Analysts expect the euro’s upward trend to continue despite ECB concerns and market uncertainty
by VT Markets
/
Jul 21, 2025
The euro may keep rising, even if the European Central Bank (ECB) expresses concerns about its recent gains. Though ECB comments might slow down the euro’s climb for a short time, they are not likely to cause a lasting decline.
Analysts now believe the market is less certain that the ECB will cut interest rates again this year. While a stronger euro could help reduce inflation, it hasn’t sparked expectations for more rate cuts.
New U.S. tariffs have not changed the market’s outlook on potential rate cuts. Despite economic uncertainties, the euro looks stable in its upward movement.
Given this outlook, we recommend that derivative traders think about taking bullish positions on the euro. One straightforward strategy is to buy call options on the EUR/USD currency pair. This way, traders can benefit if the euro continues to strengthen. This strategy fits with our belief that the euro’s upward trend will overcome short-term obstacles.
If the ECB makes comments that lead to a temporary dip, it could be a good chance to enter the market. We suggest using this dip to sell out-of-the-money put options. This strategy allows traders to earn premiums while preparing for the euro to bounce back from any brief declines.
This viewpoint is supported by recent data showing Eurozone inflation rose unexpectedly to 2.6% in May 2024, complicating the potential for further rate cuts. At the same time, data from the CFTC’s latest Commitment of Traders report indicates that speculators are increasing their net long positions on the euro, signaling growing support for its strength. Historically, when markets begin to dismiss expected rate cuts, the currency often finds solid support.
by VT Markets
Jul 21, 2025
Insights 
VT 
