Geopolitics and ECB expectations intensify pressure on EURUSD

The euro continues to lose ground amid the escalating conflict in the Middle East and expectations surrounding the ECB meeting. The EURUSD rate currently stands at 1.1410. Discover more in our analysis for 22 July 2026.

EURUSD forecast: key takeaways

• The conflict in the Strait of Hormuz continues to intensify
• Trump is preparing a new package of tariffs against the EU
• The ECB is likely to pause rate hikes at tomorrow's meeting
• EURUSD forecast for 22 July 2026: 1.1370 or 1.1475

Fundamental analysis

The EURUSD forecast takes into account that the pair continues to correct after reaching new highs for the current month and is testing the 1.1400 level.

The conflict in the Strait of Hormuz continues to intensify. The Pentagon struck targets in Iran, while Iran threatened to expand the conflict zone. Against this backdrop, the US Dollar Index (DXY) is trading near 101.10, while geopolitical uncertainty is driving investors towards the safe-haven dollar, putting direct pressure on the EURUSD rate.

The German chancellor warned that Trump is preparing a new package of tariffs that could negatively affect the European economy. Analysts expect the eurozone trade balance to deteriorate and GDP growth forecasts to be downgraded, which is a classic bearish factor for the euro.

Fundamental analysis for 22 July 2026 takes into account that the ECB is likely to pause rate hikes at tomorrow's meeting, with the rate forecast to remain at 2.25%, as eurozone inflation unexpectedly slowed to 2.5%. The market will assess Lagarde's rhetoric and look for hints of a September hike. Any dovish signal could send the EURUSD rate plummeting below 1.1300.

The euro is suffering from geopolitics and Europe's internal weakness. The dollar is strengthening as a safe-haven currency amid the conflict with Iran, while the risks of new Trump tariffs and an energy crisis in Germany are dashing the euro’s last hopes. Tomorrow's ECB meeting is the bulls' final chance to hold on to the 1.1400 level; otherwise, the pair could fall below 1.1300 in the coming days.

Technical outlook

On the EURUSD H4 chart, the price formed a Hanging Man reversal pattern near the upper Bollinger Band. At this stage, quotes continue to develop a corrective wave in line with the signal, with the potential downside target at the 1.1370 support level. A rebound from this mark would open the door for upward momentum.

At the same time, today's EURUSD forecast also considers another scenario. Quotes could form an upward wave and test the 1.1475 resistance level without testing support.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (intraday)
• Trend: bearish
• Key resistance levels: 1.1435 and 1.1475
• Key support levels: 1.1370 and 1.1300

EURUSD trading scenarios for today

Main scenario (Sell Stop)

A breakout and consolidation below the 1.1370 support level would confirm increasing selling pressure and create conditions for a further decline in the EURUSD pair. The nearest downside target would be 1.1300.

• Take Profit: 1.1300
• Stop Loss: 1.1390

Alternative scenario (Buy Stop)

A breakout and consolidation above the 1.1435 resistance level would indicate a recovery in buying activity and open the way towards the next level at 1.1475.

• Take Profit: 1.1475
• Stop Loss: 1.1415

Risk factors

The main risk to the bearish scenario remains a de-escalation of the conflict between the US and Iran, which could dampen demand for the dollar. The ECB's interest rate decision at its 22–23 July meeting may provide additional support for the EURUSD pair.

Summary

The euro is losing ground amid the ECB's interest rate decision and the escalating conflict in the Middle East. EURUSD technical analysis suggests a decline towards the 1.1370 level.

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