EURUSD: SELL 1.1665, SL 1.1685, TP 1.1565 | 18 August 2025

Event to watch today:

15.08 15:30 EET. USD - Change in retail sales

EURUSD:

The euro continues to depreciate after the release of the July U.S. Producer Price Index, which rose by 0.4% m/m—above market consensus. The data strengthened expectations that the Fed will not rush to cut rates at the September meeting, which supports the U.S. dollar.

The euro’s position is further weakened by the European Central Bank’s rhetoric: Governing Council members unanimously reaffirmed their readiness to ease further if eurozone economic activity remains sluggish.

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The European Commission already lowered its 2025 GDP growth forecast for the bloc, increasing the discount on the currency. The spread between 10-year benchmarks widened again: 10-year USTs trade near 4.46%, while German Bunds are only 2.09%. A nearly 240 bps differential fuels capital outflows from euro assets into dollar ones, exerting fundamental pressure on the pair.

Trade recommendation: SELL 1.1665, SL 1.1685, TP 1.1565

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