EUR/USD is trading around 1.1608 on Tuesday. The US dollar attempted to recover from a sharp intraday decline the previous day, which had been driven by expectations of a faster resolution to the conflict involving Iran, temporarily reducing demand for the dollar as a safe-haven asset.
Yesterday's price action confirmed these assumptions – the low at H is below the low of 3 February (F), refining the lower boundary of the channel. At the same time, the sharp upward reversal (shown by the arrow) indicates increasing demand, driven by a shift in sentiment due to several factors, including:
The Euro hit a rebound as prices still facing resistance at 1.1655. As we see from the chart and if prices hold below the said resistance, the pressure will still affect the market for a further drop towards 1.1400.
EURUSD on the comeback trail The Euro bounced back after weeks of declines, sending the pair to multi-month lows. As the RSI developed a bullish divergence, prices reversed the trend, moving away from the 1.1515 bottom as more buyers entered the market.
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Intraday in EUR/USD is turned neutral again with current recovery, and more consolidations would be seen above 1.1506. Still, outlook stays bearish with 1.1740 support turned resistance intact.
EUR/USD declines to near 1.1600 amid Middle East war
EUR/USD softens below 1.1650 as Middle East turmoil boosts US Dollar
Late in the US session Monday, President Donald Trump suggested the war against Iran was already nearing completion, claiming Washington was well ahead of the four-to-five week timeline initially outlined. The comments came despite the conflict still ongoing and the Strait of Hormuz effectively shut, but that didn't stop markets reacting in predictable fashion.
At the start of the trading week, EUR/USD initially showed a decline of nearly 1.00%. However, the move soon began to reverse in the short term, and the pair has since entered a phase of consistent short-term neutrality.
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EUR/USD: Sentiment pressure and fragile support – Scotiabank