Eurusd dips as US housing market cools and German business sentiment improves

EURUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.1%	-11.9 Pips
Week to-date	0.67%	77 Pips
June	2.21%	251 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD GDP annual rate
Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

In the United States, there was a significant decline in new-home sales for May 2025, which dropped by 13.7%, a stark contrast to the 10.9% increase observed in April. This downturn indicates a potential cooling in the housing market during that period. Moreover, the U.S. House Price Index also faced a decline, moving from a decrease of 0.1% in March to a decrease of 0.4% in April 2025. Such data reflects challenges within the housing sector, possibly due to affordability concerns or shifts in economic conditions, impacting consumer confidence and spending.

In Germany, the ifo Business Climate Index for June 2025 showed an upward trend, rising to 88.4 points from 87.5 in May. This increase suggests some improvement in business sentiment, potentially driven by favorable economic conditions or stronger business performance expectations. Additionally, Germany’s ifo Expectations and Current Assessment indices provide a more optimistic outlook, with expectations rising to 90.7 points and the current assessment slightly improving to 86.2 points. These figures indicate a more positive sentiment among businesses regarding the immediate and future economic climate, reflecting a stable, if slow, recovery.

Lastly, the recent data points have a nuanced impact on EURUSD dynamics. Although the pair fell by 0.1% to 1.15960, it remains in a consolidation phase. The decline in U.S. housing figures might exert downward pressure on the USD due to potential economic cooling. Conversely, the positive signals from Germany could bolster the euro. Traders will be attentive to upcoming high-impact U.S. economic releases, including the GDP annual rate and the PCE Price Index, excluding food and energy. These announcements are likely to influence investor sentiment and, subsequently, the EURUSD exchange rate. Should U.S. economic data come in weaker than expected, the euro may appreciate against the dollar, and vice versa if the data is strong.

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What can we expect from EURUSD today?

EURUSD on Wednesday dropped -0.1% to 1.15960. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for EURUSD looks mixed as the pair is likely to consolidate above 1.158 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.16316 or trades above daily pivot 1.16058. Break above could target R1 at 1.16218. While to the downside, we are looking at 1.158 (S1) and daily low of 1.15898 as support levels. EURUSD need to break on either side to indicate a short-term bias. A close below 1.15898 would indicate selling pressure.

For the week to-date, take note that EURUSD is mixed as compared to the prior week.

Key levels to watch out:

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