20.06.202511:10 Forex Analysis & Reviews: Euro Slightly Rises After Lagarde's Speech

The euro saw a modest recovery after European Central Bank President Christine Lagarde stated that expanding trade within the region could help offset losses resulting from global fragmentation.

Her optimistic remarks came amid growing concerns about the impact of geopolitical risks on the European economy, which is already showing signs of slowing. Investors welcomed her rhetoric, viewing it as a signal that the ECB does not intend to adopt an overly aggressive stance on interest rates, which could further hinder economic growth.

However, the euro's rise was limited, as many traders remain cautious due to ongoing challenges — from tensions in the Middle East to Trump's trade tariffs. In the coming months, a key factor for the euro will be the ability of European countries to adapt to the new conditions of global trade and to find new export markets. Successful implementation of structural reforms aimed at enhancing competitiveness and productivity will also be critical.

"By deepening economic ties — linking neighboring economies more closely — we can reduce our exposure to external shocks," Lagarde said in her speech. "Growing trade within our region can help compensate for losses on global markets."

It is worth recalling that following the latest move taken earlier this month, ECB officials indicated a preference to pause for now — in part to assess the impact of U.S. tariffs, which could still change depending on negotiations with the European Union.

This wait-and-see stance, however, does not imply a refusal to take further action. Rather, it reflects caution driven by the complex geopolitical situation and the need to carefully assess the consequences of each step. It is important to understand that trade policy is not a one-sided game. Decisions made by one party inevitably lead to countermeasures, and ultimately all participants suffer. In this context, constructive dialogue between the U.S. and the European Union becomes particularly important. A successful outcome to the negotiations aimed at reducing trade barriers would not only stabilize global markets but also create favorable conditions for economic growth.

Nonetheless, relying solely on diplomatic efforts would be naive. It is also necessary to develop alternative scenarios that account for possible negative consequences in the event of failed negotiations. This includes diversifying trade partners, strengthening the internal market, and stimulating innovation to enhance the competitiveness of domestic producers. Only a comprehensive approach that combines diplomacy with economic flexibility will allow the EU to effectively cope with these challenges.

As for the current technical picture of EUR/USD, buyers now need to break through the 1.1537 level. Only then can the pair aim for a test of 1.1579. From there, it may climb to 1.1628, though doing so without support from major players will be quite difficult. The most distant target would be the 1.1670 high. In case of a decline in the instrument, I expect significant buyer activity only near the 1.1495 level. If there are no buyers at that level, it would be advisable to wait for a test of the 1.1450 low or to consider opening long positions from 1.1410.

As for the current technical picture of GBP/USD, pound buyers need to reclaim the nearest resistance at 1.3425. Only this will allow a move toward 1.3445, a level above which it will be rather difficult to break through. The most distant target is the 1.3475 level. In case the pair declines, bears will attempt to take control at 1.3385. If successful, a break below this range would deal a significant blow to the bulls and push GBP/USD down to the 1.3360 low, with a further prospect of reaching 1.3335.