The euro has been under pressure against the U.S. dollar in recent sessions, slipping further to the 1.1450 level early Thursday. Market sentiment has turned cautious, with traders closely watching an upcoming speech by European Central Bank (ECB) President Christine Lagarde for possible policy cues.

Since reaching a yearly high of 1.1589 in mid-June, the euro has gradually pulled back. It’s now trading within a narrow range between 1.1450 and 1.1500. As of the June 18 close, EUR/USD stood at 1.1465—marking a notable retreat from earlier highs. While the broader trend since early 2025 still points upward, near-term momentum appears to be losing steam.

One of the key factors behind the euro’s softness is the rise in geopolitical tensions in the Middle East. Risk-off sentiment has pushed demand back to the safe-haven dollar, adding pressure to the euro. In addition, the ECB delivered a 25 basis point rate cut in early June and signaled a data-driven approach going forward. Markets broadly expect the central bank will hold off on further moves in the immediate term.

All eyes are now on Lagarde’s latest speech, particularly her take on inflation trends, the economic outlook in the eurozone, and whether she hints at future easing or a wait-and-see stance. Even subtle signals could rattle currency, equity, and bond markets in what remains a sensitive period for global investors.

Meanwhile, the U.S. economy continues to deliver solid data, reinforcing expectations that the Federal Reserve will keep interest rates elevated for longer. This has further strengthened the dollar’s position across the board.

Given these dynamics, many analysts believe that the euro’s near-term outlook remains tilted to the downside. If Lagarde refrains from offering clearer guidance on further easing, the euro may continue to languish—and a test of the 1.1400 level is possible. If geopolitical risks escalate further, a drop toward the month’s low near 1.1268 can’t be ruled out. On the other hand, some institutions believe the euro could stabilize and recover above 1.1400 by the third quarter, assuming calmer market conditions and supportive economic data.

In the coming weeks, investors should watch for:

– Key comments from ECB President Lagarde, especially regarding inflation and policy direction
– Developments in the Middle East and their potential impact on global risk appetite
– Key upcoming U.S. data releases, including inflation and labor market reports

Bottom line: Uncertainty remains high for EUR/USD in the short term. With attention sharply focused on central bank signals and geopolitical developments, investors should stay nimble and ready to adjust as new information comes in.