.
Technical analysis suggests a possible short-term pullback for EUR/USD, with strong support around 1.16462.
The upcoming US economic data will be crucial in determining the sustainability of the EUR/USD rally.

The EUR/USD pair continued to rise on Thursday to 1.17030 after hitting 1.17447—its highest level in nearly 4 years. This follows the US dollar getting hit again as markets digest the political noise in Washington. A Wall Street Journal report said former President Donald Trump may replace Fed Chair Jerome Powell as early as September, months before his term ends in May.

This has spooked investors and raised questions about central bank independence. Trump has been critical of Powell—calling him “terrible”—so this has added to the concerns. The possibility of an early leadership change has made the Greenback less attractive and traders are moving into the euro despite German domestic data being weaker.

Rate Cut Odds Climb Ahead of Key Data

Traders are now pricing in a more dovish Fed. The CME FedWatch Tool shows a 24% chance of a July rate cut, up from 14% a week ago. For September, odds have surged to 90%, driven by lackluster macro data and internal calls for a less restrictive policy stance.

With the Fed’s credibility in question, all eyes are now on incoming US economic data. Thursday’s Durable Goods Orders and Q1 GDP revisions could offer some clarity, but Friday’s PCE Price Index release—the Fed’s preferred inflation gauge—is expected to be the decisive trigger.

Technical Setup Hints at Short-Term Pullback

From a technical standpoint, the EUR/USD rally may be due for a brief pause. After topping at 1.17447, the pair is consolidating near 1.17030. A rising trendline from the June 21 low and the 50-EMA on the hourly chart (currently at 1.16462) create a strong support confluence zone.

EUR/USD Price Chart - Source: Tradingview — EUR/USD Price Chart – Source: Tradingview

Resistance levels: 1.17447, 1.17816, 1.18144
Support levels: 1.16703, 1.16462, 1.16329
Breakdown trigger: A close below 1.16462 could open the door to 1.15878 or 1.15446

The MACD histogram shows fading momentum with a possible bearish crossover forming. However, as long as the pair holds above 1.1646, the broader uptrend remains intact. A bounce from this zone could target 1.1780 and 1.1814 in the coming sessions.

Conclusion

Despite soft German consumer sentiment, geopolitical calm and mounting dollar pressure continue to favor the Euro. The next 48 hours of US data will likely dictate whether EUR/USD can sustain its climb or correct lower first. For now, the bulls remain in control—but the real test lies just ahead.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.