The Euro (EUR) has bounced back recently, showing potential for more gains, but it likely won’t hit 1.1655. Analysts from UOB Group report that the chances of the Euro reaching 1.1490 are decreasing during this weaker period. In the short term, the Euro dropped to 1.1541 but then surprisingly rose to 1.1630 during the New York trading session. While this rebound could continue, it isn’t expected to reach 1.1655. Key support levels are identified at 1.1585 and 1.1560. Looking ahead over the next 1-3 weeks, the outlook for the Euro appears negative, with a predicted decline towards 1.1490. However, it recently rebounded, reaching 1.1630 and closing at 1.1618, which is a 0.48% increase. The downward trend is losing momentum, and the possibility of hitting 1.1490 is getting smaller. If it breaks above 1.1655, it would suggest a stabilization of this weakness. We can reflect on October 2021, when the Euro unexpectedly rebounded after a weak phase. Back then, the viewpoint was that while EUR/USD could rise, it was not likely to break the strong barrier at 1.1655. Today, on October 13, 2025, the economic environment is very different, making this past analysis helpful for understanding the current market. Currently, the interest rate gap is a significant factor. The European Central Bank’s main rate is at 3.5%, while the U.S. Federal Reserve’s rate is 4.75%. This difference continues to support the U.S. dollar over the Euro, limiting the chances for a lasting rally. Recent reports show Eurozone inflation staying at 2.5%, which gives the ECB little reason to raise rates. In contrast, U.S. core inflation is slightly higher at 2.8%, suggesting a different outlook. For those trading derivatives, this suggests that strategies recognizing limited upside potential are smart. Selling out-of-the-money call options or using bear call spreads with a strike price well above the current market price—around 1.0900—could be effective. This allows traders to earn premiums based on the belief that fundamental pressures will limit any significant upward movement. It’s worth noting that after the rebound in October 2021, the EUR/USD pair struggled to break resistance and began a long decline, eventually falling below parity in 2022. This past market behavior reminds us that short-term gains often fade when not backed by fundamental changes. Therefore, any bullish positions should be taken cautiously, as the overall trend may still be downward.

here to set up a live account on VT Markets now