• EUR/USD bulls are holding ground—but a Trump-Xi call could tip the balance.
• With eurozone inflation cooling and US data mixed, caution rules the currency charts.
• All eyes now turn to the ECB and NFP—two catalysts that could reshape the trend.

While the longer-term EUR/USD trend is still likely to remain supportive amid ongoing concerns about the US debt situation, in the near term some weakness shouldn’t come as a major surprise. Traders are juggling a mix of soft Eurozone inflation , hawkish US headlines, and persistent geopolitical noise. The most immediate wildcard is the much-anticipated Trump-Xi call — an event that could shift market sentiment sharply in either direction. This week also features a European Central Bank rate decision and key US jobs data.

Trump: Xi ‘Extremely Hard to Make a Deal With’

Trump’s latest remarks calling Xi “extremely hard to make a deal with,” while insisting he still “likes” the Chinese president, added classic ambiguity to the mix. Still, markets are hoping that renewed communication between Washington and Beijing can at least temporarily ease trade tensions. Based on recent fluctuations in the DXY chart , that would offer the dollar — which typically weakens during heightened trade conflict — a short-lived boost. But lasting progress remains unlikely, and traders will stay cautious about both the trade picture and the dollar’s recovery prospects.

With new tariffs like the 50% duty on steel and aluminium already in effect, unless the Trump-Xi call delivers something concrete, the dollar may struggle to hold its gains — potentially allowing EUR/USD to drift higher again.

Temporary US Dollar Rebound or Something More?

The greenback has managed a modest rebound this week, helped by stronger-than-expected JOLTS job openings . However, the lift seems more sentiment-driven, based on optimism around US-China talks. The real story lies in the bond market. Treasury yields have rebounded, but the broader trend remains shaky. Investors are demanding higher returns to hold US debt, increasingly viewing Treasuries as no longer “risk-free.” With rising debt levels and no credible fiscal plan in place, concerns are building about long-term economic impacts, keeping the EUR/USD forecast bullish.

ISM Services PMI Up Next After ADP Disappoints

Today’s US calendar could add to the dollar narrative. Following Monday’s softer ISM manufacturing print and Tuesday’s stronger JOLTS data, and a poor showing from the ADP payrolls report released moments ago (37K vs. 114K expected) all eyes turn to the ISM services index later. Any upside surprises may fuel further dollar strength — but traders may hold back until Friday’s all-important NFP release.

Until then, dollar upside could be limited, especially if the Trump-Xi call underwhelms or US data underperforms. That’s why I remain bullish on EUR/USD but prefer buying into dips rather than chasing rallies.

Eurozone Inflation and ECB: What’s Next for EUR/USD?

The euro has started to look a bit overstretched, with EUR/USD hovering near 1.1400. Yesterday’s weaker inflation print — with core CPI slipping from 2.7% to 2.3% and headline CPI dipping below 2.0% — has reignited speculation about more ECB rate cuts this summer. A dovish message from the ECB on Thursday seems increasingly likely.

Today’s eurozone calendar is light, so attention remains fixed on the ECB decision, Trump-Xi developments, and US macro data — all of which could shape the near-term EUR/USD outlook.

EUR/USD Technical View: Key Levels to Watch

Technically, EUR/USD still shows a constructive setup, though near-term momentum is fading. The pair is making higher highs and lows, and remains above key moving averages. A decisive move above 1.1450 could trigger a run toward 1.1500 and even April highs near 1.1570 — but weak US data would likely be needed to spark that move.

Support zones to watch lie at 1.1300 and around the 1.1215–1.1220 range. A sustained break below 1.1210–1.1265 could undermine the bullish structure by breaching the rising trend line.

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