With U.S. wholesale inflation now cooling and the Fed entering a more cautious phase, downside risks to the dollar are increasing. On the other side of the equation, the ECB remains concerned about elevated core inflation, especially in services, which has kept their tone relatively hawkish even as growth moderates.

The eurozone's data has stabilized slightly, and while not robust, it’s enough to hold EUR/USD above key support levels. In the short term, this pair is supported by expectations divergence, and a Fed cut before ECB action would likely trigger a broad repricing of USD strength, driving EURUSD down. 

SHORT EURUSD

Jul 17 2025