Insights 
VT 
Euro’s Performance
The Euro has retreated from recent highs, with the US Dollar recovering slightly ahead of US Jobless Claims data. The US Dollar had depreciated due to concerns over stagflation and the potential for Federal Reserve rate cuts. The EUR/USD pair is under upward pressure, targeting levels around 1.1700 and 1.1745.
The Euro has risen for three consecutive days, supported by optimistic peace discussions in Ukraine despite weak German data. Meanwhile, worries about an economic slowdown in the US have affected the US Dollar.
The Euro’s recent performance has rallied from just below 1.1400 to the higher 1.1600s. It continues to gain slightly, trading at 1.1665 before the US market opens.
The Euro found support from the meeting between US envoy Steve Witkoff and Russian President Vladimir Putin. In contrast, the US Dollar remains defensive as economic data strengthens the belief in forthcoming Fed rate cuts.
US Jobless Claims data, expected to rise by 3,000 to 221,000, will be watched closely after prior weaker-than-expected job numbers. A weak reading could further pressure the US Dollar amid labour market concerns.
German data showed a 1.9% drop in Industrial Production and a lower trade surplus, but the Euro’s response has been minimal. The EUR/USD is gaining momentum after surpassing 1.1600, with bullish targets between 1.1700 and 1.1710.
US Dollar and Euro Outlook
US President Trump’s trade policies and macroeconomic data have not benefited the US Dollar, while German economic reports had little effect on the Euro. Immediate technical supports and resistances are outlined, with the USD closely tied to future Jobless Claims interpretations.
The Euro is pulling back slightly, but we see this as a temporary pause in a larger upward trend against the US Dollar. The market is clearly anticipating weakness in the American economy, putting the EUR/USD pair on a path toward the 1.1700 level. Traders should view any dips as potential buying opportunities in the coming days.
We believe the US Dollar’s weakness is justified and likely to continue. Recent US jobless claims data for the week ending August 2nd, 2025, came in at 224,000, confirming a gradual loosening in the labor market that has been developing since the second quarter. This reinforces the market’s expectation that the Federal Reserve will cut interest rates at its September meeting, with futures markets pricing in over a 70% probability.
On the other side of the pair, the Euro remains resilient despite some mixed signals from Germany. The market seems to be prioritizing the policy divergence between a dovish Fed and a more neutral European Central Bank. This is reminiscent of the dynamic we saw in late 2019, where concerns about US growth overshadowed European issues, ultimately benefiting the Euro.
Given this outlook, we are positioning for further EUR/USD strength. We are looking at call options with strike prices at 1.1700 and 1.1750, targeting the highs mentioned in recent analysis. The previous resistance around 1.1600 should now act as a solid support level for any short-term pullbacks.
The upcoming US economic data will be critical for confirming this trend. Another weak jobs report or any inflation data suggesting stagflation would likely accelerate the dollar’s decline. We will be watching these figures closely to add to our long Euro positions.
