USD strength still underrated? Credit Agricole thinks so

EUR/USD is struggling to hold above 1.1250 after a modest bounce from recent lows near 1.1220. On the 4-hour chart, price remains capped below the 9-period SMA, with RSI hovering near neutral at 40 and volume showing persistent selling pressure. The technical setup points to a fragile recovery that has yet to gain conviction.

This comes as Credit Agricole maintains an above-consensus bullish view on the US dollar, projecting a recovery through H2 2025 and into 2026. While structural risks—such as ongoing US-China trade tensions—continue to draw market attention, the bank sees these concerns as overstated.

President Trump’s latest comments could reinforce that view, suggesting an 80% tariff on Chinese goods could be a viable alternative to the 145% already in place. The upcoming trade talks in Switzerland will be key to near-term direction, but for now, the bias for USD strength appears intact—keeping downside pressure on EUR/USD.